Is my identity at risk?  Why aren’t you answering the phone?

Zappos got hacked.  A criminal gained access to some sensitive customer information, triggering a communications crisis.  The company knew as soon as they made the security breach public, Zappos’ call center would suffer a barrage of inquiries from customers wanting to know if they were at risk of identity theft.  If only 5% of their customers called, that would be over a million phone calls- and there was no way their call center agents could handle that many inbound calls.

So they came up with an interesting way of handling all those customer inquiries: Shut off the phones and communicate only by email until the crisis passes.   This way, they reasoned, they could respond to as many customer inquiries as possible.  But imagine trying to call Zappos because you’re worried about the cyber attack, only to get a busy signal and find out they will communicate with you only by email.  Though Zappos did the best they could with the resources they had in place, their constraints led to a customer experience unbecoming of their high standards.

All I really want is a ¼” hole

As part of their corporate customer service strategy, Zappos decided to have live call center agents answer every customer call.  They surely knew this was the most expensive way to provide customer service, but they believed customers always preferred speaking to people instead of interacting with automated systems.  This faulty assumption led to their customer experience disaster.

As the saying goes, customers don’t buy a ¼” drill because they want the drill.  What they really want is a ¼” hole.   Customers are no different when they phone your call center.  Some may like speaking to a live agent, but what customers really want is to have their questions answered and issues resolved quickly, easily, and at a reasonable cost.  That’s exactly what well-designed contact automation systems can provide.

How to shine during a crisis

Imagine how the Zappos crisis might have played out differently if they had made a different core assumption.  Instead of designing their customer service delivery around the exclusive use of live agents, what if they had focused on providing answers and resolving issues for their customers as quickly and easily as possible?  That likely would have led them to a mix of automation and live agents.

A hosted IVR system easily could have handled the million (or more) phone calls Zappos expected.   Rather than let calls go unanswered, Zappos could have offered an initial message in the IVR that acknowledged the security breach and addressed most customer concerns right at the beginning of the call.  This alone would reassure some customers and take pressure off of live agents who might then be able to keep up with the remaining call volume.   That would have been a much more customer-friendly solution than shutting off the phones.

Read an eBook about IVR customer experience.

Automation—done right—could have helped Zappos live up to their reputation as a leader in customer service, especially in a crisis. When you make your core assumptions about how to deliver customer service, make sure you keep focused on what customers really want.

 Change happens

Just because you’ve achieved optimization doesn’t mean you can comfortably stop managing your IVR performance. First of all, change happens.  Caller expectations shift over time.  Your customer service requirements may change due to new regulations.  Your business may further standardize or customize its product offerings.  All of these things can affect your optimization point, so full IVR optimization isn’t some static goal you achieve- it’s a dynamic goal that you have to keep pursuing.  Once you achieve your goal, you need to monitor performance and be on the lookout for material changes in the environment that could move your optimization point.

 Align performance with business priorities

It’s challenging to manage a business.  You often have to make decisions that affect both cost savings and customer experience, and those decisions often have a huge impact on contact center operations.  If IVR Optimization Point is one of your call center metrics, you can make informed business decisions that keep your IVR performance in line with business priorities.

After you have reached your IVR Optimization Point, business priorities may compel you to take further actions.  For example, lowering costs may become a business priority.  You could lower your contact center costs by automating more calls, but that cost savings would come at the expense of customer experience.  Should you do it?

 Informed business decisions trump educated guesses

If you check out the graph, such a move would shift your IVR performance up and to the left of the Optimization Point.  Higher automation rate, but lower customer experience rating.  This is similar to the decision Netflix executives made when they changed their pricing plan and triggered some customer backlash.  The IVR Optimization Point metric gives you the data you need to make an informed business decision based on data instead of educated guesses.  Once you know how much a change will return in savings, you can decide if it makes sense for your business to accept the corresponding hit on customer experience rating.

The reverse scenario is also common.  Your customer service may become a strategic priority for your business, and you may be willing to accept higher costs to improve your IVR customer experience rating.  This shifts your IVR performance down and to the right of your optimization point.  Should you do it?  If you’re tracking performance diligently, this becomes a much easier decision.  With data in hand, you’ll know how much your business will have to invest (through foregone cost savings from lower automation rates) to achieve a desired improvement in customer experience.  IVR Optimization Point is a call center metric that will lead to better decisions and improved performance.

