Contact Solutions has been recognized as one of the fastest-growing companies in the greater Washington DC area.  SmartCEO Magazine’s annual Future 50 awards celebrate the region’s 50 fastest-growing companies based on employee and revenue growth over the past three years.  Over 350 nominations were submitted for this prestigious award.  Contact Solutions was the only contact automation company among the winners.

Making a difference together

While we are delighted to have the recognition, I think there’s a bigger story behind this Future 50 award as well as our recent press release about our 2011 growth and the performance milestones we achieved.  I believe this is a sign that we and our customers are doing something right together.  When we deploy a new customer self-service solution, millions of people have a better experience than they did before.   If we keep working together to make customer service more efficient so it eliminates frustration and saves everyone money, we will all benefit from that success.

Read the Future 50 article about Contact Solutions

Check out the full issue of SmartCEO Magazine

Tellme provides hosted IVR services to large banks, airlines, and other enterprises who must deal with millions of inbound calls from consumers.  Tellme is in the business of automating these inbound calls so enterprises can save money by reducing the number of calls that go to live agents.

Tellme is being acquired by 24/7 Inc., an offshore call center company  and BPO that has thousands of call center agents in India, the Philippines, and Central America.  24/7 gets most of its revenue by providing live agents to handle calls for large enterprises.

A fox just acquired a henhouse

Do you see the conflict?  When more calls get automated, Tellme makes more money.   When more calls go to live agents, 24/7 makes more money.  But customer service calls handled by live agents can cost ten times as much as an automated call handed by a hosted IVR.  So when Tellme makes ten cents by automating another call, 24/7 loses a dollar of agent revenue.

If you’re an enterprise customer of Tellme (or Voxify, who was also acquired by 24/7) this has to make you wonder about goal alignment.  Under 24/7, what just happened to Tellme’s incentive to automate more of your calls?

A dime of automation revenue eliminates a dollar of live agent revenue

When your hosted IVR provider also makes a lot of money by providing live agents, you’ve got a problem.  That vendor has no incentive to improve application performance.  Why should they automate more calls?  That would reduce live agent revenue.  Why should they improve the IVR customer experience?  Happier callers might use the IVR more often- and that would reduce live agent revenue.

When a dime of automation revenue eliminates a dollar of live agent revenue, your vendor’s goals are completely the opposite of yours.  That means your vendor isn’t aggressively looking for ways to improve application performance, so you’re losing opportunities to save money and improve customer experience.

Vendors who provide both live agents and automation might argue that they’re giving you choices.  But if you were in their shoes and had to choose between a dime of revenue and a dollar of revenue, what would you do?

Reduce costs and improve customer satisfaction

You CAN reduce costs AND improve customer satisfaction in your contact center, but you have to choose vendors whose goals align with yours.  Make sure your vendor has the right incentives to keep raising the bar on application performance, a team dedicated to continuous improvement, and a track record of reducing the number of calls routed to live agents year after year.

Read this related blog post: Does your call center cost reduction strategy include continuous improvement?

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.

Many consumers embrace the value of self-service in today’s society.  Most people would much rather use an ATM than stand in line for a bank teller.  It’s not unusual to see people use the self-checkout at the grocery store while a cashier stands idle at an empty express lane.  Almost everyone pays a lower price at the self-service pump instead of paying a premium for an attendant to pump gas for them… except in New Jersey where self-service is prohibited and consumers are forced to pay a higher price per gallon.

If Doc is like most consumers, he doesn’t hate ATMs, self-serve checkouts, or pumping his own gas.  He probably chooses self-service more often than not because it’s fast, convenient, and it keeps costs down for the consumer.  Why has Doc lost his faith in IVR self-service?

Because he never had faith in the first place.  This industry has never given him a reason to believe.  So many IVR systems deliver a poor customer experience, it seems like they’re everywhere.   As a result, millions of callers have been conditioned to expect a poor experience every time they encounter an IVR.

This is a problem we can fix, and it’s a problem worth fixing.  We invested a lot of our resources to develop a way to measure customer experience accurately and a methodology to manage and improve it. We brought science to the art of customer experience, and that drives predictable results that make good sense for business.

