Put your Call-Center on Voice-Drive (Part 2)

Overview

There is no denying that speech recognition can reduce the costs of running your call center. In many cases, these cost savings can be huge. Speech recognition makes your call center more efficient – allowing you to accomplish more with fewer people. Your callers are handled in a fast, friendly, and professional manner at a fraction of the cost.

You manage a top-notch call center with P&L responsibility for the entire operation.
Your company is counting on you to provide world-class customer service. Yet, with today’s competitive landscape, your challenge is to provide excellent service on a tight budget. In fact, call center budgets overall are shrinking even as customer expectations and call volumes are rising.

You do not need to be reminded that these are challenging times for call center managers. Customers continue to demand greater access and ease of doing business. Your middle managers believe that the solution to rising demand is to throw more live bodies behind the ACD (Automatic Call Distribution). But before you sign off on those job requisitions, consider the compelling economic benefits of a speech-enabled technology solution.

This document has been prepared to help you understand and evaluate the costs and benefits of implementing a speech recognition solution in your call center. You will see that the numbers speak for themselves. In the end, live agents are very expensive, whereas a speech solution is a cost-effective way to augment your existing call center infrastructure. The paper first presents the business case by looking at the system cost versus human agent costs. The paper then discusses the evolving expectations that customers have for self-service access to information.

Live Agents are Expensive
There will always be a need for live agents to handle complex situations such as customer complaints or exceptions to normal procedures. But, let’s face it – agents are expensive. It is far better to offload routine requests for information or simple transactions and allow your agents to concentrate on higher value.

When looking at labor costs, there is a lot more to consider than just the employee’s annual salary. Take a look at the real cost of an agent being paid N2, 000, 000 per year.

First, there’s corporate overhead that includes facilities, equipment and software, and supervision and support staff. Estimates for computer and network equipment alone are often over N675, 000 per seat. A 40% overhead equals an additional N1, 070, 000.
Second, there’s employee payroll tax and benefits. A conservative 20% equals another N535, 000. Third, there’s employee training. Assuming new employee training costs about N750, 000 and that agent’s turn over every three years, we have to add another N150, 000 to the equation. So what began as a N2, 000, 000 cost has doubled to N5, 180, 000 per agent? Even worse, this figure is not constant – rising every year with wage inflation. Figure 1 shows the actual company costs for an agent being paid N2, 000, 000 per year.

Agent Productivity

So what are you getting for that N5, 180, 000? A live agent can handle about 28,350 calls per year. Multiplying the number of calls an agent can handle in an hour by the total hours an agent works in a year gives us this total call volume. Thus, as shown in Table 1, the average cost per agent call is N183.



1ASSUME THE AVERAGE CALL-LENGTH IS 3 MINUTES. AN AGENT AT 90% PRODUCTIVITY CAN HANDLE 18 CALLS PER HOUR. WHEN NOT AT LUNCH OR ON BREAK, ASSUME AGENTS ARE AT THEIR DESKS, READY TO TAKE CALLS, FOR 7 HOURS PER DAY. AFTER ACCOUNTING FOR VACATION, HOLIDAY, AND SICK DAYS THERE ARE 225 WORKDAYS IN A GIVEN YEAR. 28,350 CALLS = 18 CALLS/HR X 7 HRS/DAY X 225 DAYS/YR.

Obviously, the average cost per agent-handled call will vary from call center to call center depending on wage structure and call durations. This analysis has used rather conservative estimates. Several customers report much higher cost per call averages. We have seen N300, N500, and even N1000 per call in situations where wages are higher than N2, 000, 000 and average call length is higher than 3 minutes.
Speech Solution Productivity

So, in terms of call handling, what are you getting from your speech-enabled IVR? To answer this question, and compare it to agent handling, we need to translate our system capacity down into a per call cost.
A 144-port IVR can handle a whopping 24.3 million calls per year. This breaks down into 168,000 calls per port. The cost per port per year is found by dividing the cost of the solution by the number of ports in this case being N132, 470, 000 divided by 144 ports giving us N920, 000 per port.

Therefore, a single port costs N920, 000 per year and can handle 168, 000 calls. The average cost for a speech-handled call is N7, which is more than 18 times less expensive than an agent handled call.

A single IVR port can handle more calls per year than an agent can and for a fraction (1/18th) of the cost.

