Using the Phone to Transform Customer Service into a Strategic Asset

Contact centers in several thousand enterprises around the world have derived cost savings and customer satisfaction benefits by deploying speech recognition technology to automate customer service calls.  The return on most of these deployments is usually measured in months, and customer satisfaction surveys indicate that callers frequently prefer voice for conducting service transactions—as opposed to touchtone or lengthy live agent interactions.

Speech has paid off for Tele-Direct Call Centers, a full-service call center outsourcer in Sacramento, Calif. who was looking for a way to scale flexibly and affordably, but keeping costs in line with the changing nature of its workload.  "Our automated voice system enables the same number of operators to handle 20 percent more calls, even in a highly dynamic environment," says Tom Coshow, CEO of Tele-Direct. "This means 20 percent growth in call capacity without adding agents or hard infrastructure."

However, while the primary business driver for automation in contact centers has traditionally been cost reduction, most enterprises overlook the more strategic opportunity that voice-enabled customer service presents - the ability to increase revenue, customer retention and customer loyalty.

The Strategic Role of the Contact Center
Most enterprise contact centers are treated as cost centers and are constantly challenged to cut operating costs.  However, while cost-cutting efforts frequently accomplish their goals, they also contribute to customer dissatisfaction and defection, and customer service is now in jeopardy. 

It is not surprising, then, that businesses lose many customers every year.  In fact, according to Forrester Research, 68 percent of customers defect due to poor service, and unfortunately, customer service systems are a significant contributor to that number.  It doesn't take much for customers to be lured away, especially if a business has not invested significantly in building customer loyalty.  In many cases, even the basic caller needs of easy, friendly and fast service are not being met, and instead of looking forward to calling, most consumers dread the experience.

Above all, most consumers deem the efficiency at which they can complete transactions as the most important criteria.  Tele-Direct uses ANI look-ups so that callers simply confirm rather than enter their address.  This cuts the call duration by nearly one minute, saving time for callers and money for businesses.

Considering that 90 percent of customer service interactions still occur over the phone for most businesses, the impact of the inbound phone channel on customer retention is startling.  Unfortunately, while some companies measure customer satisfaction today, few have goals for or even know how to measure customer retention and loyalty.

The opportunity is clear.  While reducing operating costs is important, the most significant contribution the phone has on the customer service channel is delivering service excellence — which ultimately leads to more loyal customers, higher revenues, and greater profitability per customer. The businesses that can tap into that opportunity will be poised to gain significant market share and value.

The New Marketing Opportunity
The marketing function at most companies is under extreme pressure to generate customer demand.  The task grows more challenging daily as traditional avenues to reach customers are being diminished through legislation, spam blockers, and a general overload of information.  In addition, outreach to existing customers for repeat business is arguably the most cost-effective method of generating incremental revenue.

Interestingly, as the most dominant interface for engaging with customers, the phone has largely been ignored by many marketers.  In some cases, the opportunity the phone channel provides has simply not been recognized, and in others, the complexity of leveraging the infrastructure in-place is a deterrent. 

Using the phone channel as a marketing vehicle does not necessarily require significant effort.  As an example, Tele-Direct enables PBS stations to customize the caller interaction for pledge drives by selecting a celebrity or well-known personality to record prompts, generating more enthusiasm from callers and better revenue from call-in campaigns.

Some businesses routinely use live agents to present up-sell and cross-sell offers to callers.  Many have found, however, that service specialists are not the most effective sales people, and others miss sales opportunities due to unexpected call volume. 

"Without adding operators or call stations, we can virtually eliminate the risk of missed or dropped calls due to sudden call spikes. This translates into money, orders, or information that might have been lost," says Coshow.

The majority of automated voice systems were also not designed with marketing in mind, making it difficult to insert messages or promotions into their call flows — let alone manage and measure the overall success of phone-based marketing campaigns.  Also, as any marketer knows, highly targeted messages at the precise point of impact will be more effective than generic ones, and most automated systems today do not enable that degree of specificity for business users.