We’re raising the bar on customer experience in the IVR, and we know from the data we’ve collected that callers have memory that affects their behavior.  If they have a good experience with an automated system, they’re a little more likely to use an automated system on their next transaction.  We can measure this effect, and we know that we can improve customer expectations one call at a time. It won’t happen overnight, but in time we’ll give Doc and many others like him a reason to believe.

 Get your IVR customer experience rating.

For example, our continuous improvement practice recently recommended a change to a client’s IVR system that will result in an automation rate increase of a fraction of one percent.  The higher automation rate will save the client about $4000 a month by reducing transfers to agents.  On the scale of operating a large contact center, $4000 in savings sounds like a drop in the bucket.

But look at what happens over time if you have a real continuous improvement program in place.  Make just one improvement every six months that generates only $4000/month in recurring savings, and soon those drops will have your bucket overflowing.  After five years you will have accumulated over a million dollars in cost savings for your contact center.

This is the value of a mature continuous improvement program for the call center, but it doesn’t come easily.  Once all of the low hanging fruit is gone, it takes a lot of expertise and analysis to keep finding new ways to improve your contact automation solutions year after year.  Our continuous improvement team has been at it for nearly a decade, and we’ve accumulated our expertise by analyzing hundreds of applications for improvement opportunities each year.

Yes, it takes a lot of work to keep raising the bar on performance, but you should demand just that.  If your IVR performance hasn’t improved in years, many may argue that you’ve long since reached the point of diminishing returns.  Don’t fall into that trap… it could cost you millions.

Unlike our competitors, we realize that the IVR can actually be a tool for improving customer experience (CX). For almost a decade, we have been singularly focused on continually improving our hosted IVR solutions in the areas of CX, contact center efficiencies, and cost savings.  We have known for years that people don’t hate IVR… they hate bad IVR.

We are proud to help our customers monitor, improve, and manage IVR solutions to create a positive CX. Through our service, we also are helping our clients foster better customer relations and opportunities for increased brand and customer loyalty.

This award is an indication that the industry is taking notice of potential in the IVR. Why dump millions into a system that actually makes your customers angry when you can work with an expert IVR provider that will make sure you receive a return on that investment with a platform that is efficient, cost-effective, and customer friendly?

If you’re losing money and customers with your existing IVR platform, maybe it is time to evaluate your provider. Download the Frost & Sullivan white paper about our CX framework to learn more about a solution that could help you stop losing and start gaining through your IVR.

Here’s a glimpse of some data that can help influence opinions and guide your call center investment decisions.  This new report (which we highly recommend) from Forrester Research, To Invest Wisely, Know The Business Value Of Diverse Contact Center Solutions, analyzes 18 types of contact center technologies used for customer service.

IVR is a business critical technology

Of the 18 technologies analyzed, Forrester rates four as business critical:

• Quality Mentoring
• Case Management
• IVR
• Knowledge Management

According to the report, solutions that focus on improving productivity are the most certain to add business value.

IVR is a powerful tool that is often misused 

The report also noted that of the four business critical technologies identified, all of them have a positive reputation – except IVR.  IVR has a mixed reputation, which is no surprise.  While IVR is known to be a safe bet in improving productivity, it is routinely ranked lowest in customer satisfaction.

This is unfortunate, because in our view the IVR is a powerful tool that is often misused.  Too many enterprises have kept poorly performing IVR systems in service for years.  Worse yet, many executives have given up on investing in their IVR systems because they mistakenly believe that they’re as good as they’re ever going to get and their IVR performance can’t be improved.

Don’t be afraid to go for the gold

Don’t fall into this trap.  As you consider your investment options, challenge the status quo.  If IVR is a critical technology that handles a large number of customer transactions in your contact center, it has too much of an impact to ignore.  Investments in IVR performance improvements can generate a fabulous ROI, but only if you demand more than just “acceptable” performance.  You have to be willing to go for the gold.

Which technology in your contact center do you consider to be the most neglected?

 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.