Read the first post in this series.

 Measure performance trends in detail

If your IVR application performance hasn’t improved in years, don’t take that as a sign that it’s as good as it’s ever going to get.  It might simply be a sign of neglect, and by settling for IVR performance that’s “good enough” you could be missing out on far more cost savings than you think.  Make sure you are tracking both automation rate and IVR customer experience rating so you have a firm grasp on IVR system performance at all times.  Monitor performance trends in detail and review performance regularly so you can understand current performance and identify opportunities to improve.

 Benchmark IVR performance by industry, application category

Once you have a clear understanding of where you are, it’s time to look outside your organization to get a sense of where your IVR performance could be.  Benchmark your IVR performance against others in your industry and against similar applications outside your industry.  Compare both automation rates and customer experience rating so you can plot the current state of optimization others have achieved.  As you acquire this data, best practices and top performers will emerge and you will gain a quantitative perspective on a target optimization point for your own IVR system.  Contact Solutions uses IVR performance benchmarks by industry and application category to set optimization point targets for our clients, and we continually track progress towards that optimization point as well as savings achieved along the way.

 Horseshoes, hand grenades, and diminishing returns

All this data collection, benchmarking, and analysis necessary to fully optimize your IVR system is a lot of work.  You may be wondering if a system that’s been humming along for years more or less to the satisfaction of both your callers and your executives isn’t close enough to its optimization point that it’s not worth the effort to improve it.  While it may seem as though you’ve hit a point of diminishing returns, the vast majority of IVR systems we analyze in detail are leaving far more money and customer satisfaction on the table than you might think.  The reason most clients underestimate the ROI from further optimization is this: even small improvements to automation rate result in cumulative cost savings.  Like compound interest, they add up month after month, and the ROI can be fabulous because it often doesn’t take a large investment to make application improvements necessary to unleash the savings.  If your call center metrics don’t include IVR optimization point, these cost saving opportunities will likely fly below your radar.

 Read the next post on this topic.

Consider your IVR… Really

Your IVR system is most likely the front end to your contact center, making it one of the highest volume points of customer interaction anywhere in your enterprise.  Yet most IVR systems suffer from management attention deficit.  You assume they’re fully optimized because they’ve been running for years and they never seem to get better.  So you put some sparse measurements in place – maybe track IVR automation rates and results from the occasional caller survey- and turn your attention elsewhere.  If this sounds like you, then you’re rolling the dice when it comes to optimizing your IVR application performance.

 What is your IVR optimization point?

In order to understand whether your IVR system is fully optimized, you first need to measure IVR application performance. We use two key measurements to gauge IVR application performance:

• Automation Rate
• Customer Experience Rating (CXR)

Automation rate directly translates into cost savings because it’s much less expensive to provide customer self-service through call automation than it is to have a live call center agent provide the same service.  Customer experience rating is a comprehensive, quantitative measure of IVR customer experience based on a combination of caller surveys and detailed system performance data.

Almost any change you make to an IVR system will affect both automation rate and CXR.  If you really want to manage your IVR system performance, you should keep making improvements that drive up automation rates (to increase cost savings) as long as you at least maintain (or improve) the customer experience rating.

In other words, save as much money as you can- as long as you keep your callers at least as happy as they were before the change.  As long as you can keep doing this, your IVR isn’t fully optimized and you’re leaving money on the table.  That’s why IVR Optimization Point is such an important call center metric that you should be tracking with scrutiny.

IVR Optimization Point Defined

The IVR Optimization Point is defined by the maximum automation rate you can achieve without causing your customer experience rating (CXR) to drop.  When you can’t generate any more cost savings without forcing a negative impact on caller experience, you have reached your IVR Optimization Point.

Reaching your IVR Optimization Point should be your first goal – the driving force behind any improvements you make to your IVR applications.  But how do you know when you’re really there?  If your IVR system performance hasn’t improved in years, does that mean it must be already fully optimized?  Or has it just been neglected?

Comment on this post and tell us where you think your organization stands on reaching its IVR Optimization Point.  Subscribe to this blog and get notified when we post the answer to: How do you really know if your IVR is at its Optimization Point.

Read the next post on this topic.

