According to the Gartner Group, overall telecommunications sales and service calls average about 3.5 minutes at about $4.57 per call. A plethora of technology is emerging to help providers reduce these costs. Concerto Software is one company that offers customer interaction management software for contact centers. “This is a very nascent time for this technology,” says Ralph Breslauer, executive vice president. “Everyone is looking at it. Everyone is thinking about it, but there is a low percentage [of providers] using it right now.”
SoundBite Communications, which develops interactive voice messaging applications, entered the telco market about six months ago and is finding interest at the senior management level. The traction these and several other companies have gotten in this space in the last three to six months is leading many to believe that call center efficiency is a top priority.
Why Dial the Digits?
Customers call the call center for a variety of reasons, the most common being billing concerns or questions (see “Why Customers Call the Call Center”). Brenda Boyd Raney, spokesperson at Verizon Wireless, confirms this.
Many typical billing questions can be answered directly on the printed statement. If created improperly, the bill can actually cause an upswing in customer calls, says Ron Whaley, OSG Billing Services vice president of sales and marketing. “If a bill is easy to read, it is going to decrease the calls to the call center,” he says.
He notes that the highest percentage of call center calls are generally from new customers who are trying to understand the bill and services for which they are paying. For this reason, OSG typically will print a section on providers’ bills for the first two months that defines the fields on the invoice and explains to new customers how to read the bill. OSG then encourages providers to define the terms on the bill again for its customers twice a year to head off any future questions. “If you educate the customer about the bill and what is on it, you get a lot fewer calls,” Whaley says.
Customers also call in when they cannot make heads or tails of the charges on the bill, such as specific taxes or surcharges. But often questions arise simply because of the layout of the bill. Whaley explains that one provider wanted to print the call detail records on the back of the first page of the bill to save paper and cut down on printing and mailing costs. After 60 days, the provider asked OSG to take the details off the back page because so many customers were calling in to say that some of their call detail information was missing. The provider had experienced a 28 percent increase in calls to its call center because customers were not used to looking on the back page of the bill for call detail information. “They did save a little on the printing side, but the increase in the cost of the call center far outweighed what they saved,” Whaley says.
According to Tom Erskine, vice president of product development and marketing at Boston Communications Group Inc. (BCGI), postpaid customers on average contact the call center once every two months, while prepaid customers call less frequently, about once every five months.
Low-cost Communications
Concerto’s Breslauer notes that people are the No. 1 cost for call centers. Training expenses and turnover add to these costs. And for some time now, many providers have turned to other channels to communicate with customers, such as e-mail, the Web, interactive voice response (IVR) systems, automated outbound calling and predictive dialing. Raney at Verizon Wireless explains that in many cases, customers need quick answers to their questions. “If they can get these answers online or through an IVR,” she says, “many customers are happy to avoid a call into the call center.”
Of the common questions at Verizon Wireless, prepay customers want to know the number of minutes left in their account or postpay customers want to know their account balance. Verizon Wireless allows its customers to type #MIN on their phone to automatically retrieve the minutes left and #BAL for balance information. Customers can also view their account information online. With such services, “the call center can deal with more involved questions,” Raney says.
More than 2.5 million customers have registered to use landline provider Verizon’s customer self-care Web site since its inception in October 2001. In a recent study by The Customer Respect Group, Verizon’s site was ranked first among eight telecom companies.
Steve Borelli, executive director of product management at CSG Systems, says that in CSG’s work with broadband companies, he has seen the company’s online self-care technology lower inquiries into a call center by 10 percent.
One problem, however, with electronic communications is that “everyone has treated e-mail as an asynchronous communication,” Breslauer says. “That can be okay if you send the right expectation.” That is, a provider needs to let subscribers know when to expect an answer to the questions they pose online. Concerto encourages its customers to send an auto reply to received e-mails telling the subscriber when to expect a response. Still, in many cases, subscribers are not likely to wait a few hours, much less up to 24 hours, to have simple questions answered.
Cutting Out the Middle Man
One tried and true way to expedite customer calls is with IVR software applications. “As much as you hear people complain about talking to a machine, it’s becoming more and more effective,” says Daniel Kenyon, vice president of communications strategy at PeopleSoft.
