Speech analytics converts call centers to profit centers
Speech analytics converts call centers to profit centers
By Donna Fluss
Speech analytics is the most exciting new application I’ve seen enter the call center market in over 20 years. It is still a first-generation technology, but when used properly and accompanied by best practices, speech analytics typically pays for itself in three to nine months. It contributes to both sides of the profitability equation. Speech analytics decreases operating expenses by detecting cost savings and cost avoidance opportunities but also generates incremental revenue, identifying ideas for new and improved products, pinpointing cross-sell/up-sell opportunities and enhancing the effectiveness of marketing campaigns. It also has proven value for customer retention, by rapidly identifying competitive situations and the underlying reasons why customers close their accounts.
Speech analytics identifies customer insights
Of all transactions that flow through call centers, 90% to 95% are unstructured. Unstructured information, while valuable, is useless to an organization because it cannot be systematically analyzed. Speech analytics applications structure customer interactions and identify customer insights, needs and wants that can be hidden in phone conversations. (These applications will soon be expanded to address all channels — email, fax, chat, etc.) Enterprises can then use the data to “listen” to their customers on an ongoing basis. This empowers enterprises to enhance customer loyalty and improve the corporate bottom line by delivering the products and services that their customers want — when they want them, where they want them and in the channels that customers most want to use.
Speech analytics penetration and forecast
With 603 implementations and 176,825 seats in production as of the end of 2006, speech analytics has a long way to go before it’s considered a standard call center application. Today, it is a solution that is unique enough to offer substantial competitive differentiation. DMG Consulting estimates that within five to eight years, speech analytics will become a “must have,” as it is the only solution that can efficiently give enterprises insights into customer needs and wants in near-real time.
Speech analytics is NOT a magic bullet
Speech analytics applications have already delivered tremendous value to early adopters and their customers. Enterprises struggling to address customer attrition, call center quality, agent training, inadequate sales conversion rates and much more, have realized substantial benefits with speech analytics applications. However, I must point out that not every implementation is successful. When used properly, speech analytics does provide useful customer insights — but great results are not automatic. A significant investment of time and resources is required to tune a speech analytics application for a particular site. Also, unless an enterprise takes action, the application cannot fix any problems or take advantage of any of the opportunities identified. Companies have to create processes that allow them to put their speech analytics findings promptly to work.
Call centers are under pressure to perform
Senior executives in North America are making it clear that they appreciate the importance of call centers, but not their cost. CXOs are not trying to eliminate their service infrastructure, but they are working hard trying to curb expenses. Offshore call center outsourcing promises savings of 25% to 65%; CXOs have been and continue to be willing to risk service quality in the quest for substantial operational savings.
Call centers have to respond to this challenge and drastically reduce their cost structure. This is difficult, since over 65% of costs are people-related and salaries are not decreasing. An alternative is to develop strategies to contribute on the revenue side.
Since the first automatic call distributor (ACD) was introduced more than 30 years ago, managers of service organizations (including call and contact centers) have successfully implemented programs and technology to assist in reducing operating costs and increasing effectiveness. The time has come for call centers to focus on a function for which they are perfectly suited — generating revenue. Satisfied customers are open to product suggestions and sales recommendations from the service organization that helped them. With the right tools, call centers can take advantage of this opportunity. DMG Consulting believes that within the next 10 years, call centers will become one of the most important revenue-generating departments for most businesses. Speech analytics can help call centers make this happen.
2007 Speech Analytics Market Report
This March, DMG Consulting released the 2007 Speech Analytics Market Report. This 270-page report represents the results of over 1,500 hours of primary product and market research conducted earlier this year. This second-annual edition reflects DMG Consulting’s commitment to ongoing research and analysis of call center analytics. The report is the definitive guide to this exciting, high-value and rapidly growing contact center market segment. This year’s report provides detailed information about the speech analytics market, vendors, competitive landscape, technology, product functionality, accuracy, ROI, market share, pricing and implementation best practices. It gives users the information needed to select the right product and succeed with speech analytics. Please call me at 973-325-2954 or send an email to firstname.lastname@example.org if you are considering an investment in speech analytics. SearchCRM.com members, get a discounted rate on the 2007 Speech Analytics Market Report.