New Opportunities for Customer Service: Personalized Phone Self-Service

A White Paper by VoiceObjects

December 2007 www.VoiceObjects.com

New Opportunities for Customer Service: Personalized Phone Self-Service

Executive Summary
Companies that offer customers over-the-phone customer service must continually lower their costs and at the same time maintain or improve customer satisfaction. This challenging yet essential feat can succeed with the help of modern technologies, if companies can create personalized phone self-service with the help of integrated, server-based platforms such as one from VoiceObjects.

Telephone contact with the customer remains indispensable and must be improved
Hello, this is our companys service hotline. If you have a question about one of our products or services, please say Products or press 1 on your keypad. If you have a question about your bill, please say Bill or press 2 on your keypad. If you . This sounds familiar, because every one of us is a customer and nearly everyone knows the frustration that comes from badly designed dialog systems. For example, after keying in an endless number of entries on your keypad as you wade through a cascade of overloaded menus, you still dont get a satisfactory result. And when you finally get through to a call center, the representative often asks the same questions about customer details, PINs and the reason for your call. Its as if the system designers only think about the technology and not about the experience of the customer. For companies the consequences of unfriendly self-service systems are dismal. Three out of four customers contemplate terminating their relationship with a company after bad experiences with call centers. Conversely, 85 percent of satisfied call center customers are guaranteed to remain loyal to the company, according to the study by the CFI Group1, publishers of the annual American Customer Satisfaction Index. Even in the Internet age, the telephone, with a share of over 80 percent of interactions, is still the number one contact medium for customers2. And, according to McKinsey3, nearly every other online transaction is followed by a telephone call. Therefore, the optimization of the phone channel is a must. Indeed, in many sectors, optimization is key for the simple reason that it has become more important to hold on to existing customers than to acquire new ones.
1 2

CFI Group: www.cfigroup.com DATAMONITOR (2007): Extreme Makeover: IVR Edition - Personalizing phone self-service: White paper prepared by Datamonitor, New York 3 JOHANNA WATEROUS, MCKINSEY. Source: Glass elevator, By Heather McGregor. Financial Times - September 29 2007

New Opportunities for Customer Service: Personalized Phone Self-Service

Mobile phone providers, for example, understand that, in view of increasing market saturation, they must concentrate on retaining customers. Theres plenty of room to improve service, as demonstrated by the results of a customer survey4 on telephone-based customer service commissioned by VoiceObjects5: 40 percent of respondents appear very dissatisfied with automated systems that ask callers to repeat information already provided. And over 80 percent are frustrated or very frustrated by complicated or opaque dialog systems and menus. Of course, consumer companies want to implement phone self-service since its about 1/10th the cost of an agent-based call, despite these typical results today. A bad customer experience with phone self-service can nearly always be traced back to an inadequate voice user interface (VUI). Frequently, the culprits are menus that are too long and circuitous; menu options that are poorly sorted or present no relevance; questions that cannot be curtailed; or a call center connection that is bad. In addition, the design of most telephone applications is static and unsuited to the requirements, situation or preferences of the caller. In terms of system development, this is the position the Internet was in around 10 years ago and it is scarcely imaginable these days for a consumer products company to operate a Website that doesnt take a personal approach, recommend individual products (up/cross-selling) or provide access to the customers contact history.

Standardization smoothes the way to increased efciency

Why are Internet systems today so advanced compared to most voice dialog systems? Standardization plays an important role. The fast development of the Internet was first possible because of standards like http and HTML. These standards became the foundation of basic management platforms created to allow mainstream companies to make effective use of these new Web technologies. The out-of-the-box nature of superior Internet technologies supported two key benefits: Web portal personalization and cost effective maintenance. By contrast, most companies have never seriously considered personalizing their phone self-service systems in the way they have done with their Web portals. In the voice context, companies still lean primarily on proprietary systems that require costly specialist knowledge to operate and configure and require a special connection to the rest of the companys infrastructure. When its not costeffective to improve the design of such systems, theyre allowed to become static. In addition,
4 5

Customer Satisfaction Survey (2006), commissioned by VoiceObjects, San Francisco Customer Satisfaction Survey (2006), commissioned by VoiceObjects, San Francisco

New Opportunities for Customer Service: Personalized Phone Self-Service

voice-based self-service portals frequently lack integrated reporting solutions that enable consistent analysis of caller behavior and provide actionable insights. Today, however, companies can leverage affordable approaches based on open standards to implement and control highly-developed, automated dialog systems. Today, all leading providers of interactive voice response systems (IVRs) support VoiceXML and other XMLbased markup languages defined by W3C as the premise for the development of voice dialogs. By now these standards enjoy widespread adoption and have made it possible for the telephone industry to operate personalized, automated customer service, similar to what customers experience online.