Do you know where Customer Experience ranks among the big and important trends in the hosted contact center market? Our friends at Frost and Sullivan just released a report, North American Hosted Contact Center Markets, that recognizes a very encouraging trend.  The report considers a wide swath of the contact center market, including IVR, ACD, outbound and proactive customer contact, customer chat, and agent performance applications such as quality monitoring, workforce management, and analytics.  These are two big trends that we find particularly interesting:

Big Trend 1:  Balanced cost containment and customer experience

The report says there is a shift from a focus on just cost containment to a balanced focus on both cost reduction and customer experience.   This is very consistent with our own market observations as we’ve seen many executives struggle to achieve the right balance between customer experience improvements and cost reductions in the contact center.

An example of how to reduce cost and improve customer experience can be found at Fidelity Investments.  As a winner of the 2011 Voice Of The Customer Awards from Forrester Research, Fidelity noticed customers having trouble with account authentication in the IVR.  The fix they implemented led to higher customer satisfaction and an estimated $4 million in annual cost savings.

Recommendations: Consider improved customer experience in the IVR a top priority because improvements there can yield big results.  Also, ask any vendor you’re considering  to explain how mature their IVR customer experience practice is and how they can provide the data you need to make informed business decisions.

Big Trend 2: Enterprises Increasingly Adopting Hosted Contact Center Solutions

Frost says that more enterprises are considering hosted as a viable option over premise systems. Brian Hopkins said in a recent blog “What’s not up for debate is the impact that service-enabling disruptions such as cloud, in all its forms, are having. They fundamentally shift IT service acquisition and consumption models.”

We also have seen this trend.  More enterprises- even those who were once die-hard advocates of premise IVR- are opening conversations about hosted solutions.  We’ve also seen those conversations begin to expand from a basic hosted vs. premise infrastructure decision to a more comprehensive viewpoint that includes application performance and customer experience as an integral part of the deployment decision.

Recommendations:  Business leaders should consider whether adopting a hosted model will fundamentally change their ability to optimize resources available to their business.  Most importantly, consider the impact hosting could have on application performance, particularly if your chosen vendor has a mature practice around improving customer experience and reducing operating costs.

Netflix executives have since admitted that they knew this decision would upset some of their customers, and they planned for the backlash. In fact, they expected some customers would be upset enough to downgrade or cancel their Netflix subscription plans. Yet the executives believed it would be a good move for the long-term health of the business. Streaming video is much less expensive to deliver than mailing DVDs back and forth. If Netflix can steer customer preferences toward the lower cost delivery model, the decision will result in a more profitable, sustainable business that’s good for both Netflix and its customers.

So where was the problem? In the wake of a shareholder meeting in which Netflix executives spent most of their time defending their pricing decision, the company continued to be the target of sharp criticism. Investors weren’t satisfied with the justification behind the pricing decision and were worried that the increased margins wouldn’t offset the loss of customers. In other words, the perception seemed to be that the executives made an educated guess and didn’t have enough data to support their risky decision.

In our business, we often see customer service and contact center executives struggle with similar decisions. Like mailing DVDs back and forth, answering customer calls with live agents is the most expensive way to deliver customer service. It’s much less expensive to automate routine interactions through IVR, text messaging, or other channels, but sometimes higher automation rates can reduce customer satisfaction. The problem is, automation rates are easy to measure but it’s difficult to predict how changes in automation will impact the customer experience. Executives who have to make decisions affecting both cost and customer experience are forced to make educated guesses.

This is the problem we solve with our customer experience initiative at Contact Solutions. We measure customer experience in a unique way that captures detailed data from both caller perceptions and their actual experience in the IVR. Combined with our advanced analytics and Continuous Improvement methodology, we can predict how changes in automation will impact customer experience.

Our data-driven analysis takes the guesswork out of some difficult decisions customer service and contact center executives have to make. We don’t know how much data the Netflix executives had to support their pricing decision, but we do know that difficult decisions are a lot easier to defend when you have plenty of supporting data. Wouldn’t you rather know that if you made THIS change to your IVR you’d get THAT much improvement in automation, lower your costs by THIS much, and impact your customer experience rating by THAT amount? That’s how we can make your life easier as a decision maker.

