Today’s customer contact centers are the 21st Century equivalents of the industrial age in the United States. They are service factories, just as labor intensive as a manufacturing plant of 100 years ago. Labor costs are very high. Labor alone comprises approximately 70 percent of total contact center costs.

It is not that the customer service representatives that work in contact centers are highly paid. High labor costs are because so many people are required to meet the service goals in contact centers. It is because of the high labor cost that two things have occurred in the customer service or contact center industry that customers absolutely hate:

  • The outsourcing of domestic contact centers to low cost offshore labor markets, such as Asia, Eastern Europe, and Central America. The service quality and language skills of these offshore centers are often felt not to be of the same caliber as domestic US contact centers. 
  • The widespread use of automated call processing systems that asks callers to select the reason they are calling and allows callers to perform certain functions and obtain information.

The focus of this article deals only with the second industry trend that customers find most hateful, automated call processing systems.

Customers may choose from numerous contact channels, such as Internet Web chat, email, website self-service, and phone. Most customers still opt for the phone to contact a company or government agency for help. With the proliferation of mobile phones, it is not surprising that phone remains the channel of choice for customers.

The infamous automated answering systems, known as Interactive Voice Response (IVR) systems, used in all contact centers today are a source of regular frustration for callers. These systems are labor-saving devices that are designed to deflect callers from customer service representatives to be completely handled in a self-service fashion. In theory, that is a great concept. Introducing labor-saving automation in a labor-intensive environment will service customers faster and with more consistent service quality and save the company a large amount of money by reducing labor costs. Yes, but there is a catch. Most of these systems are poorly designed and do not serve customers very well.

There is a tendency for service providing organizations to be very self-focused and design all customer interactions from their own narrow standpoint and strictly for the benefit of the business. This one-sided relationship diminishes the customer experience by subjecting callers to poorly designed phone self-service systems and convoluted processes.

Most callers regard these automated systems as barriers that must be circumvented, and some are actually designed as obstacles and do not give callers any means to exit the system and speak with a customer service representative. Some even, by design or accident, actually hang up on callers after a predetermined number of attempts is exceeded or after informational announcements are played.

The Business Case

The business case for implementing automation in contact centers is a strong one. Because people are expensive and systems are cheap, service organizations have a strong motivation to reduce the workload for customer service representatives. The payback period for investments in these self-service phone systems is not years, but usually a matter of months.

Automated phone systems are capable of delivering high-quality service, but most of these automated voice systems are designed so poorly that we have trained customers not to use them. Indeed, in one recent survey of government contact centers, more than 50 percent of callers opted out of the automated phone system immediately to speak to an agent without even attempting to use it. That same survey indicated that only 4 percent of callers actually got the information that they required from the automated phone system without speaking to an agent.

In financial and insurance industries, these automated call-handling systems typically deflect or handle 50 percent or more of customer calls. That means staff can focus on callers with more complex issues. It also means that because the financial implications are so significant, these automated phone-handling systems are here to stay.

If the call cannot be completely automated, perhaps a segment or routine portion of it that does customer lookup and authentication can be automated, so that instead of dealing with an average call length of 10 minutes, the average call duration can be reduced to 7 minutes. Shaving 3 minutes from an average phone call may not seem significant, but when you spread the cost of those 3 minutes across a million calls annually, the cost savings becomes dramatic.

There are a number of things that quality conscious and customer-focused organizations can do to make real improvements in their interactive voice processing systems. These smarter, kinder, more efficient fixes may not require much effort or a large resource commitment to deploy.

If It Does Not Add Value Don’t Use It

If the automated call processing system does not add value, do not use it. Have no doubt that that is what your customers are going to do.

If the automated call processing system does not add value, do not use it.
Tweet: If the automated call processing system does not add value, do not use it. @ThinkHDI

Determine what value the automated call processing system is adding. If it is placed between the caller and the customer service representative and performs no self-service functions, why is it there, simply to greet callers? The phone system automatic call distributor (ACD) has the ability to greet callers, thank them for calling, and tell them that their call will be answered shortly if a customer service representative is not immediately available. So what value is the IVR adding?

It is a shocking concept, but why not just have customer service representatives answer the phone without an intermediary IVR system in the mix. It is very unconventional, but if the interactive voice response system is not adding value, why not remove it? Thinking in these terms will force a critical examination of the system and justification for its existence, and that will lead to significant improvements in technology, processes, and the customer experience.

Add Innovative Functions

Step beyond common functionality by innovating new solutions. For example, in all probability more than half of all callers are using smartphones. The system can automatically capture their phone number. Why not email or text them a video that contains the information they want or at least offer to send them a video based on the reason they are calling? Just verify the number they would like to receive the video, or give them an email option and let them speak or input their email address.

Rather than give callers an easy way to exit the system and speak to an agent, try offering them the ability to schedule a call back from a customer service representative instead to avoid waiting in queue. This call back option is usually presented to callers once they have been placed in queue, but moving this function back up the contact chain has benefits for the callers and the service organization. This would reduce staff costs as well as reduce the number of calls waiting in queue to speak with a customer service representative.

Immediately Demonstrate That You Are Different

If you designed a better mousetrap and your IVR system is different because it is customer focused, optimized, and improved, will customers even give it a chance and attempt to use it? Or will they immediately opt out to speak with a customer service representative and not even attempt to use the system?

