Taking Care of Business

For more than a decade, businesses around the world have been harnessing the power of speech-enabled technology to reduce costs and enhance customer service.

Today, with the evolution that is taking place in the industry, you'll find companies of all sizes using state-of-the-art systems to make it easier for customers to place an order, have a catalog mailed to them or find the nearest retail outlet.

But more and more companies are coming to the realization that speech-enabled technology is not just about saving money and improving customer service. It's also about improving a company's top-line revenue by making it easier for customers to purchase additional products and services they need, but might not have thought about ordering.

As speech-enabled technology grows in popularity with customers, more retailers are following the lead of Delray Beach, Florida-based office products retailer, Office Depot, and enhancing existing voice response systems to drive revenue.

For Office Depot, the opportunity to consistently offer customers high-margin products, such as warranties and accessories on items they've just purchased, has translated into a significant increase in the average order size and hundreds of thousands of dollars of incremental revenue each year.

The Challenge
For more than four years, Office Depot, the nation's second-largest office products retailer, has used a speech-activated ordering system to handle many of the calls that had been answered by customer service representatives.

Customers who called Office Depot's toll-free number, 1-800-GO-DEPOT, used the Speech Activated Quick Order to select from among the 15,000 products that the $13-billion-a-year office products company offers. They could also do anything from finding the nearest store to ordering a catalog.

What the system was unable to do at the time was replicate the up-selling techniques offered by live customer service representatives, who could tell customers about product promotions or advise customers of required but not-included items, such as a cable needed for a certain printer.

The challenge was to find a way to consistently ensure that customers never hang up the telephone without having the opportunity to purchase an add-on to products they ordered. More importantly, Office Depot needed to make sure that replacement products were offered at the same price if a product was out of stock so that customers would not be disappointed.

The Solution
Realizing the opportunity existed, Office Depot began working with customer service representatives, listening to calls and architecting the call flows that would lead to successful incremental revenue generation. Following the human factors team, the application deployment team worked to modify the existing application to add the functionality necessary to recreate the customer service experience that customers have come to expect.

Prior to deployment, actual calls were made by selected teams of Office Depot customer service representatives for approximately three days to ensure that the enhancements functioned in the same manner as designed.  At the same time, full regression testing and load testing was completed to ensure a successful deployment.

In June 2004, Office Depot unveiled the enhanced Speech Activated Quick Order system designed to recognize customer needs and respond to them.

Among the enhancements introduced were those that provided notification of:

  • Items required for operation of equipment but not included with purchase/package
  • Substitution items for those not in stock, available at the same price
  • Available warranties
  • Shipping charges that could be avoided with an additional purchase
  • Bulk pricing alerts

Immediate Success
Six weeks after the new enhancements were introduced on the NetByTel system, Office Depot noticed that the amount of the average sale handled by the voice system had increased almost 2.5 percent, simply because customers were ordering more products.

Over the course of a year, that 2.5 percent translated into several hundred thousand dollars of incremental revenue that was not being captured previously.

The enhanced Office Depot Speech Activated Quick Order system offers customers options that can be essential when it comes to offering substitutions for items out of stock or otherwise not available.

In addition to helping to generate revenue, the enhancements rolled out last year also enable Office Depot to reduce expenses, such as training costs associated with live operators.   Additionally, there is less support required and there are fewer mistakes on orders with required items.

Integrated Technology
For Office Depot, the upgrades to the system confirmed the value of having hosted speech-enhanced technology services so that the goal of having customers order from anywhere at anytime could be met with a minimum of up-front capital investment.

In 1999 Office Depot, which had just launched its Web-based ordering system, began investigating the feasibility of a speech-activated ordering system. Office Depot had an existing touchtone solution.  Office Depot looked for a provider that could be nimble and flexible to its rapid growth and constantly changing business needs and realized that building a speech application and integrating those capabilities into the back-end of its Web-based ordering system would require quite a bit of development work. The retail chain would have to invest a substantial amount of money (more than $500k)  into deploying the infrastructure necessary to build an in-house voice system that would interface with the existing database.

For Office Depot, the decision to turn to NetByTel was helped along by the ASR provider's ability to build its system on top of Office Depot's existing technology infrastructure. In essence, Office Depot was able to capitalize on an already existing back-end system with an e-commerce infrastructure to better serve its customers. More importantly, it was able to do it with no up-front capital costs for software or hardware.

"Because we already had a Web-service based API for our ordering system and NetByTel provided us with the expertise to voice enable the application, we encountered no major hurdles when we deployed NetByTel's speech-activated telephone ordering system," says Mike Kirschner, vice president of IT business services at Office Depot.

"The complexities of voice recognition, speech synthesis and speech application design are hidden from us and decoupled from our system," Kirschner says. "NetByTel has the expertise in the voice space and can leverage those advances without any changes required on our part."

Office Depot was also attracted to the transaction fee-based business model offered rather than having a monthly or quarterly maintenance fee.

"The transaction-fee model simplifies the business decisions and the variables that need to be evaluated when identifying functions for speech activation," Kirschner said.

The speech solution is seamless to callers who enter the system by calling a toll-free number. Customers are unaware they are being connected to the NetByTel system, which has its solutions embedded in the main menu that is managed by Office Depot's telco provider.

"It is critical that customers be presented with consistent messages across our channels, whether they are accessing our system via the Internet, the call centers or NetByTel applications," Kirschner said.

The additional modules added in June of 2004 do just that, ensuring that customers are asked relevant questions during the ordering process.

Because of the success Office Depot has had with the additional modules, the system is now being reviewed by the international business channel, as well as the marketing department for loyalty solutions.

Ken Jackowitz is executive vice president & chief customer officer of NetByTel.

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