Misnavigation is a hidden cost in nearly every call center

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What is misnavigation?

The central function of an IVR system is to connect the caller to the right agent type (e.g. billing vs. sales) or to divert the caller to a self-serve system.  The navigation stage of the call succeeds if the caller connects to the right agent for his issue. It fails if the caller misunderstands the instructions, or loses patience and “zeros out”. This “misnavigation rate” is a metric closely watched by managers of call centers and can be surprisingly high. Based on conversations with various companies, rates are typically around 30% and can go as high as 50%.

The cost

You can calculate how much misnavigation is adding to the cost of your call center. You need to get: 1) Your misnavigation rate, 2) Average time it takes for an agent to handle an internal transfer 3) Average cost of agent time. This figure will then help you put it all together:

The impact of misnavigation

Getting multi-channel right is tough, but it pays off

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One of the big trends in the world of the call center / contact center, is the growing complexity of the communication channels that have to be managed. Web, voice and email have been joined by chat, Twitter, Facebook and more.

The upside

The good news is that multi-channel customers bring more profit. At least according to Elaine Cascio, VP of consulting firm at Vanguard Communications. She writes on TMC: “The challenge is that providing a great customer experience is getting harder and harder. We’re faced with more and more channels for customer contact and have less and less control over the experience. Study after study shows that multichannel customers are considerably more profitable than single channel customers. So not only is a customer experience strategy good for building customer loyalty, it’s good for your bottom line.” Read the full entry here.

The downside

Cascio doesn’t provide any hard evidence to back up this claim, but we hope that future studies will provide confirmation. What we do know is that the cost of getting the strategy wrong is growing.

The AmEx study from July 2010 illustrates why. After asking a random sample of 1000 people (18 or older), they found that:

  • 81% have decided never to do business with a company again because of poor customer service in the past.
  • 50% reported it takes only two poor service experiences before they stop doing business with a company.

We wrote about that study here.

AmEx study confirms what we all already know: It pays to treat your customers well

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American Express released a terrific study last week called the Global Customer Service Barometer.

The goal was “exploring attitudes and preferences toward customer service” in the US and 11 other countries and their results, while not surprising, are still comforting to see for those of us adamant about improving the call center experience.

The results that grabbed headlines were “Americans Will Spend 9% More With Companies That Provide Excellent Service.” (It’s 7% for Canadians, if you were wondering.)

The impact of social media

My favorite part was about the impact of social media:

Nearly half of consumers report always or often using an online posting or blog to get others’ opinions about a company’s customer service reputation. But when consumers go online they’re looking for “watch outs,” saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57% and 48%, respectively).

The tendency to weigh negative stories more than positive ones is a well-known effect in psychology. It’s neat to see it quantified in this study.

Swift punishment

It appears from the study that American’s are swift with their punishment for bad service: “81% have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50%) reported it takes two poor service experiences before they stop doing business with a company.”

Majority of online retailers already have or are developing a mobile strategy

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In Canada, estimates say that 30% of all wireless users will be on smartphones by the end of the 2010 and 50% by the start of 2014

– Convergence Consulting Inc. as reported in “We’re flocking to smart phones”,
Iain Marlow, January 12, 2010, The Globe and Mail

As smart phones continue to become more common, companies that value customer service are embracing the platform by releasing dedicated mobile applications.

For the banks it’s a must-have

See my recent post “Third Canadian bank in 2 months releases an iPhone app“. Four large banks have released iPhone apps in the last few months. CIBC was first in early February followed — a week later — by BMO. TD followed in mid April. ING Canada released theirs in March. Who’s missing? Of the five “majors” only Scotiabank and RBC. And they are certainly working rapidly to release before the end of the year.

Retailers are adopting the mobile platform

Forrester Research and Shop.org release a study last week on this phenomenon. It states that nearly three-quarters of online retailers either already have or are developing a mobile strategy. The average investment is $170,000 but large retailers are spending several times that.  (“The State of Retailing Online: Marketing, Social Commerce and Mobile Report” is available to Shop.org members and can also be purchased directly at www.shop.org/soro.)

The future of the call center is a visual interface

At Fonolo, we believe the rise of the smartphone is a driving force for the next generation of the call center experience. And we believe that experience will center around a visual interface. To understand why, consider the context of the customer when he calls in the call center. For the last decade a growing fraction of callers have been in front of a web browser (often, the company’s site) when placing a call. (In a recent conversation with a large bank’s retail group, we learned that 30% of their callers are on the website when they place the call.)

Fonolo makes it easy

Now combine that with the growing number of callers that are on a smartphone. The sum of those two will soon be, if not already, a majority of callers. And what’s special about those two contexts? In both cases, the caller has an interactive visual interface at his disposal. An interface that, if used properly, can vastly improve the calling experience while reducing the cost for the company. Our job at Fonolo is to make that possible and, more importantly, easy for any company to do.

Fonolo iPhone widget

Speech-recognition is not making phone menus any better

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The use of speech recognition in phone menus is one of those advances in technology that sounds great in theory, but doesn’t live up to the promise in the real world. (Maybe it’s because it works so well in the movies!)

There are certainly use cases where  speech recognition is the absolute best approach. Directory assistance is a great example. But, sadly, a far more common implementation involves replacing “press 1 for billing” with “for billing say ‘billing’.” This kind of borderline-comical situation is what leads to so much user dissatisfaction with the technology.

