The ROI of speech analytics for the call center

Because speech analytics is new and relatively unknown both within the call center and across the enterprise, it can be perceived as a risky investment. But early adopters have found that speech analytics has a rapid three- to 12-month payback, high net present value (NPV) and high internal rate of return (IRR), according to Donna Fluss. In her latest column, read more about the benefits of speech analytics and how to build a business case for speech analytics technology.

Part of's Call Center Trend Watch guide


As the U.S. economy continues to weaken, enterprise management, and particularly chief financial officers (CFOs), will push harder to cut costs and increase productivity. As a result, call center managers will be required to reduce their operating expenses. Traditionally, that required call centers to reduce headcount and service levels; but there is a better way. Speech analytics is an emerging application that has demonstrated a measurable ability to reduce costs, increase revenue and improve service.


Based on the experience of early adopters, speech analytics has a rapid three- to 12-month payback, high net present value (NPV) and high internal rate of return (IRR), so it should be relatively easy to obtain corporate approval for a speech analytics initiative. However, because speech analytics is a new application that's relatively unknown both within the call center and across the enterprise, it is perceived as a risky investment. The CFO, or the person who approves technology projects, may prefer to hold off on deploying speech analytics until its benefits are more proven. You should make it clear that speech analytics can be a strategic differentiator and can deliver significant financial benefits.

Benefits of speech analytics

Speech analytics delivers a rapid ROI because it can help call centers achieve all four of their primary goals: to reduce operating expenses, provide an outstanding customer experience, increase revenue, and reduce customer attrition. Speech analytics can also provide benefits to other business units supported by the call center, including sales and marketing.

For call center managers, speech analytics provides valuable insight into customer behavior and can help identify the root cause of calls on a timely basis. Managers can work to reduce call volume, improve quality and reduce customer attrition. Speech analytics is also a valuable tool for making sure that agents meet regulatory requirements and adhere to scripts.


Sales organizations can use speech analytics to identify ways to increase sales conversion rates -- both for new customers and up-sell/cross-sell opportunities. Speech analytics can also be used to segment customers by sales channel. Customers often tell call center agents the most appropriate way to communicate with them and what types of products and services they prefer. A speech analytics application can capture this information and use it to improve sales conversion rates by interacting in the customer's channel of choice without burdening agents with additional information-gathering requirements. Customers are pleased when an enterprise cares enough to listen to their preferences; this helps build customer satisfaction and loyalty.

Speech analytics applications can help marketing organizations identify competitive challenges and opportunities on a timely basis. In many cases, marketing can create a campaign to respond appropriately. Speech analytics can be used to identify "at-risk" customers and successful retention methods and to gather customer insights about a company, its products and the competitive environment. It is also a great tool for understanding customer preferences and market trends, in order to generate new product ideas and enhancements.

From a public relations perspective, when a company does something that generates negative publicity, speech analytics functions as an early-warning system. It can often notify management before the issue has an impact on a large segment of the customer base or before it becomes a liability in the press.

For fraud departments, speech analytics can quickly pick up on new schemes and prevent major losses. It can also be used to identify individuals who are engaged in a fraudulent activity. For collections groups, speech analytics emotion detection can be used to measure stress levels and determine whether customers are telling the truth when they make a promise to pay. By rapidly identifying customers at risk of defaulting, an enterprise can intervene earlier and reduce its losses.

Using speech analytics, a call center can evaluate how satisfied customers are with policies and procedures, since managers can receive timely alerts on operational issues. By rapidly identifying call trends and their root causes, speech analytics can help identify performance issues throughout an enterprise. It's the only tool that can directly correlate complaint calls with the operating group that triggers them. For example, if a new billing policy or product fulfillment approach is generating a lot of inquiries, the appropriate department will be notified as quickly as possible.

Business case example

Building a business case for speech analytics is similar to building a case for any other call center investment, except that the potential benefits may come from incremental revenue as well as cost savings and improved customer service. In creating a revenue-driven business case, you might demonstrate the potential benefits of a speech recognition-enabled up-sell/cross-sell program. Assume that each agent in a 100-person call center could identify and close one additional up-sell or cross-sell opportunity in a week as a result of the speech-enabled program. Also assume that the average sale would have a value of $150 at a gross margin of 40%. The calculations would be:

100 agents x 1 sale/week x $150/sale x 40% gross margin = $6,000 incremental gross margin/week 

Cost of speech analytics application = $150,000

$150,000/$6,000 = 25-week payback period

Demonstrating a payback period of approximately six months is very persuasive for getting project approval. It's even more persuasive if you can find reference accounts that achieved at least your target performance from similar projects.

Customers benefit from speech analytics investments

Among the most important beneficiaries of speech analytics are enterprise customers. Today, much of what customers share with enterprises is ignored because agents do not have a system or process for formally gathering and communicating this data. Wrap-up systems are limited and generally invite agent feedback on certain pre-selected items. CRM applications capture transactions but generally do not reflect customer opinions. But speech analytics doesn't miss anything. Of course, its benefits are most valuable if the enterprise builds a formal process for putting speech analytics input to work.

Bottom line

Though a relatively new application, speech analytics has already proven its ability to contribute to call center and enterprise goals. During a recession, speech analytics becomes even more appealing because it can enable call center managers to maintain high service levels while meeting enterprise cost-reduction goals.

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