IVRs are typically used to give information to a customer, route calls or support self-service. The business case for using them is to displace calls from a live agent. “The savings can be very significant, easily in the millions,” says Bern Elliot, research director at Gartner Group. “The business case for IVR is compelling.” He says that, on average, providers can offload about 25 percent of their calls to an agent through use of an IVR. He says he has even seen some offload up to 40 percent.
IVRs can also serve to provide personalized service. For example, when an IVR asks a customer to enter account information, this can be fed to a live agent’s screen, so the customer does not have to repeat the information.
Adding speech recognition capabilities to these automated interactions is another way to decrease call center costs. If such technology is used in conjunction with a knowledge base, answers to customers’ e-mailed or spoken questions can be automatically delivered without requiring a CSR’s intervention. This technology even can be used to route calls to the appropriate CSR.
Likewise, most providers currently use qualified routing to send calls to the most appropriate CSR. “Calls that do go through are better directed,” Elliot says, so the customer is getting to the right place. If someone calls in and says their service is not working, for example, there is no point in routing the caller to a service call if the provider should route the call to collections to fix the problem.
Automating Outbound Messages
Providers also route calls that are prompted by specific marketing campaigns. These often result from outbound calls or automated messages that originate on the provider’s behalf. Tom Gregory, vice president of marketing and sales at SoundBite Communications, points to the cost inherent in pushing these calls out through a live agent, which he lists at $20 to $28 per hour for a live call agent fully loaded, versus the 10 to 36 cents per call to push out an automated message. He notes that SoundBite can handle upwards of 150,000 calls per hour, or more than 2 million voice messages per day. Many providers are trying to decrease live outbound calls and have CSRs handle only inbound calls live.
Gregory relates one instance in which an online wine cellar employed SoundBite to send out messages to customers to announce a special discount. The message was sent to customers who had previously been profiled to determine their wine preference—red or white—and the messages sent were targeted accordingly, to market a deal to customers based on their preference. Two percent of the customers who received the message chose to connect to a CSR to learn more about the special promotion. Of the 2 percent, 90 percent chose to buy the wine. Customers who are actually routed to a live agent based on a marketing pitch tend to be more qualified, interested customers.
But outbound messages are not solely used for marketing pitches. Proactive messages can also be sent out to alert customers about service outages or problems, to keep customers informed of their account status, or to address a collections or payment issue, such as a credit card used for recurring payments that is about to expire.
Gregory says that when it comes to soft collections, people tend to be more responsive to IVRs and outbound messages. The sweet spot for SoundBite is in collections from customers whose payments are 90 to 120 days late. Often, Gregory points out, “a gentle reminder call can get them to pay their bill.”
BCGI’s Erskine says using outbound messages proactively involves taking the technology lessons learned in prepay and applying them to postpay customers. That means warning postpay customers that their service is going to be shut off if they do not pay up. The goal, however, is to lower the cost per contact to retrieve the payment.
Gregory says that between 35 and 40 percent of the customers who receive a SoundBite message choose to be connected to a live CSR. The pay-up rate for those who do connect is upwards of 50 percent. “We are collecting the money faster than they [call centers] can do otherwise,” he says.
While voice calls through a live agent are still the primary cost of call centers, other channels hold the promise of allowing CSRs to handle a greater volume of customers’ inquiries in less time. Still, while communication vehicles like e-mail and the Web are inexpensive, they are still not widely used. Breslauer believes that over time, more people will turn toward using e-mail and chat functions to communicate with their providers. “I’m not a proponent of moving completely away from voice,” Breslauer says. BCGI’s Erskine adds, “I can tell you right now, you can’t handle 100 percent of the transactions in an automated way.”
Real-time Provisioning
One key problem that subscribers face in dealing with providers is the aspect of real-time service provisioning. Customers who have had their service suspended pending payment want to know that when they make a payment, service will be reprovisioned immediately.
Concerto’s Breslauer says this is a problem when systems such as the Web self-care functionality do not integrate in real time with the provisioning systems to switch service on again.