Personalization is critical to successful automated customer contact by phone

If companies want to personalize their phone portals in the way theyve personalized their Web portals, companies need to understand what exactly a customer-centered, personalized dialog is. Below are some real-life examples:

Relevant selection of menu options. For example, a DSL-only customer calling into a tele Tailored dialog length. New customers are often frustrated because a dialog system presents explanatory texts unclear or insufficiently detailed to novice users but at the same time irritating and interminable to expert users. A sophisticated voice portal can remedy menu option.

communications providers voice portal gets just DSL menu options, not the mobile phone

this by managing and supplying two different versions of all prompts (recorded messages) one short, one detailed which switch depending on the customers contact history and successful voice recognition.

Support for both voice and keypad input. Voice recognition often supports effective, intuitive dialogs. Customers still want to be able to use the keypad, however, such as when a colleagues at work. customer executes a bank transaction over the phone and doesnt want to be overheard by

Using banking as an example, some customers use telephone banking mainly to check

their account balance, others just want to transfer money, while yet another group only uses portfolio management. Ideally, the personalized phone system will recognize such user patterns, remember the transaction history and adapt accordingly. For example, the

New Opportunities for Customer Service: Personalized Phone Self-Service

system differentiates callers and presents,respectively, the account balance immediately after the call has been authorized, or an immediate offer to make a transfer or the menu option of portfolio management first.

When customers are contacting a company through multiple channels, it would be optiday, they still havent received a reply, so they make a phone call. In this example, the

mal if the phone self-service system knew about the transaction history over the Web or through e-mail. For example, A customer sends an email to customer support. By the next dialog system should answer, Hello. Are you calling about the email you sent us yesterday? And the customer, after confirming the question, is put through to an agent, who already has the email on his or her computer screen.

The list goes on ad infinitum. The implementation of personalization improvements can lead to a clear rise in the success rate of the automated dialog and a reduction in dialog length. A rise in customer satisfaction typically follows as well. Moreover, in this way the delighted customer converts to an opportunity for customer-specific cross-selling and up-selling. Accomplishing this without seeing IT investment and operating costs skyrocket remains the challenge.

Diagram 1. The diagram below shows the business value of driving a personalized caller experience. The delighted customer is more amenable to an up-sell and cross-sell and the callers use the automated system more and more, thus driving call center costs down. Furthermore, selecting the right technology solution can significantly cut maintenance costs Business Intelligence and enable more customer-centric caller experiences.

Circle of Success
Improve caller experience with personalization

Lower cost of maintenance

Enable up-sell and cross-sell

Lower call center costs

Improve automation rate

New Opportunities for Customer Service: Personalized Phone Self-Service

Selecting the right services for automation can make all the difference
The IT and telephony infrastructure needed for phone self-service is now standardized and is becoming increasingly affordable to purchase and maintain. In addition, a string of providers can now provide phone self-service as a hosted or managed service. Many companies chose to make a direct investment in designing and deploying self-service phone portals to customize the applications for their unique business needs. Its important, therefore, to decide first which common call center processes are ripe for automation. The best automation candidates (after caller identification and determining the reason for a call) are those processes that represent a high number of calls. These include routine processes, such as bank transfers or pre-paid phone card top-ups. A high rate of automation in these areas significantly eases the pressure on call centers. In the case of highly-complex services with relatively low call volume such as technical support, complex sales conversations or complaint submission, direct contact with a specialist agent is and remains the right choice. Even in these cases, however, companies can often achieve partial call automation and then continue processing the call down the line by an agent as part of the same conversation or engagment with the customer.

Phone application servers form the basis of effective implementation and operation
To implement personalized phone self-service in an efficient and cost-effective way, businesses need a platform that supports individualized, voice-dialog applications -- from design, development, testing, integration and operation to reporting and analysis. In addition, it must integrate seamlessly into the existing IT infrastructure. A phone application server offers just such a solution. Based on established Web technologies, it manages and accomplishes all project and operating tasks for phone-based self-service portals. An integrated, graphical development environment (IDE) allows designers, with the help of a standardized framework, to produce prototypes quickly, as well as implementing finished call flows. Other integrated tools look after prompts management, the creation and optimization of grammars for voice recognition, linking of backend systems, as well as the automatic production of project documentation.