Other benefits of Speech Systems

In addition to saving money, speech systems can provide better customer service and more secure transactions.

Improved Customer Service

Speech recognition dramatically reduces on-hold time and eliminates confusing touch-tone menus. It also makes delivering 24x7 services cost-effective and ensures callers receive consistent, dependable, and friendly assistance. As compared to the Web, self-service is available from any phone by using the most natural form of communication – speech. A consumer does not need to know how to use a computer or wait to boot up their PC and log on.
For all of these reasons, consumers have reacted very favorably to speech recognition. In February of 1999, Speech vendors completed a comprehensive study of speech-system users. This study found that 83% preferred speech systems to touchtone, and the overall satisfaction rating with these systems exceeded 83%. Many respondents also preferred speech systems to agents and/or operators because of the consistent service level this medium provides.
Northwest Airlines deployed a reservations system based on Nuance software and conducted extensive market research to find similar, very positive, results. Most notably, over 66% of respondents rated the Voice-based system as better than the Web-based alternative!
V-Commerce: Voice-driven E-Commerce

Many companies are setting up systems to enable their customers to obtain self-service and purchase products over the Web. Yet these companies are finding that the Web alone cannot address all their customers’ needs. By adding a voice interface to their Web applications, companies can provide voice access to the more than one billion telephone users around the world, in addition to the 150 million users with PCs connected to the Internet. These V-Commerce™ (voice-driven e-commerce) systems enable companies to use the same application servers, business rules, and databases to serve both phone and Web users, thus dramatically extending their value.
To make deploying V-Commerce solutions fast, easy, and cost effective, Nuance founded an organization called the V-Commerce Alliance. The group consists of more than 30 companies from the e-commerce, IVR/telephony, and networking industries that are working together on standards in these areas as well as powerful product offerings. Members include BroadVision, Motorola, VISA, and many others.

Secure and Convenient Transactions with Voice Authentication

Speech Verifier enables a user to be identified via speech recognition and authenticated simultaneously by checking the user’s voice against a previously enrolled voiceprint. Speech Verifier provides a level of security that is not available through other means and can save tremendous amounts of money by reducing fraud.

Moreover, it eliminates the need for passwords and PINs. No longer does a consumer need to remember many different passwords to access each account!
Because a user does not need to speak a password, it also shortens the overall call duration. This means fewer telephony ports and reduced total system hardware cost.

Putting Your Customer Care on Voice-Drive (Part 1)

A BRIEF HISTORY OF CUSTOMER SERVICE

“PLEASE CONTINUE TO HOLD, YOUR CALL IS IMPORTANT TO US.....”
Originally, call centers were agent-based. Customers would call a toll-free number and wait – and sometimes wait even more – while listening to monotonous, on-hold Mozart and repeated assurances that "your call is important to us."
Finally, the customer reaches an agent – only to make a simple inquiry.
These agent centric call centers required both major capital investments and significant labor expenses. As these costs continued to grow, many businesses explored and invested in new technologies for 24x7 self-service options.

"FOR CUSTOMER SERVICE, PRESS 4…”
Complementing agent-based call centers, early efforts in automation and self-service focused on Interactive Voice Response (IVR) – using nested menus of touch-tone codes to let customers interact directly with enterprise computer systems. With a majority of call center calls routine and repetitive in nature, companies realized that it would be effective to automate those interactions by taking advantage of the "new" touch-tone keypad and advances in computer telephony integration (CTI). Right? Only partially so. Unfortunately, except for basic applications, touch-tone systems have had a low degree of customer acceptance – typically processing less than 20% of inbound calls. Too often, callers quickly learned to "zero-out" and hold for an agent. The result: staffing and training costs remain high while agents continue to field routine requests. Telecom costs are also higher than necessary, as companies "foot the bill" for callers who prefer to wait on hold, rather than navigate through a cumbersome maze of single-step requests. And more importantly, many callers remain frustrated with the call center experience.


WWW.COM ERA
In recent years, the World Wide Web has opened up opportunities for automated self-service and "e-business" and many consumers are willingly going online to trade stocks, book flights, check weather and more. The Web lets companies deliver information and transaction services to customers like never before, and is forever changing people’s perceptions about "self-service" anytime, anywhere. However, with the explosion in wireless, the telephone still is the most ubiquitous device. That’s why innovative customer service leaders are looking to complement their Web initiatives (the data, the applications, the interfaces, the branding) with telephone services that callers can conveniently use – time and time again.

