So implementing your CRM strategy is keeping you busy
A Business Case for Speech-Enabled, Self-Service
Increase revenue. Reduce costs. Generate higher profits. You’ve heard it before and know that vigilant
attention to these crucial business principles is what drives today’s thriving companies. And with these
business credos in mind, contact centre and information technology executives have scrambled to
integrate the latest technology into their Customer Relationship Management (CRM) strategy over the last
few years. By now, you’ve transformed your call centre into a dynamic contact centre with web-based
customer care, multiple CRM channels, and data mining and business intelligence systems. Maybe you
have even added sales force automation. And throughout this process, your automated telephone-based
interactive voice response (IVR) system has continued to quietly chug along unnoticed and virtually
unchanged. So why fix what isn’t broken?
You may have heard lately that leading companies like Dreyfus, Cigna, GE, Allstate, Avon, and others
have significantly improved customer satisfaction, achieved higher self-service utilisation rates, and
incurred dramatic cost savings – all resulting from the addition of speech recognition to their IVR systems.
By evaluating their current CRM strategy, these companies have recognised that speech recognition is
the natural extension of their IVR systems. How then can speech recognition be used in your contact
centre? Will your customers like it and will your employees know how to use it effectively? And how about
revenue, cost savings, and the ever-important ROI?
In this document, we will address these questions by sharing the experiences of early speech recognition
IVR adopters, reporting on exciting new findings from leading industry experts, and presenting information
and tools to help you analyse your contact centre needs. Read on and you’ll learn why callers prefer
speech-enabled to touchtone IVR systems and use automation up to 60% more. You’ll see why speech
recognition calls can take half as long to complete as touchtone calls, improving customer satisfaction,
allowing far more calls to be serviced using existing staff, while reducing call charges up to 50%. These
are permanent, year-upon-year cost reductions that translate into millions of pounds of annual operating
savings for a typical contact centre. The same reasons you went to an IVR system in the first place –
enhance customer satisfaction, reduce costs, maximise agent efficiency, generate incremental revenue –
are the very same reasons you need to explore the world of speech recognition. Speech provides all the
same benefits, just to a greater degree! Speech opens an entire realm of possibilities barely imaginable
with touchtone evolving into a full Enterprise Voice Portal. Are you ready for the freedom of speech?
Touchtone IVR was cutting-edge technology
Since the 1970s, live agents in call centres have received and serviced inbound calls from customers,
prospects, business partners, and employees or placed outbound calls as part of a company’s
telemarketing activities. As call volumes increased, companies looked for ways to handle this increased
traffic by supplementing their live agents. Automation in the form of Interactive Voice Response (IVR),
typically with a touchtone user interface, began to be adopted. Today, more than 2.5 million IVR ports are
in service used at close to 50% of companies with formal contact centres using Automatic Call
Distribution (ACDs) as shown in Figure 1 below. On average, 15% of inbound contacts are handled via
self-service. Telephone self-service using IVR gained market acceptance for many good, tangible
Figure 1. Enabling technologies within ACD base.
Improving customer satisfaction – to a point
Conventional wisdom once said all customers phoning your company’s freephone number needed and
wanted to speak with an agent to assist them with their service needs. But after long waits in queue, long
service phone calls, and inconsistent or incorrect information and service treatment, those same
customers said there had to be a better way – and there was – automated self-service using IVR. When
properly designed and matched to the right applications, IVR resulted in better customer service and
increased customer satisfaction and loyalty resulting in increased revenue from existing customers.
Callers were able to access information, update records, and perform transactions, both in and outside of
normal business hours 24 X 7 X 365. They received consistent, accurate information, often quicker and
simpler than having to wait in a queue for an agent. Blocked calls were all but eliminated and abandoned
calls, average wait time in queue, and average call length were all reduced.
Dramatic savings through self-service
Companies were also eager to implement self-service options via IVR because of its tremendous cost
advantages compared to a live agent. Most calls into a contact centre are routine and repetitive in nature
and can easily be completed using automation. In a study by the Gartner Group, the average cost of an
agent-assisted call was £3.85 with an upper range of almost £8.50 (see Figure 2). This is compared to
30p for a touchtone IVR call. IVR is also very cost competitive with web-based self-service. So you can
see why, at a ten times cost advantage for self-service, 2.5 million ports are in service today handling
millions of calls that would have unnecessarily (and expensively) been serviced by an agent. With fewer
calls reaching agents, contact centres can accommodate future growth in call volumes with existing staff
levels. Companies in many industries including banking, insurance, financial services, media,
telecommunications, utilities, healthcare, service providers, transportation, retailing, government, oil and
gas, manufacturing, higher education, and newspaper publishing have taken advantage of these huge
savings improving customer service at a fraction of the cost.
Figure 2. Contact centre costs.
Optimising live assistance and self-service
Of course, not all calls can or should be automated. The best candidates are those with a high transaction
volume, repeatable, consistent business logic and service handling, or those that present difficult agent
staffing problems such as off-hour call support or promotions. Calls requiring complicated, custom or
unique responses or specific knowledge are still best served through a live agent. Automated systems
can handle much of the low value-added requests for routine information like store hours and shipment
status, while agents can focus on more complicated, value-added transactions, up-sell, cross-sell, and
build customer relationships. The key is to optimally match the application and the call with the
appropriate and most cost-effective service level required by the customer. Automated solutions are not
meant to completely replace live agents, but rather to enable self-service and reduce unnecessary costs.
The goal is to find the optimum blend of live assisted and self-service call handling.