Blogger Blake Landau summed up nicely in a recent post on the CustomerManagementIQ blog:

It’s not a rare day that I hear someone walking in the street on the phone with customer service… screaming into their phone: ‘AGENT, AGENT,AGENT!’ Fortunately the recipient of this anger is not getting their feelings hurt… it’s an automated attendant at the other end of the line. … as consumers, we come to begrudgingly accept these as a fact of life.

CMIQ calls Fonolo’s approach “Nirvana”

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Customer Management IQ, one of the leading publications covering the call center and customer service space covered Fonolo in a recent article.

Senior editor Blake Landau wrote:

The paradigm here is that callers, like visitors to a standard or mobile web page, get to click or tap on the box that best represents what they need. From there, the Fonolo application connects them directly to the agent that can best serve them. Callers get directed to the right agent on a first try, instead of ‘mis-directing’—but no longer interface with the plague of DTMF or speech driven menus. Nirvana!

The problem of “mis-directing” or, as we call it, “misnavigating”, is more than just an annoyance to callers, it can also add considerable cost to the call center operation. When a call is connected to the wrong agent, time is wasted while the agent: assesses the caller’s needs, concludes that an internal transfer is needed, explains that to the caller, makes the transfer, then logs the call or does other wrap-up work before rejoining the queue.

Landau discussed Fonolo’s approach to turning the phone menu into a visual interface and described it as a “more natural way” to navigate.  We certainly agree. It is hard to overstate just how much people dislike traditional phone menus. Whether they are speech-driven or tone-driven, they do a poor job of getting callers to the right agent while usually increasing the caller frustration.

Landau concludes:

[Fonolo’s] mission is not to dismiss or replace the IVR, but rather to make it work better by inserting more intuitive interfaces between the call center and the customer to better both sides of every manager’s equation—customer experience and cost control.

Fonolo at eComm Conference today

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ThEcomm 2010e 3rd annual Emerging Communication Conference starts today in San Francisco. eComm always has a special place in our heart because we unveiled Fonolo for the first time at eComm ’08 and then unveiled our enterprise product at eComm ’09.

Unfortunately, the Iceland volcano is having a big impact on the attendee list, but the show is going on! Some speakers are even delivering their address via Skype. (Oddly appropriate.)

Here is the write-up for Shai’s presentation tomorrow:

Customer Experience in the Call Center: Can the Leaks in the Pipeline be Fixed?

Every day, millions of people make calls to large companies – banks, airlines, cell phone carriers, etc. – to speak to a customer service representative. For consumers, these calls often amount to a dreaded chore as well as a considerable loss of time. For companies, these calls amount to billions of dollars added to annual operating costs. Given the sheer volumes of time, money and energy spent on these customer service calls, improvements to their efficiency – even small ones – carry the potential to deliver significant results. Flaws in the way these calls are handled increase costs to companies in at least two ways: the higher expense associated with longer calls, and the loss of goodwill from customers.

In 2008, Fonolo launched a service for consumers with the goal of learning more about how some of the shortcomings in the call center experience could be addressed. Fonolo’s technology platform performs navigation on behalf of callers dialing a corporate phone system, connecting them directly to the person or department they need. To make this possible, the company maintains a database of over 500 companies. For each company, the content, structure and usage of its phone menu (IVR) are tracked.

As a byproduct of this traffic, the company has accumulated a unique perspective about what it calls the “pipeline” that exists between a caller and the call center agent. This presentation draws on that traffic data, as feedback from Fonolo users and other industry sources, to identify trends in technology, caller expectations and customer experience.


Third Canadian bank in 2 months releases an iPhone app

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Last month, two of Canada’s 6 major banks have released iPhone apps: CIBC and BMO. I’m sure that the other 4 are scrambling to get theirs out the door. Yesterday, ING Direct (not one of the “majors” but still a large national bank) released theirs. In the US, the same pattern is in full swing.

The smartphone will redefine the call center experience

We believe this trend is going to accelerate, driven by the rapid proliferation of smartphones. (Especially as handsets get cheaper and cheaper.) We also believe that the smartphone, as a platform, has the power to redefine the call center experience and make it better for both the callers and the companies.

Power untapped, for now

Today, the power of this platform is largely untapped. The banking apps do all kinds of interesting things, but  in terms of calling in to the bank, the phone is reduce to a plain ‘ole dial tone. There is tremendous opportunity to use the keyboard, screen, data channel and computing power of the device to make those transactions smoother.

The future of the call center is a visual interface

The case for a visual interface has already been there for years as customers are increasingly in front of a web browser when calling. We’ve seen efforts to capitalize on this cross-channel opportunity in the form of click-to-call and click-to-chat. (Fonolo, we believe, takes this concept a step further with our intelligent calling features.) The rise of the smartphone reinforces that case, and makes it irresistible.

Welcome to our new blog

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Welcome to the new Fonolo blog!

Until now, Fonolo news and related information was posted on my personal blog, www.shaiberger.com. But the time has come to start an official channel for Fonolo. I will continue to use my own site to post important Fonolo news, and industry commentary.

I will be joined on this blog by Fonolo’s cofounder and COO Jason Bigue as well as other members of the staff. We look forward to the conversation with you!

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