Read another post on Informed Business Decisions

If you’re serious about improving anything in business, you start by measuring it.  Are you serious about the customer experience in your IVR? Maybe you should be, given that your IVR can generate more customer impressions than a TV ad at the Super Bowl each year.

Contact Solutions has developed a comprehensive way to measure the IVR customer experience that takes into account both customer perceptions and detailed system performance data.  We call this our Customer Experience Scorecard, and we use it to benchmark IVR application performance so we can accurately measure and improve results for our clients.  If you can spare just five minutes, click here to try a shortened version of our scorecard so you can quickly see how your IVR measures up.

This post is the last in a five-part series in which we’ve shared our philosophy and the key components necessary to create a truly accurate customer experience measurement system.  Here’s a recap:

Part 1: We introduced the concept that customer surveys alone are not enough to measure the customer experience accurately. While surveys have long served as the primary method of measuring customer satisfaction, they focus only on the customer’s perception of the service received.  Effective analytics provide the details necessary to measure intent and interaction, which we also need in order to capture a true picture of the customer’s experience.

Part 2: We discussed the value of establishing a Customer Experience Rating (CXR).  The CXR provides an initial baseline so we can measure the value of potential improvements and make those changes that have the best possible impact to your customers’ experience.  Establishing a CXR also allows you to determine an optimization point (that point where automation and CX are maximized for your business – look for more on this in future blogs).

Part 3: We identified the measurement criteria necessary to create a set of questions that will allow you to measure the Customer Experience your application delivers in terms of intent, interaction, and perception.  We selected these questions based on our ability to establish, through our analytical research, their relevance to Customer Experience.

Part 4: We showed how it’s critical to have accurate analytical information to measure CX.  If you want to improve perceptions, you must understand in great detail the reality underlying those perceptions.  Surveys alone can’t do that for you.  You can identify how and where an IVR experience influences caller perceptions, but only if you have a robust collection of analytical data.

Customers no longer accept poor service, even in channels traditionally known for bad service.  But customers don’t hate IVR, they hate bad IVR.  If you get an effective program in place to measure and improve your IVR customer experience, you can leave millions of positive impressions with customers each year.  It’s cheaper than a Super Bowl ad, and conceptually it’s as simple as shampooing your hair: measure, improve, repeat.

If you want to measure the customer experience (CX) in your IVR, chances are you’re doing surveys.  Surveys are a great way to capture caller perceptions, but they don’t give you an actionable measure of customer experience.  That could be a big problem for you if it’s your job to figure out how to make things better.

In the service business, perception is reality.  If you want to improve perceptions, you must understand in great detail the reality underlying those perceptions.  Surveys alone can’t do that for you.  You can identify how and where an IVR experience influences caller perceptions—but only if you have a robust collection of analytical data.

What information is the most essential to determining CX within your IVR?

Everyone is familiar with the two most common IVR performance factors, 1) average time in the IVR, and 2) the transfer rate.  While these may be indicators of IVR performance, they don’t tell you enough.  Call duration and transfer rates do not truly measure what directly impacts IVR customer experience.

Instead, consider the following reports that provide more detailed analytical data that directly affect customer experience in the IVR:

• When the customer cannot self-serve, use of Computer Telephony Interface (CTI) successfully transfers customer information, authentication, customer persona, goal of call, etc., to the customer service representative.  CTI State and CTI Detail Record reports provide the data necessary to measure CTI effectiveness.
• Measure how often customers are able to complete their self-service goals.  Task and Goal Completion reports provide this information.
• Measure the effectiveness of host system integration to determine if information is accurately and consistently exchanged between the IVR and the required host or legacy systems.  A Host Transaction Performance Detail report shows the consistency and accuracy of the IVR/Host interface.
• Is the application personalized to provide customer-specific information based on prior behavior?  Comprehensive Call Data, Application Data, Check-Point and Exit Point reports provide the information necessary to understand this capability.  Successful personalization results in increased percentages are reflected in the Goal Completion and Self-Service reports.

You’re probably thinking these reports seem pretty straight-forward, so why is it difficult to measure a customer’s experience when using an IVR?  The answer is simple – most IVR systems do not collect enough of the data necessary to create the right reports with enough detail.  At Contact Solutions, we designed our cloud-based solution with these analytics in mind.  Our extreme logging capabilities provide us with data on every activity performed within an application so we are able to develop reports that provide information critical to measuring CX.