The opportunity to market to customers over the phone can no longer be ignored, especially if you consider the volume of daily caller interactions.  Armed with the appropriate tools, marketers can turn the phone into their company's most successful marketing channel, and turn every customer call into a revenue-generating transaction and ultimately a loyalty opportunity.  A prime example of this type of transaction is that of "Bob" and his interaction with his bank's customer service line. Consider the following:

Bob calls his bank's customer service line.  After answering on the first ring with the persona that Bob has selected from the choices on the bank's Web site, the system detects his phone number, looks up his account and profile details, and immediately asks Bob whether he wants to make the same transfer of $1,000 from his checking to his savings account that he does on this day every month.  After Bob confirms the transaction, the system suggests to Bob that he could earn an additional $300 per month if he placed the balance of his savings account in a high interest CD.  The system then presents three (of the possible 50) menu options to Bob - the only ones relevant to his account - and informs him that the billing inquiry he logged on the bank's Web site has been resolved.

In the above scenario, Bob's experience is unique to other callers, but also to the specific call he placed. The system anticipated his needs, behaved in a way that is comfortable to him, enabled him to complete his business quickly and effortlessly, and presented him with relevant information that will save him time and money in the future.

Banks, retailers and enterprises in any industry can also tap into another key element of personalization - timeliness.  Offering a World Series special edition jacket to callers five minutes after the final pitch will have a far greater impact than the same promotion two weeks later, and explaining to callers from a specific region the steps an insurer is taking to assist them one hour after the last tornado touched down, goes a long way to showing a strong commitment to customer service.

The Principles Behind v-Business
Striking the perfect balance between cost savings, service excellence and revenue generation in the delivery of customer service is essentially what the preceding discussion is about.  The term v-Business - conducting business over the phone - is used to encapsulate these goals.  The key principles that underlie v-Business are as follows:

  • Every call is a vehicle for business managers to market to, educate and inform customers
  • Every call should be tailored to the precise intent, needs, interests and preferences of individual customers
  • Every call should aim to deliver the ultimate customer experience, utilizing business knowledge and customer understanding

Unlike a cost savings orientation, v-Business suggests a model that thrives on service excellence and revenue growth.  This model is shown in Figure 1 and is called the service-revenue cycle.  It highlights the critical interdependencies of how understanding the needs and interests of customers ultimately creates better service levels and higher returns.

Figure 1: The Service-Revenue Cycle

This cycle demonstrates the inextricable link between customer satisfaction, loyalty and revenue.  As a customer-centric model, the approach integrates the near decade-long best practices derived from the CRM space — coupling the dynamic and engaging elements of the Web with next-generation voice technologies, behavior profiling and reporting intelligence so that enterprises can help customers conduct business transactions over the phone quickly, easily, affordably and naturally.  

For Tele-Direct, whose primary objective during routine, yet demanding pledge drives is to raise money, the benefits were clear. Using a costly approach to manage incoming calls is counter-productive to their customers' goals. Each and every call has to have the ability to translate into revenue. Therefore, call capacities need to be optimized to accommodate at least 20-30 percent more calls during spikes — ensuring that all the incoming calls can be handled quickly and easily without hold times and far shorter call durations than agent-based calls.  Caller hang-ups represent lost revenue — which is significant when you have only a limited timeframe to generate money and reach the targeted goal. The big payoff for Tele-Direct was the ability to offer their PBS stations an efficient and sophisticated voice solution that was flexible enough to modify call flows and promotional offers on-the-fly as priorities changed during their campaigns.  Speech was a much more affordable solution than bringing on live agents who required extensive training for a one to two week campaign — as much as 25 percent savings for the PBS stations over the duration of an entire pledge drive.

Don Steul is the vice president of products & services for Apptera.  Steul has spent 13 years in the software industry and has been a leading advocate of customer service solutions for the last seven years.  He joined Apptera in 2002 after spending four years at Genesys Telecommunications Laboratories, a subsidiary of Alcatel, developing multi-channel customer interaction management solutions.  

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