Automated Speech Recognition Changes Call Center Economics

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Telemarketing as we knew it has changed since the Federal Trade Commission's do-not-call registry took effect. For inbound, marketers are looking at speech applications to automate certain predictable calls, replace their interactive voice response touch-tone systems or offer new services.


Cutting costs involved with live agents is one reason. The other is the better use for nearly repetitive tasks. These marketers, in many cases, have specific projects this year that will require speech applications.


Voxify Inc., Alameda, CA, is one such supplier. It creates what it calls automated agents with the conversational skills to handle advanced customer service calls such as reservations, sales and account requests.


The company's automated agents model the intelligence and personality of a trained live agent, letting them engage callers in sophisticated dialogue to perform advanced customer service functions. Automated agents are trained in specific industries and call functions and are offered in a managed-service model. Voxify's automated agents take calls for marketers like Continental Airlines, Dreamworks SKG, Wyndham International, Aer Lingus Airlines and Travelocity's World Choice Travel.


Wyndham uses automated agents to answer and direct calls to the best available resource and provide hotel locations. The hotel chain estimates that the costs of its automated agents are 20 percent of the agent cost per call. Wynd-ham plans to automate chain-wide with an estimated 45 percent of all calls to be handled completely by an automated agent.


World Choice Travel sells one-night hotel reservations with an automated agent. This is a new revenue stream for the company. Direct marketer Hammacher Schlemmer uses automated agents to handle order status and catalog requests and changes.


Voxify's automated speech recognition technology changes the economics of the call center. Though it misses the personal one-on-one interaction of a call with a live agent, Voxify touts high usability and functionality as its unique selling points.


"This means that the Voxify automated agent can converse with a caller to obtain the information needed to take an order, book a hotel reservation or reconfirm a flight reservation," said Voxify CEO Adeeb Shanaa. "Automated agents can handle these lengthy and complex calls without the caller having to conform to structured dialogue or getting frustrated and hanging up."


Voxify's technology is provided as a fully managed service with no IT burden or capital costs. It claims its automated agents are 50 percent to 75 percent cheaper than live agents.


Shanaa discusses his company and telemarketing's future.


Where does the call center industry stand, both for inbound and outbound?


There are many call center trends today. For inbound, the calls keep coming. Consider a few factors. Take multichannel effects. Despite some catalogers experiencing over 50 percent of the sales via a less-expensive channel like the Web, there's a relationship between the number of Web purchases and the number of calls the call center gets from the same customers.


A recent IBM study showed that of those surveyed, 57 percent liked Web self-service. Of those using Web self-service, 50 percent failed and had to call the company or send e-mail.


As a Voxify example, Continental Airlines tells customers that it's unnecessary to reconfirm their reservation once they have made it online. Yet Continental estimated that as high as 10 percent of its 5 million calls a month involved reconfirmations. We've helped Continental meet the demand for this service by automating reconfirmations.


What about outbound calls with the DNC regulation?


Investment has increased in technology providers and outsourcing. Companies have turned to technology and other service providers to help perform outbound calls that comply with the new regulations.


Proactive customer service is another trend. Companies are talking to us about outbound calls to existing customers to increase customer service and increase cross-sell rates.


We see two categories of proactive customer service. One, callers sign up for notification alerts so that they are called when their prescription is ready to be picked up or their flight has been delayed. Two, companies use speech to increase customer service. For example, pharmacies perform outbound calls to patients when there is important news on their drugs. A recent example is the Vioxx heart attack warnings.


Automated voice systems have been around for a while. Why haven't they taken off?


Until now, speech systems lacked the usability to handle complicated calls. Without the ability to have a customer service conversation it was impossible for a caller to complete an order or make a reservation with a speech system. The first-generation speech systems suffer from poor usability, causing caller frustration and, as a result, poor adoption, greatly diminishing the potential value of these systems.


What risks do marketers run without services such as speech applications? And what about complaints for not having human interaction on the telephone?


Speech applications are starting to be able to handle the inexactness of human conversation, letting callers successfully use these systems to complete transactions. In 2005, the best applications will offer high usability and functionality. This means they can converse with callers to market products, take orders, book reservations and do other call functions with very high customer satisfaction.


Marketers or retailers that do not use speech systems will be unable to offer new services and improve customer service because of their own cost constraints. Speech applications change the economics of the call center by being able to drive revenue and lower costs.


There is still a place for live agents and human interaction. Speech applications give call centers another resource pool for handling certain types of calls. But increasingly, callers are more concerned with wanting to get a transaction done quickly and efficiently than speaking with a live person. Look at the history of the ATM and you'll see a similar evolution.


How much could a marketer or retailer save with an automated speech application? What about reduction in staffing?


A marketer or retailer will see a 50 [percent] to 75 percent reduction in cost. There may be a reduction in staffing or a redeployment of resources to higher-value calls.


Moreover, by buying the managed-service model from application vendors, the marketer or retailer will benefit from the continuous technology advances these vendors provide without any IT burden or capital costs.


Automated agents like ours don't take coffee breaks or go to lunch. They don't get paid while sitting and waiting for calls to come. And they consistently ask the same questions in the same way, with the same image and brand that companies want to convey.


This consistency can help companies ensure regulatory or other service requirements and standards, such as describing the return policy or asking federal security questions. Because call centers traditionally face high staff turnover and training needs for live agents, this guaranteed consistency of service is a win.


How much are call center costs, on average?


The cost for live-agent-handled calls ranges from $3 to $9 per call, depending on the type and length of call. Frost & Sullivan estimates that call center calls cost, on average, $1.50 per minute.


Do speech applications reduce the need for outsourcing and offshoring?


Yes. Call center managers view speech applications as part of their pool of resources to handle certain types of calls. Speech applications offered as a hosted managed service have the capacity to handle call volume increases immediately on demand, which is not feasible with offshore call centers using live agents.


Which industries benefit from speech applications?


Industries that have a high volume of calls should look at which types of calls can be automated. Retailers have a high number of calls for order status, catalog requests and change in customer information - calls that can be easily automated.


Sales calls can be automated depending on the complexity of the product. In addition to the retail category, others like hospitality, airlines, banking, utilities, telecommunications, insurance, healthcare, government, entertainment and technology all have types of calls that can be automated.


So is it worth it for marketers to invest in their inbound infrastructure?


Companies should always welcome customers to call. Why do you spend millions of dollars to encourage customers to call and then rush them off the line as quickly as possible?
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