May 2006

Touch-tone and speech-enabled interactive voice response (IVR) systems have a bad reputation and deservedly so. Companies have created unnecessary frustration and dissatisfaction for customers by forcing them into a maze of automated IVR options, making it difficult to reach live agents. This situation is a product of the mistaken belief that use of the self-service IVR option will decrease if customers have easy access to live assistance. This is simply not good service and customers will find a way to reach agents, no matter how difficult companies make it for them. The good news, though, is that there are now standard ways out of most IVR applications and lists of default keys are finally becoming available to the public.

IVR Best Practices Drive Success

There are many proven IVR best practices that improve customer satisfaction and increase the IVR utilization rate. Although applying the best practices may be costly in the short term, the expense is outweighed by the long-term benefits in cost savings and customer satisfaction. A well-designed IVR will actually promote customers' willingness to use the self-service option. A positive experience with the system's convenience and ease of use will make a customer likely to use the IVR again and even try out additional automated options. (Unfortunately, the reverse is also true, as one negative experience can drive a customer away from the IVR permanently.)

Before companies can address their IVR challenges, they must accept the fact that customers are unhappy with the current system. A poorly designed IVR is unacceptable. Poor design includes systems where customers have to re-enter account or other personal data when transferred from the system to live agents. IVR scripts must be updated and re-written regularly in order to maintain their effectiveness. Upgrading from touch-tone systems to speech recognition is another opportunity for IVR applications to perform significantly better.

Make it Easy for Customers to Access Agents

The most important and fundamental best practice is to make it easy for customers to access agents. Studies have found that being locked into the automated system is customers' leading complaint. Keep in mind that providing access to agents will not significantly reduce IVR usage. Instead, it will prevent customer aggravation and dissatisfaction and ultimately promote use of the self-service option.

It's also essential to limit the number of automated options in the IVR. Customers are only human and cannot remember more than a few options at a time. Providing too many choices will only cause customers to forget the earliest selections and opt out to agents, defeating the purpose of the self-service system. A limited number of well-targeted choices, responsive to the customer needs, will increase customers' inclination to use your IVR.

The Script Matters

Speech recognition is a friendly and flexible user interface that should be accompanied by a script that makes the system easy to use. IVR scripts must reflect customer wants and needs. Script writing specialists, not programmers, are the best choice for creating an appealing and efficient experience. Scripts must be adapted as business needs change or the system is enhanced, such as when speech recognition technology is introduced. As scripts are updated and changed, it's important to test them on customers before fully rolling them out. It's also necessary to review and monitor the script on an ongoing basis to make sure that it is still addressing customers' preferences, which change over time.

Final Thoughts

IVR applications are powerful solutions with flexible technology that is capable of so much more than it is being used for today. These systems can handle most of the calls that do not require costly human assistance, significantly improving the overall performance and financial benefits of the customer service environment. It is critical to implement best practices so that companies can leverage the power of their IVRs and turn these applications from hated technology into valuable, customer-friendly cost saving tools.

Regards,

Donna Fluss

Principal, DMG Consulting LLC

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What are the main benefits/disadvantages of outsourcing my contact center? What types/sizes of contact centers should outsource?

This is a very complex question and the answer will vary based on many factors, such as whether you are building your first contact center or considering moving an existing one to an outsourcer. Another consideration is the purpose of the contact center - if your contact center is mission critical and/or addresses highly sensitive information, outsourcing is highly problematic. If your contact center handles mostly generic transactions, then outsourcing could be a more practical solution.

Assuming you already have a contact center today, the main reasons to outsource are:

To reduce operating expenses - you'll need to save more than 15% to 20% annually to make it worthwhile. (Cost savings is the primary reason that companies outsource.)
To find expertise or technology that does not exist within your own company - if an outsourcer has great depth and expertise in the types of transactions that your company handles.
To provide additional resources that your company is not able to find -many times companies outsource because they cannot build and staff a contact center quickly enough to address a need.
To provide back-up or contingency - this may include providing after-hours live support that is not available in your current environment or as back-up to handle an unexpected surge in call volumes.
To get certain assets and full-time equivalents (FTEs) off your books.

The main reasons not to outsource are:

Outsourcing could present major confidentiality risks to your company and you have no way to guarantee security of customer information or company resources.
Customers will not tolerate an outsourcer - using an outsourcer will drive customers away.
Outsourcing will cause a great deal of bad PR and result in a large number of lost customers.
The company cannot find an outsourcer that is a good match in terms of technical expertise, culture, work ethic and/or language.
It will cost more to outsource than to keep the activities in-house. (Look at costs over a five-year period)
The contact center is so integrated into other business activities that outsourcing will negatively impact these other operating areas and disrupt the business operation.

Organizations that probably should not be outsourced are mission-critical functions or activities that are tightly integrated into other business activities. Otherwise, anything else can be outsourced, under the right circumstances, regardless of the size of the operation. Whether or not these operations should be outsourced then becomes a matter of management priorities and cost.

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