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Benefits of using IVR technology in the Call Center

Interactive Voice Response technology or IVR as it is most commonly known is primarily used to automate customer centric business processes and relieve the pressure on live agents handling consumer calls.

IVR systems automate inbound call processing by retrieving information according to the caller's requirements from enterprise databases that are connected to the IVR systems. The IVR system contains hardware and server software that can analyze touch-tone inputs and perform signal processing for speech inputs.

Based on the information entered or spoken by the caller, the IVR system allows the caller to both perform self-service and access the required data, or routes the caller to a particular agent group in the call center equipped to handle such call requests. IVR technology is widely considered to be the most prevalent technology in call centers next to Automatic Call Distribution (ACD) technology. IVR technology has four primary functions in the call center of a contemporary organization, or an outsourced call center for that matter.

  • It routes the calls to the appropriate person or department based on touch-tone or speech inputs
  • It identifies and authenticates the caller and subsequently pops up the information on the screen of the agent who will be handling the call using Computer-Telephony Integration (CTI) links.
  • It allows for segmentation and differentiation of the callers based on the nature of relationship of the calling party with the business entity. This allows for premium service in call handling.
  • It provides an alternate experience for the caller for self-service without having to talk to a human agent.

IVR is a key technology in many call centers in order to reduce costs for a variety of reasons, some of which are outlined below:

  • It automates customer interactions with the enterprise databases, thus reducing live agent costs
  • It filters the inbound call traffic and smoothes the peaks and troughs in the call center queue, thus adding a degree of predictability to call volume modeling.
  • Advancements in speech technology increase the customer friendliness of the underlying IVR system, thus increasing customer satisfaction and customer retention in tough economic times.

Apart from the most basic benefits of IVR in the call center space (outlined above), IVR acts as the foundation for the increasing popularity of self-service. Self-service is the method by which a caller obtains the information he needs from an enterprise database, without having to engage in a conversation with a live agent, unless and otherwise needed. A caller can self-serve himself through an Interactive Web Response (IWR) system too, but the proportion of users who prefer IWR is currently very small.

The driving force behind the usage of IVR for self-service is the number of telephone lines and mobile subscribers in the U.S. With more than 140 million cellular subscribers and more than 250 million residential and business access lines in the U.S, voice self-service has a strong growth base.

Call centers are often thought as cost centers that are essential to render customer service. However, self-service through IVR has the potential to change them from cost centers into profit centers. Research conducted by Purdue University's Centre for Customer Driven Quality shows that salaries account for approximately 60 percent of the costs in running a call center. Implementation of self-service through IVR would reduce the cost of hiring live agents and would ensure a faster ROI.

IVR technology is getting a big impetus in the form of advancements in speech technology. Vendors like Nuance and ScanSoft market software that aid in advanced speech recognition (ASR), text-to-speech conversion (TTS), and speaker verification (SV). Such software increases the value proposition of IVRs in a call center setting. Deployed through additional ASR, TTS, and SV ports in the IVR system, speech- enabled IVR applications offer a different experience for the callers.

The primary benefit of using speech technologies in conjunction with an IVR system will be increased customer satisfaction. More and more callers are being subjected to IVR applications with tiered menus that belt out "Press 1 for sales, Press 2 for customer service, Press 3 for operator." Such hierarchical menus test the patience of the callers often forcing them to opt for the transfer to a live agent. When callers opt for the transfer to a live agent at the onset of a call, the actual intent of investing in an IVR system is negated.

Speech-enabled IVR applications developed using VXML & SALT provide a flat menu structure. Here is an example of a sample interaction between a caller requesting account balance and an speech-enabled IVR application.

  • Caller calls the toll free number of the enterprise
  • The speech application greets him with the prompt "Good morning. Welcome to ACME systems customer service. Please state your request."
  • Caller says " Account Balance"
  • Application recognizes the caller request using ASR and prompts " Please provide your SSN & PIN Number"
  • Caller provides required information.
  • Application authenticates it using SV.
  • Application then provides account balance using TTS.

Hence, the speech-enabled IVR application makes it very easy for the caller to retrieve what he wants rather than forcing him to navigate through a maze of menus. Such speech-enabled IVR applications create a positive transactional experience for the caller and as such influence him to use the system again. On the business entity front, the enterprise profits from enduring a cost of $0.30-$1.00 for the caller-IVR speech-enabled application transaction as opposed to shelling out $3-$12 for a caller-live agent transaction. Call centers in enterprises can benefit a lot by investing in the migration from touch-tone IVR applications to speech-enabled IVR applications. The initial costs might tend to be on the higher side, but the ROI is faster in many cases with an average time period of 6-12 months depending upon the complexity of the speech application.

Call centers in contemporary organizations stand to gain much in the effective usage of IVR for their customer service operations, not just to reduce costs but also to increase customer satisfaction and customer retention. The stock market crash of three years back has emphasized the importance of retaining customers in tough economic times and the usage of IVR and self-service through IVR underlines that importance.

Author: S.V. Purushothaman, Industry Analyst, Frost & Sullivan