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IVR hang-ups a bad call for companies, customers

Contact centers are relying more on interactive voice response (IVR) to cut labor costs. But unless your system has ironed out the kinks, it may be doing more harm them good.

It's the sound that so many customers hate to hear on the other end of their telephone line and the one that so many corporate cost-cutters love -- that voice telling you to "say or press 'one,' 'two' or 'three.'"

Interactive voice response (IVR), software that accepts a combination of voice and touch-tone telephone input and provides pre-recorded responses, has been around for almost a decade. Yet many organizations still don't use it properly, according to one analyst.

While there are certainly some decent IVR designs, the nightmare of endless numbered menus stands out in consumers' minds, according to Penny Reynolds, senior partner with the Call Center School, a Nashville, Tenn.-based consultancy.

"A lot of companies view [IVR] as the silver bullet, a solution to all of their problems, but don't take the time to understand how it works, how it's designed and how it's scripted," Reynolds said. "There are some dreadful designs out there."

Call centers hoping to maximize the investment they've made in IVR need to take a long, hard look at how customers navigate through their system. Just because there are nine digits on the phone doesn't mean you need to use them all.

The good news is that cumbersome IVR systems are not difficult to fix, Reynolds said. It's just a matter of going through the system the way a customer would, eliminating old options and, where necessary, adding new ones.

Advancements in speech recognition technology have made IVR systems easier to use and more profitable, Reynolds said.

Her prescription for remedying an ailing IVR includes:

--Putting the most commonly used options up front and making them accessible.

--Deciding how easy it should be for customers to opt out of IVR.

--Creating separate phone lines that lead to live agents who can handle customer inquiries that are too complex for IVR.

--Determining whether IVR or a live agent should be the first point of customer contact.

When used right, IVR can really contain costs.

Adagio Teas, an online specialty tea store based in Clifton, N.J., has taken advantage of some of those advancements, replacing its call center with an IVR system.

Adagio has been running a voice recognition system from, McLean, Va., for the past nine months. It allows customers to receive information and order via phone without speaking with a live operator.

According to Michael Cramer, Adagio's marketing manager, it was impossible to profit from running a call center. Too many calls involved agents offering customers recommendations about teas that the time spent did not justify the average order of $30.

With its roots as an online store, Adagio wanted to offer customers another channel to order products after shutting its contact center. So it deployed an IVR system through which customers can request a catalogue and then order products by phone.

The system allows Adagio immediate insight into what people are ordering and in what quantities, similar to its online purchasing process, Cramer said. About one in four customers who go through the system wind up buying. While that figure would be much higher with an agent fielding calls, Cramer said, the labor costs outweigh the sales benefits.

"Many customers want to have the best price possible and the best service, and many fail to realize there's a difference between the two," Cramer said. "You can't be the most competitive with pricing and offer the best level of service. You're either a boutique with boutique pricing or you're an e-commerce retailer."

While Adagio still gets customers who complain, the more they use the IVR system, the more they accept the trade-offs.

"The great thing about this -- the ROI is immediate," Cramer said.

These days, businesses need to look long and hard at the benefits of offloading calls that take up an agent's time. With increasingly savvy consumers and do not call" and "do not e-mail" laws limiting marketing opportunities, call centers are increasingly up-selling and cross-selling to inbound callers.

"If you can offload 25% of your calls, that's a great thing," Reynolds said. "If, of those 25% of calls, one-fourth have a revenue possibility, then you've lost that capability."


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