ENTER SPEECH

Sensitive to the needs of customers and their growing self-service expectations — and seeking to streamline call centers to reduce costs — companies have turned to speech recognition to power their telephone based services. The first, large-scale, natural language speech systems were deployed in 1997. Since then, companies such as E*TRADE, United Airlines, FedEx and BellSouth have been delighting their customers with speech. What are the benefits these companies – and others like them – have achieved? Here’s an overview.

LOWER COSTS
While touch-tone typically handles 20% or fewer of all calls, speech — with its natural and engaging interface — typically handles more. In fact, one online brokerage firm increased automation from 10-20% with touch-tone to over 70% with speech.
This increase in automation significantly reduces staffing and training costs. In addition, by intercepting routine calls to live agents, speech lets agents tackle complex calls or higher-value sales transactions that require their skilled intervention.
It also means lower "on hold" expenses from the callers waiting for agents. What’s more, in many instances, speech-handled calls can be significantly faster than agent-handled calls, which also reduce telecom network charges.

INCREASED REVENUE
The power and flexibility of speech opens up numerous avenues for generating incremental revenue. You can begin to process "e-commerce" and "m-commerce" orders from customers who may not have computer access or are away from their PCs. That’s because speech can extend your website to create a speech-enabled e-commerce system. Now, cell phone callers can bypass touch-tone codes or tiny WAP screens and cursors to place stock trades or reserve a hotel room just by speaking naturally.

INCREASED CUSTOMER SATISFACTION
No interface is more natural than speech. Users agree: it’s far more pleasant to say "I’d like to buy 100 shares of Acme Corporation at the market price tomorrow" than to punch in the trading symbol, number of shares and trading day.
With speech, customers get the right answers quickly any time of day – and that increases satisfaction and loyalty. The power of speech means that customers "hang up with a smile."

COMPETITIVE DIFFERENTIATION
With speech, a company can distinguish itself from the competition and, more importantly, keep its customers coming back again and again. That’s because in many industries, touch-tone systems are still the norm. Being an early adopter of speech, a company can demonstrate leadership in its commitment to customer satisfaction and innovation.
SPEECH LOWERS COST
REDUCING AGENT-RELATED EXPENSES
Let’s take a closer look at how speech recognition can help reduce costs. The average agent-handled call costs anywhere from $1.50 to $15.00, while speech-handled calls can cost as little as $0.10 to $0.35 per call. Because speech systems are easy (and fun) to use, customers do "self-serve" their routine requests and transactions. The result:
• lower abandonment rates
• increased use of automation
• shorter hold times
• lower agent-related expenses
• bottom-line savings
Speech reduces the expenses of staffing and training a professional call center.
Agent costs – salary, benefits, equipment and overhead – represent more than 56% of the typical call center’s budget. What’s more, turnover among "burned out" call center agents averages more than 25% annually in most industries.
By contrast, speech offloads routine calls from the agent’s queue. Or, if the speech system can’t completely solve the caller’s issue, it can classify the call or collect necessary information before passing the call to the agent. That means agents focus on complex queries, increasing their job satisfaction. That, in turn, reduces attrition levels and their associated hiring and training costs. With fewer calls reaching agents, call centers can accommodate future growth in call volumes with existing staff levels.

CASE IN POINT
One leading financial services firm ran up against the limits of touch-tone systems for providing account holders access to their 401(k) accounts. Caller satisfaction was low and call-abandonment was high. After deploying speech, the company was able to process numerous transactions – without agent intervention. Abandonment rates dropped 66%. And costs per call were reduced from $4 per agent-assisted call to less than $0.40 per call with speech — a 90% savings.

REDUCE NETWORK CHARGES
By cutting – or eliminating – hold time, menu navigation time, and the time spent prompting the caller through different menus; speech can dramatically reduce call length and associated telecom charges. A recent Frost & Sullivan study notes that toll-call charges dropped on average 15% to 50% with speech recognition. What’s more, when callers opt for speech, the hold times for callers waiting for agents decreases as well, further reducing toll charges.

CASE IN POINT
By providing automated access to funds and accounts – without forcing callers to wade through lengthy touch-tone menus or wait on-hold for an agent – a leading financial services firm reduced its average call time from 12 minutes to two. Another company, an airline, used speech to reduce hold times from 20 minutes to immediate service for customers calling in.


