Little-known secrets - interactive voice response technology - Technology Information

Communications News, Nov, 1999

Achieve your bottom line and improve your corporate image using IVR technology.

Extensive research has proven that interactive voice response (IVR) systems can have a decisive and dramatic impact on the way a company is viewed. Although IVR technology has been an industry in its own right for several decades, interest is now beginning to explode. People have become aware of the unique ability that this technology has to turn old-fashioned touch-tone phones into virtual computer terminals. As awareness grows, a company that uses a properly implemented and carefully scripted application is viewed as more caring, innovative, and showing a greater response to customer needs than a business that uses only live agents or operators.

Although a commonly heard statement is that customers want to talk to a "real person," surveys prove that this is incorrect. For example, a study of 100 first-time callers to a major company's automated order-entry system showed that an overwhelming majority said they either preferred an automated voice (38%) or it made no difference (42%). A stunning 98% of customers rated the service as good or excellent. When asked for comments, customers responded that the service was courteous, efficient, professional, attentive, and even friendly.

Imagine a banking customer who needs to find out which checks are still outstanding is balancing his checkbook while he watches the late show. Or a person filling out a loan application who needs to check the pay off on his mortgage but is subjected to an endless message of "All customer service representatives are busy. Please stay on the line." Before IVR technology, all of these consumers were stuck. Few companies could afford the luxury of 24-hour call-center staffing, and customers weren't willing to pay a premium for that convenience.

Call centers have long been a central part of business operations for volume-driven companies. But research has shown that a high percentage of inbound calls are for basic, repetitive requests, such as "What's your mailing address?" and "What's my account balance?"

Developed more than two decades ago, IVR technology began with such simple--but popular--applications as time of day and temperature reports. Ronald Reagan used it to dispatch information. Love it or hate it, voice mail is a widely used application.

Some of the first IVR systems were used by bank tellers to verify that customers had enough funds in their accounts before cashing their checks. These were complicated to design and much more expensive than today's systems. IVR came to the forefront in 1987--courtesy of the Home Shopping Network (HSN)--as a system fondly referred to as "Tootie," publisher Marc Robins wrote. With the help of "Tootie," viewers could order enough cubic zirconium to fill a closet by pressing the keypad of their touch-tone phones. "Tootie" is still filling more than 50 million HSN orders--half of all callers order products--every year.

From credit-card activation to ordering pay-per-view movies, from registering for college courses to automated enrollment procedures for company benefits, IVR technology has benefited businesses.

Today, IVR technology has advanced to include not only speech recognition but also interpretation of speech, capturing the nuances of regional accents; filtering out pauses, stammers, and background noise; and segmenting key words and phrases. For a company, Bob Smith from XYZ, Inc. can call at 9:30 at night and leave a message for his sales rep, even if he can't remember that person's name. For that matter, a hundred Bob Smiths can all call at the same time, and none of the calls will ring busy, be dropped, or put on hold. And it can be accomplished without the expense of hardware upgrades.

The systems work equally well with outbound calls. One national auto-leasing company has made extensive use of this type of system to contact lease customers to discuss their end-of-lease options. Using a database, automatic dialers determine if a call is being picked up by an answering machine and then deliver a recorded message. Calls answered by a customer are handled by a live operator.

Another interesting outbound application is the use of CTI (computer telephony integration), interactive group response systems, and other technology to conduct market and perception research and public-opinion polling. Automated telephone surveys provide instant feedback on any number of subjects. The same system can be used, for example, to gather response to the value of a conference or a meeting.

Perhaps the most prevalent example of IVR's ability to improve customer service and make better use of live operators is AT&T's directory assistance. Combining IVR and speech recognition, customers are prompted to provide first the requested city and then the listing. When listings are not immediately matched, or pronunciations are not understood, customers are quickly transferred to a live operator who can assist them.

E*Trade, which has received PC Magazine's Editors' Choice Award as the nation's top on-line investment-services site, uses Phone Interactive's EZ Automated Operator to handle calls for company brochures and other basic information. "A company like E*Trade has customers who are used to the speed and convenience of the Internet and having cost savings provided," says Kurt Draxl, vice president of Phone Interactive. "IVR technology allows E*Trade to uphold the standard of service that its customers demand while keeping costs at a level that helps the company maintain profitability."