Within the first 15 seconds of a call, the system must demonstrate to the caller that the system is different. Customers must see that it is different from the poorly designed automated call processing systems they have experienced in the past. This difference will usually involve better process design and advanced technical capabilities.

Automate Functions that Customer Service Representatives Perform

The real power of IVR systems lays beyond the automated-attendant functions of identifying the reason for the call and routing it appropriately. It is the ability to allow callers to easily perform functions in a self-service fashion as efficiently and securely as a bank’s ATM or a website. It is not so much a technology as a creative design and innovation challenge.

The Internet has stolen much of the IVR system’s thunder when it comes to self-service applications, but there is still opportunity at the point of customer contact. One key factor is that the self service must be quick and easy for the caller.

Customers call for a variety of reasons, but these usually fall into two broad categories: they have a question and want information or they want to complete a function or transaction. Getting them to the right information or to the correct voice driven tool so that they can retrieve the information or perform the function themselves is critical.

Ask Customers for Information Once and Only Once

 It is a sore point with customers and a failure of system design to have customers repeat information that they have already provided to the automated call processing system. Very often information collected in the system is not sent to the customer service representative when the caller ops out of the system. Customers must repeat information such as account numbers, credit card numbers, and telephone numbers multiple times. This not only frustrates and annoys callers, but it adds additional length to calls, requiring more staff to handle calls and resulting in costs to the company.

Most often requests to customers to repeat information is a process failure rather than a technical limitation. It means that no one has bothered to connect the dots regarding what was already collected by the system and neglected to create a means to communicate it to customer service representatives with the call.

Ask Customers Only for Necessary Information

Many companies are self-focused when it comes to customer interactions. They often design processes around the contact with customers to serve their own internal business needsand not around what it best for the customer. The minimal amount of information should be collected in order to fulfill the customer’s request. Often collecting address, phone number, and email address in order to answer a simple question the customer has could be an annoyance or a burden to customers. Is the information that is required from customers really required and reasonable based on what they are requesting?

Senior Management Acting as Customers

What CEOs and senior management need to do is try and use these automated call handling systems themselves and see firsthand how they process calls and how customer-friendly they actually are. Would they use the system to process their request? If they would not use it, why would they expect their customers to use it?

We often ask customers to do things we ourselves would never do. What would the automated call processing system have to do in order to get the CEO to use it? It would have to be different from any system they had used in the past. What might the system say to the CEO to get him or her to use it? An introductory statement might say just that, “I am different than systems you have experienced in the past. I use a reasoning engine based on artificial intelligence, and I understand what you are saying.”

After normal usability testing, senior management should be allowed to act as customers to obtain information or perform common functions. If they were customers, would they use the system or immediately opt out to speak with a customer service representative? It is unlikely they would jump through all the hoops that customers are typically required to.

Data Driven Design for the System

It is important to understand what customers are doing in your automated call processing system. Luckily, like most other customer service technologies, the system can generate a rich array of standard and customized reports. It is usually very easy to determine at what point in the system customers are hanging up or opting not to speak to an agent. Identifying and analyzing the point of hang up or exit from the system is a key driver in planning improvements.

It is just as important to identify components and portions of the system callers are using and areas of the system that are underutilized. The system analysis should be the basis for enhancements and changes to the system. Once system improvements and changes are implemented, the data and system analysis should begin again.

Customer Satisfaction Surveys

Gathering customer satisfaction data and feedback in the form of verbatim comments regarding the automated call handling system also helps in formulating plans for system improvements. It is very difficult to get customers to respond to a paper, automated telephone, or web-based survey. These types of surveys do not capture enough verbatim comment details.

An outbound telephone survey is likely to collect more complete information than any other survey method. It can be executed soon after contact with the caller. It may be more expensive than other survey methods, but it is likely to be the most effective way to understand the customer experience and their level of satisfaction.

The goal of executing customer satisfaction surveys is not simply to measure the levels of customer satisfaction, but to gather customer intelligence in the form of what they like and do not like about the system and capture enough verbatim feedback to take action. Customer satisfaction data must be made actionable in order to make system changes that will drive customer satisfaction to even higher levels.

What the Future Brings

We spoke earlier that the phone channel has retained its place as the most preferred customer contact channel due primarily to the widespread use of mobile telephones. In most cases, these mobile devices are smartphones, which really are not strictly audio devices, but rather video devices. Voice calls will evolve into video calls. Automated call processing systems will become graphical in terms of navigation and become text and video libraries in terms of content.

The distinction between voice, video, and Internet will continue to fade and the IVR system will be replaced by self-service automated agents or “bots” that will be more intelligent and flexible than the “phone jails” where customers are detained today. Today’s system will look as antiquated and limited as manual cord switchboards of the first part of the 20th Century. Customers will be freed by increased choices and will be served by devices that are more intelligent. All of us hope the future arrives soon.


Doug TanouryDoug Tanoury is a management consultant at Noblis and specializes in optimizing and improving the customer experience. He is a customer management expert, having held contact center operations and management positions at General Dynamics, AT&T, Electronic Data Systems (EDS), MCI Telecommunications, Eventus Solutions, eLoyalty, and Siebel Systems. Doug has published a number of whitepapers and articles that focus on customer relationship management, ways to manage customer contact centers more effectively, and innovative ways to improve the customer experience.



Tag(s): automation, business value, communications technology, customer experience, customer service, supportworld


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