Operations and Management: Computer-Generated Service

For Miles Kimball, speech recognition technology worked best for handling callers requesting catalogs.

Voice recognition prompts can divert routine calls to a self-service computer system

If it’s good enough for the Army, it should be good enough for catalogers. The U.S. military has been using voice recognition technology for nearly 30 years, but catalogers are just now implementing it in their call centers.

Voice (or speech) recognition technology diverts calls for routine information requests and transactions — such as order status and catalog requests — from the phone queue to a computer-aided, self-service speech system. The diverted callers are greeted by an interactive voice response (IVR) menu that offers them a list of options, such as “press 1 to request a catalog.” The speech recognition system would then record and process the information. The technology enables customers to serve themselves without the aid of a customer service representative (CSR), freeing the CSRs to focus on taking orders and solving problems.

Most catalogers using speech recognition applications in the call center work with third-party providers, says speech recognition technology consultant Bruce Pollock. In other words, the calls are routed to a system maintained offsite, at the vendor’s facility.

“Speech recognition systems are complex,” says Pollock, who estimates that building a system would cost “several million dollars,” while maintenance costs could also be in the millions. Pollock believes it could be three to six years before an off-the-shelf system application appropriate for smaller catalogers will be available.

Oshkosh, WI-based general merchandise cataloger Miles Kimball first used speech recognition technology in 1998, when it outsourced with AT&T. Two years later the $132 million mailer switched to now-defunct vendor VOCI. (Miles Kimball is currently shopping for a new provider.)

According to Greg Schneider, the cataloger’s director of network and telecom systems, the technology was relatively straightforward. “The third-party provider connected to our host via a private-line frame relay to our network. The third-party’s server submitted requests to our host system via COM object, provided by our host software provider, Boca Raton, FL-based Ecometry,” says Schneider, explaining that COM object is a type of software which allows a server to communicate with Miles’ HP 3000 host system. “Phone calls were simply routed from our private branch exchange (PBX) to the third-party provider,” says Schneider.

When outsourced, voice recognition technology costs about $0.50-$0.75 per catalog-request call, compared to about $1.25 per call when handled by a CSR, Pollock says. A call about order status costs about $0.75 cents to handle via outsourced voice recognition, compared to about $1.50 when handled by a CSR.

Typically, catalogers can expect to pay either on a per transaction basis or a flat monthly fee based on the cataloger’s average number of transactions. Pollock recommends the monthly payment option which gives catalogers more predictability when budgeting for expenses.

Voice in the machine

Despite the apparent cost savings, some marketers shy away from using voice recognition for fear it may alienate customers. For instance, if you target an older audience, your customers might prefer to conduct business with a live person rather than a computer.

Or you might reserve the technology for the more passive functions, such as accepting catalog requests, rather than for more active functions such as checking order status. Miles Kimball used voice recognition primarily to route catalog request calls away from the queue, says director of call center operations Toni Cicero, “and we have had no negative feedback from our catalog requestors.”

On the other hand, Cicero says, most Miles Kimball customers who called to check order status preferred to speak to a live person, so many of the automated order status calls “were bounced back to our reps.” In fact, fewer than than 5% of the automated order-status calls were completed successfully.

Sports footwear and apparel cataloger Eastbay is considering the technology as an alternative to staffing during evening hours, says vice president of operations Dowe Tillema. The Wassau, WI-based mailer wants an automated system primarily to field the evening catalog request calls that typically come in from the West Coast — a two-hour time difference from Eastbay’s four Wisconsin call centers. “Finding available CSRs at 9:00 p.m. [local time] is often challenging,” Tillema says.

While speech recognition technology can provide cost and time savings in the call center, don’t expect automation to ever completely replace CSRs, says consultant Pollock. For ordering and customer service, many callers will always prefer to speak to a person. Says Pollack, “There will always be some situations where customers will want that human interaction.”

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