New Opportunities for Customer Service: Personalized Phone Self-Service

The server processes and personalizes every single call by producing dynamic VoiceXML and thus enabling flexible dialogs. The server integrates information from existing CRM systems to tailor conversations to each caller individually. A redundant performance environment guarantees high availability and supports remote management, as well as the monitoring of telephone applications via web services and SNMP. The server operates 24x7: applications can be changed and updated while the system is running without the need for a maintenance downtime. A Web services architecture (SOA) or other established technologies integrate phone-based selfservice into existing CRM, ERP and other IT systems. Experience from an abundance of projects with VoiceObjects shows that with the help of an integrated platform as described, businesses can considerably reduce the amount of time and money spent on development, while enhancing the quality of self services at the same time.

Diagram 2. The architecture of a phone application server using VoiceObjects as an example. The central service execution environment is linked via the media platform driver to the IVR and via a connector framework to the backoffice. The platform is enhanced with graphical IDEs for producing applications, provisioning and monitoring, as well as a statistical database, in which in the running time is logged. This data can be analyzed using common business intelligence tools.

Voice, Video

Device

VoiceXML Browser
VoiceObject Desktop IDE 3rd Party IDEs
Service Creation Environment

ASR, TTS, Call Control

Web Service API

Media Platform Driver

VoiceObjects
Phone Application Server

Statistics DB

VoiceObject Analyzer Reporting Standard BI/ DataWarehouse Tools

Service Analysis Environment

Server

Connector Framework

Application Service Execution Environment

Media Platform Media Platform

Back-end Systems
Legacy, CRM, ERP, ...

New Opportunities for Customer Service: Personalized Phone Self-Service

Transparency through analysis and reporting the basis of continual quality improvement
Analysis and reporting play a central role in the constant monitoring and improvement of automated voice services. This is the Achilles heel of many existing legacy systems: frequently, businesses have only simple information like call volume, average length of calls and transfer rates is available but no data by which to judge the quality of IVR services. Here, a phone application server with analysis capabilities gives essential, actionable insights to make good business decisions. Every application that is built with the integrated framework operates without special programming automatic, meaningful, database-based logging. Reporting and analysis tools, like VoiceObjects Analyzer, in combination with existing business intelligence platforms, help companies evaluate their data in a variety of ways:

Application developers get information about which parts of the application are customerfriendly and which are not. Detailed analyses via navigation paths (dominant path analysis), the quality of the voice recognition and typical customer utterances in the context of the application allow precise conclusions to be drawn with regard to what tuning and improvements are required.

Business and marketing get information about typical customer behavior, the success of

individual application modules (e.g. an advertising campaign), as well as, most important, detailed, transaction-related automation rates (business task analysis). Finally, the economic viability and hence the success of the self-service automation system can be measured. This is often the crucial factor in deciding which self services should be improved or developed.

Phone application servers with analytics capabilities achieve even better business results when the data automatically recorded by the phone application server is correlated with an existing data warehouse. All reports allow for drill-down analysis, according to customer segment, region, product portfolio and so on, from which companies can create an enormous potential for up-selling and cross-selling activities.

New Opportunities for Customer Service: Personalized Phone Self-Service

Get a short ROI for your improvements and beat your competition
Companies neednt wait long to see the business benefits of personalized self-service. Many businesses are pleasantly surprised to reap positive results in months, and often within a few weeks, in large part because of innovative, cost-effective approaches to personalizing the IVR systems, in contrast to traditional hand-coded applications. Real-world companies using a phone application server to personalize the phone interface are getting those business results now. The experiences of VoiceObjects customers such as Postbank, Volkswagen Financial Services, or Adobe are representative. These companies have been able to change their telephone applications in hours or minutes, not days or weeks, without taking down their systems. Maintenance costs have plummeted by half. And the number of automated customer transactions that ran to a successful conclusion rose significantly. Customers benefit from an end to irritating waiting times and are pleasantly surprised to find the personalized phone portal obviously adapted to their requirements. Call center representatives no longer have to answer the same routine questions all the time, but can focus instead on giving more detailed advice or engaging in revenue programs such as add-on sales activities and marketing campaigns. Every day, customers may be one frustrating call away from abandoning your business. But costeffective personalization promotes increasing revenue and cost savings. Satisfied customers who feel that companies take their interests seriously want to use phone self-service more and continue buying more products. The future of many businesses suggests that customer service will emerge as the key differentiator in their sector. When companies value and improve their customer interface, they can actually make their customers more valuable to them. Companies have to put their customer interface to the test and put every call to work for them.

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New Opportunities for Customer Service: Personalized Phone Self-Service

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www.VoiceObjects.com
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