“There’s no reason why any subscriber should have to wait 24 hours to have their phone turned on,” BCGI’s Erskine says. “There’s no reason why this should have to go through a legacy provisioning process.” He notes that it is not that expensive for a provider to apply a payment to an account and reactivate service. “The whole point here is you just don’t want the customer to talk to a live agent,” he says, “because every time you do, it’s five bucks out of the carrier’s pocket.”
Melding Customer Info
Systems integration is critical to preserving customer satisfaction and reducing call center volumes and billing disputes. Especially in the areas where customer relationship management and customer interaction meet, providers need to bolster their efforts to integrate disparate silos of customer information.
Wendy Close, Gartner CRM research director, says that fewer than 10 percent of all enterprises have a single, integrated view of the customer. Impediments to integrating all the involved systems go beyond technology complexities to corporate politics, because this information crosses all divisions—sales, service and marketing. Close says that in the past, companies have spent between $90 million and $120 million on a CRM project trying to reach across the enterprise, only to have the projects become “unruly.”
Tough Choices on Customer Profitability
Customer profitability is measured by the relationship between costs and revenue. This measure involves all the component costs, such as cost of goods sold (network cost), cost of support and the cost of any subsidies or discounts used to sell the service to the customer. Customer value is a measure of the length of time or customer life cycle with the provider, as well as the volume of services the customer might consume.
These scores could be used when making decisions about how to deal with high-maintenance customers, or to determine how much time to spend with a particular customer on a call. They can also determine when to encourage the customer to visit the Web site to handle a request or answer a question, or to push a customer to an automated IVR.
Carriers are asking for the capability to measure profitability and value with the aim of reducing costs and offloading high-maintenance customers, PeopleSoft’s Kenyon says.
But what happens if a system deems a customer not profitable? Some argue that this might spur churn. “There could be no greater mistake than to think a customer is not profitable when in fact they are,” Kenyon says.
Many customers would be upset if they were sent to an IVR because they were deemed unprofitable, especially if customers sense that what they spend with a provider each month should deem them profitable. The key to minimizing the risk of these wrong decisions is to adopt low-risk strategies if a customer’s profitability score falls in a gray area.
“You’re doing it [measuring profitability] with the realization that you might lose the customer,” says Concerto’s Breslauer, but you do it because it makes business sense for the bottom line.
“A certain percentage of customers should be let to churn,” says PeopleSoft’s Kenyon. “The ability to let them churn may be the best result.” He points to one major wireless provider that churned a big number of its customers because they were not paying the bills. Kenyon says that many companies overseas successfully move their bottom-end customers in postpay over to prepay to manage costs.
PeopleSoft will be releasing a customer profitability management feature in its product by mid-year. But the jury is still out as to whether providers will wholeheartedly accept technology that allows them to measure customer profitability and value and handle customers according to the resulting scores. “There’s a lot of talk about this, but I’ve not seen a lot of this put in practice,” Kenyon admits. He suspects the reason might be that these systems are relatively new and so highly sophisticated.
Raney says Verizon Wireless has looked at technology that ranks customers based on profitability and value. She says the company continues to consider it for sending customers off to a gold or silver CSR, but right now it is opting to treat all of its customers the same.
“The reality of the implementations we’ll see initially is they will be much simpler,” says Erskine at BCGI. Although providers are still assessing this technology from afar, Breslauer believes it will be more pervasive in the future.
To date providers overseas have been more creative in reducing call center volumes, especially in the wireless arena, and mainly due to stiff competition. But U.S. providers are considering innovative technologies to reduce their costs, Kenyon says.
“I think we’re right at the beginning of what we’re going to see,” Erskine says. He predicts that in the next 6 to 12 months, the industry will likely see much more innovation on the postpay and hybrid side to manage customers and keep them informed about and self-managing their accounts.
| Why Customers Call the Call Center According to industry experts, these are the most common reasons for customers to heat up call center lines: • To address a billing concern, ask a question about an invoice or because they cannot read the bill • To ask a question about taxes and fees on the bill • To inquire about new products or services • To ask a payment question, authorize a payment or ask if a payment was received • To report a service problem • To ask why service has been cut off • To check the status of an order • To ask when a contract is up (wireless). |