SPEECH GENERATES REVENUE

Beyond cost reductions, speech also offers excellent opportunities for making money for your organization. Consider the market penetration of the telephone. Today, the phone is the most widely adopted communications device anywhere in the world. Cell phone subscriptions are increasing faster than Internet connection rates, and exceeded more than 1 billion by 2003, according to IDC.
Given the ubiquity of telephone access and the market’s clear preference to communicate by phone, speech is the natural interface for a variety of telephone- initiated transactions: stock trading, e-commerce, travel reservations, order placements and tracking, and much more.
Speech enables new marketing and sales avenues for cross-selling, up-selling and affiliate selling. For example, a speech service can include builtin context-sensitive advertisements to inform customers about a related offering and let them make purchases automatically. "Would you like to learn about our First Class upgrades?" the automated speech system inquires after a caller receives flight and fare information.
Speech recognition also allows enterprise customers to add informational services that complement the primary application, and obtain revenue dollars for doing so. For example, a stock trading application might include a news update; a travel application, a weather report. Advances in low-cost text-to- speech solutions are making it increasingly cost-effective to deliver services with content that is personalized (like email or driving directions) and constantly changing.

CASE IN POINT
Aiming to reduce call center costs, one of the world’s leading office-supply retailers launched a speech-activated system and experienced an additional benefit: more revenue. Not only do the automated calls cost the company 88% less than agent-handled calls, the speech orders also average a greater number of items and a higher total value than sales calls handled by live agents.

SPEECH INCREASES CUSTOMER SATISFACTION AND LOYALTY

Customer expectations for service continue to rise. The self-service model of the Web has fueled this dynamic as more customers seek "after-hours" access to information and services. Perhaps the best measure of customer dissatisfaction can be found in the fact that as many as 30% of callers immediately disconnect when they encounter a touch-tone system. Quite simply, touch-tone doesn’t meet their expectations for customer service.
By contrast, callers continually express a preference for speech-recognition systems as demonstrated by fewer "zero-outs" or disconnects. In fact, a recent Frost & Sullivan study noted that 50-60% of callers who skip complex touch-tone systems are comfortable using speech recognition for the same application.
Additionally, new research indicates that many callers are choosing to interact with speech, instead of a live agent. They’re buying more products and getting more information – in less time and at less cost.




CASE IN POINT
Millions of people are enjoying instant information from the Internet and now want it “on the go.” A leading portal company has responded by providing speech-enabled phone access to its members, enabling them to retrieve e-mail, review headline news, get national or international weather, even shop – all by simply speaking naturally into any phone. Customers are delighted: the service successfully handled more than 100,000 calls within the first four days of launch, and now serves more than one million calls a month.

SPEECH CREATES COMPETITIVE ADVANTAGE

Whether it interfaces to standard enterprise systems or to a company’s e-commerce/Web infrastructure, speech can provide substantial differentiation for your company in the eyes (and ears!) of customers. Your speech service is the voice of your company and it carries a strong brand identity. By being the first to market with speech in a particular industry or market segment, a company can create a "wow" factor that captures customers and provides a durable barrier to erosion and churn. In 1997, one brokerage chose to do just that. After deploying the first speech service of its kind, this leading online brokerage saw an increase in the number of customers and the volume of orders. The company enjoys heightened customer satisfaction and the image of technological leader-ship in the brokerage industry. Speech provides another unique advantage: personality! When you select a certain voice talent and style of dialogue with users, your company can project an image that is right for you. Fun-loving, trustworthy, helpful – these are all qualities your speech service can deliver consistently to your callers.
Caller experience and economic results go hand in hand. When you work with a speech vendor who can help you provide an effective caller experience, you will not only reap benefits of competitive advantage and caller satisfaction, but – because callers will readily use your automated system — the economic results will follow, as well.