Please join us for Part Five where we pull all of the previous discussions together to show you how it is possible for you to establish a customer experience rating for your IVR.

Read the previous installments in our series:

Part One

Part Two

Part Three

You should take a look a Kerry Bodine’s keynote “The Customer Experience Ecosystem” that she delivered at Forrester’s Customer Experience Forum.  While the true complexity of all the interactions may overwhelm you at first – watch the video again!  I think taking the CX Ecosystem view will help you focus on the most important areas when developing a customer experience program.  For more on Kerry’s CX Ecosystem thoughts check out her blog.

In Part 1, we talked in general terms about customer experience (CX) through the IVR, and in Part 2, we discussed the importance of establishing a customer experience rating related to the IVR. Now we will look at the measurement criteria necessary for effectively determining/establishing a customer experience rating (CXR). Remember that in her paper “Top Ways to Improve Phone Self-Service Experiences” Forrester’s Adele Sage pointed out that the standard metrics (automation and containment rates) used to measure IVR effectiveness may not reflect the true impact of an IVR on customer experience.

So what do you use to measure a customer’s experience through an IVR? The answer to this question is actually straight-forward – you just have to focus on the customer. Each customer has a goal when using the IVR application and has feelings about the way the IVR helped them complete that goal. Contact Solutions has developed a CXR system based on the following focus areas:

• Intent: The caller’s reason for using the system, Intent, is measured using post-IVR and post-agent surveys, as well as a variety of detailed reports.
• Interaction: The specific steps or actions taken by callers in an effort to complete goals, Interaction, is measured and evaluated using system-performance reports, actionable summaries, best practices, and expert analysis.
• Perception: The emotional value a caller places on the ease and efficiency with which goals were accomplished, Perception, is evaluated using post-IVR and post-agent surveys.

With these focus areas in mind, we developed a set of questions to serve as the foundation of our CXR system.. The core component for selecting a particular question was relevance – why is this important to customer experience? Once we identified a question we established a measurement system tied to that question and applied it to the each valid response to the question. This provided us with an accurate method of measuring compliance and establishing a valid score.

Some of the standard reports necessary to establish an accurate CXR include: task/goal completion details, call record data, Computer Telephony Interface (CTI) details, exit point, host transaction, and check-point reports. Contact Solutions develops these reports using data collected by our cloud-based IVR platform. These reports, combined with questions that directly impact CX, create a CXR unlike any other in the industry.

Using the process above, Contact Solutions created an IVR Customer Experience Scorecard with 17 questions grouped into three areas: Intent, Interaction, and Perception. Here’s an example of one of the questions from the Intent group:

Question:

Does the IVR ensure the customer’s intent is preserved from their IVR interaction when connected to a live agent?

Possible Responses and associated scores:

• Information transferred Includes: Caller Type, Authentication Information, Goal/Intent, and Tasks Completed/Attempted. Score=4
• Information transferred Includes: Authentication Information or Task/Goal information. Score=3
• No information is transferred. Transfers are only skills based and not goal based. Score=2
• No information is transferred. Standard queue-based routing is used. Score=1
• Unknown. Score=Not Scored

Weighing this question against the criteria established above:

• Relevance: Failure of a system to transfer information already provided to a customer service agent is one of the top customer complaints relating to IVRs. Automatically including this information makes customers feel the system is supporting their attempts to complete their goals and that they are not wasting time repeating information.
• Establish a Scale: The scale clearly shows increasing levels of automation. The “Not Scored” option allows for those cases where there is no actual measurement capability.
• Ability to Measure: Contact Solutions’ platform has been designed in a manner that allows the collection of large amounts of analytical information on an application’s performance. This information allows us to publish a CTI Detail Report which is used to evaluate the effectiveness of applications CTI.

As you can see, it’s not easy to develop a scorecard that accurately measures the CX delivered by IVR An effective scorecard not only includes the use of surveys but must also include detailed analytical data to measure a customer’s intent, interaction and perception- far more data than more IVR platforms collect. Check out a sample of our CX Scorecard: Take our 5-Minute CX Survey and we’ll send you your score and personalized recommendations to help improve your system.

Join us for Part Four where we discuss the role analytics play in formulating a CXR for your IVR application.