NEXT STEPS

Now that you understand the far-reaching return of speech and its impact on your business case, let’s briefly look at some investment considerations.
• Many speech applications leverage existing investments in corporate websites/e-commerce system and call center technologies.
• There are many different speech investment strategies to explore. Evaluate "in-house" systems, outsourcing, hosted models or transactions-based fee structures.
• Identify multiple potential application areas within your company in order to amortize costs over time or distribute costs over various departments

Alternate source of revenue for State Government

Most State governments in Nigeria today need to deliver democratic dividends such as infrastructure, quality education, healthcare and other social services to their citizens, however, ground reality is that revenue sources do not match the challenges on ground as state governments battles with dwindling monthly allocation from the federation account, coupled with low or non-existing tax revenue generated internally and scarcity of alternative sources of revenue.
However, to meet the aspirations of the people of their states, Governors through different forums are creatively devising avenues to increase internally generated revenue and reduce their state’s reliance on federal allocation. This dire situation has made most states resort to different financial engineering e.g. bond market and tax reforms to generate the much-needed revenue to fund infrastructure and welfare projects, etc. but despite all these, revenue generated still falls short of what is required to transform most states in Nigeria into a modern state and to meet the millennium development goals.
The question bothering most state chief executive is “do we increase the tax burden on our citizen to fund our projects, resort to borrowing, curtail spending and do what we can with the little resources that we have or creatively devise other means of generating revenue ”. These questions are yet to be answered!.
State Welfare Lottery – A Guaranteed & fun-way of Revenue Generation for Infrastructure & Social Development.
A state welfare lottery is a state sponsored organization that manages lottery and lots draw games of chance in which people buy tickets and prizes are given to those whose numbers.
The purpose of a state welfare lottery is to raise fund for social welfare programs such as education, environment, healthcare, infrastructures etc.
Most federal, state and local jurisdictions worldwide are creating their own national and state lotteries to increase internally generated revenue, and lottery revenues are becoming a leading funder of social development and welfare programs, and helping all federal and states government in US and Europe to plug holes in their budget deficits.
State Governments in Nigeria should also setup welfare lotteries primarily as a means of generating non-tax revenues. Moreover lottery revenues are often a means by which to generate revenues without raising taxes and are frequently set-aside for particular public purposes, such as education, aid to the elderly, conservation, transportation and economic development.

Some Key Facts About Welfare Lotteries Worldwide.
• Federal, State and local governmental authorities and their licensees in approximately 200 jurisdictions worldwide operate lotteries.

• Worldwide lottery ticket sales in fiscal year 2008 were approximately over $200 billion.

• In fiscal year 2004, lottery sales in the United States were approximately over $50 billion.

• UK national Lottery has spent over $36 billion on welfare related project from 1998 – to-date.

• Sri-Lanka is planning to build an airport from lottery revenue.

• Many states in the United States are currently relying on lottery revenue to fund key social welfare projects and plug budget deficits, with each state generating average revenue of $4 billion from its welfare lottery.

• Georgia Lottery in 11 years has total sales of $21 billion and transferred more than $7.8 billion to the state’s education fund.

• In fiscal year 2009, China Welfare Lottery sales were over $10 billion and it’s expected to grow at 31% annually.

• Over $20 billion has been spent so far for social and charitable causes by the Chinese welfare lottery, financing over 150,000 social welfare projects that have benefited millions of people.

• The Georgia Lottery was able to realize its one-year sales projection in five months and paid its start up line of credit within two weeks.


How will a Welfare Lottery Benefit Your State?
The main reason for a State Welfare Lottery worldwide is to increase the states internally generated revenue without increasing the tax burden on the citizenry, and in most jurisdiction worldwide about forty percent of lottery revenue is spent on “good causes” that impacts the citizenry directly, the following are the example of “good causes” that has benefited from lottery revenue:
• Education (grants to public schools, scholarships to indigent students, research, public libraries etc.).
• Infrastructure (Roads and public transportations).
• Health Care (Primary health institutions, medical supplies, drugs etc.).
• Charities (Orphanages, Old people’s home etc.).
• Recreation, parks and conservation.
• Emergency funds (disaster funds).

Furthermore, a state welfare lottery will provide the following social, economic and financial benefits to your state:
• Estimated revenue of between NGN5 – NGN10 billion within 1 year.
• Estimate of between NGN3 – NGN7 billion to be raised for good causes and social welfare programs within 1 year per state.
• Creation of an average of 5000 new jobs in your state, helping to reduce the state’s unemployment rate.
• Increase in state per capital consumption, hence contributing to state’s economic growth.
• Lottery revenue can greatly help increase the states standard of living.
• The welfare lottery can become a unifying factor for the citizenry just like football.
• Creates confidence and credibility in government due to frequent and continuous payouts.
• Serves as indirect form of taxation, without an additional tax burden on the citizenry.