Maximising your investment in agents
Live agents are expensive (see Figure 3). By the time you factor in all the costs including salary and
benefits, recruiting, screening and training, phone usage charges, computer hardware and software,
telecommunications and data networking equipment, and floor space plus other administration and
overhead costs, a typical contact centre agent costs about £25,000 per year. Moreover, agent turnover in
the contact centre industry is exceptionally high – in the 23% per annum range. All this goes to show that
an agent’s time needs to be allocated properly and efficiently. As IVR began to be integrated with
Computer Telephony Integration (CTI), additional benefits in pre-call processing before live agent
handling were seen in the form of improved agent efficiency, cost control and customer satisfaction.
Because IVR provided access to back-end databases, the same information that was available to a caller
was now available to an agent. This, coupled with caller ID/Automatic Number Identification (ANI) and
Dialled Number Identification Service (DNIS), allowed the system to pull a customer record or product
information through the CTI-switch interface to route the data and the call to the available agent with the
skills or knowledge best able to service the call. Agents became better informed and better able to focus
on complex queries, thereby better serving callers. According to Datamonitor Research, pre-call
processing and skills-based routing reduced the length of the call on average by 18% and improved call
resolution and customer satisfaction. As agents focused on highest value-added tasks, their job
satisfaction increased which in turn reduced attrition levels and the associated hiring and training costs.
Figure 3. Agents represent the largest contact centre cost component.
Turning agents into salespeople
A critical aspect of your CRM strategy is to increase the value-add of live assistance by maximising the
agent’s ability to satisfactorily handle a call and up-sell or cross-sell resulting in increased sales revenue.
Agent costs represent by far the largest contact centre cost component (65% of the total), and a
company’s ability to maximise its investment in this major asset and turn the contact centre from a cost
centre to a revenue centre is a major benefit enhanced by IVR. Using data reported to Benchmark Portal
Inc. by contact centre managers (see Figure 4), more than 40% of contact centres engage in up-selling
and cross-selling, and 20% of all inbound calls present up-selling and cross-selling opportunities. The
managers also report that over 10% of their outbound sales calls result in a sale with the annual average
sales revenue per agent totalling more than £13,500. Allowing your agents to focus on selling instead of
answering routine inquiries makes good business sense – and transforms the contact centre into a
revenue generation centre – not just a cost centre.
Figure 4. Capitalising on up-selling and cross-selling opportunities enhances agent value.
IVR was then, speech is now
Speech recognition is as much of a technological breakthrough as touchtone IVR was 15 years ago. And
interestingly enough, the very same reasons your company added touchtone IVR in the past apply to
speech-enabled IVR today – enhance customer satisfaction, reduce costs, maximise agent efficiency,
and generate incremental revenue. Speech just gives your company a bigger payoff!
Callers prefer speech-enabled systems
For many applications, the size and depth of touchtone menus were confusing, inflexible and made
completing certain transactions long and laborious. Other applications, even with very short, flat menus,
were difficult to manoeuvre because users were required to input alphanumeric representations such as
stock symbols, airport codes or long part numbers. This lack of user friendliness defeated the purpose of
automation and capped self-service adoption rates. Callers became frustrated and dissatisfied. Many
simply “zeroed out” and waited for an agent or worse, abandoned the call. The touchtone interface
created a longer, more costly call, agents’ workloads were not reduced, and they were still forced to take
routine calls. Speech recognition eliminates this problem. Early deployments in the business, finance, and
insurance vertical markets clearly suggest that Advanced Speech Recognition (ASR) is not simply
replacing agents. It is replacing entire DTMF self-service platforms because the call avoidance economics
that justified these platforms are being exhausted at five or six menu options. This is not a capacity
limitation; it is a user interface (UI) limitation and to continue to enjoy additional cost savings through self-
service voice automation requires going to speech recognition.
New ASR capability combined with IVR offers the advantages of automation in a much more user-friendly
way. No interface is more natural than simply speaking your request into a telephone. Speech recognition
dramatically reduces on-hold time and eliminates confusing touchtone menus. Consumers have reacted
very favourably to speech recognition. In May 2000, Nuance Inc., completed a comprehensive study of
speech-system users. This study found that 83% preferred speech systems to touchtone, and the overall
satisfaction rating with these systems exceeded 87% (see Figure 5). Many respondents also preferred
speech systems to agents and/or operators because of the consistent service level this medium provides. A
recent Frost & Sullivan study noted that 50 to 60% of callers who skip complex touchtone systems are
comfortable using speech recognition for the same application. Studies by Meridien Research from October
2000 have shown up to 70% of the straightforward calls currently received by contact centres can be easily
automated with voice recognition.
Figure 5. Callers prefer speech recognition to other types of telephone support.
Callers use an automated system more
An April, 2001 study by Giga Information Group found using speech recognition can increase IVR usage
from 20% to 60%. In fact, a well-known financial services firm was able to increase its percentage of
automated calls using speech recognition compared to its previous touchtone IVR by 20% within the first
year, 30% the second year, and anticipates a 44% improvement within the third year (see Figure 6). This
increase in self-service utilisation rates is a major contributor to the quick payback and high ROI
attainable from investing in speech-enabled IVR.
Figure 6. Speech early adopter results.
More self-service saves money
Using data from Benchmark Portal, an average contact centre handles about 675,000 contacts per month
of which 15% are handled by self-service. That says roughly 100,000 calls are typically handled within the
IVR monthly. Using the Gartner stated cost advantage of £3.55 (£3.85 live assisted versus 30p self-
service IVR) per call, a 20% improvement in IVR utilisation due to speech would mean 20,000 more calls
per month would be serviced in the IVR saving the typical contact centre over £70,000 monthly. A 40%
increase in IVR utilisation would save the typical contact centre over £140,000 and a 60% increase would
save over £210,000 monthly. Based on the increased self-service utilisation rate alone (without even
counting incremental revenue derived from increased agent up-selling and cross-selling), you can see
how a typical contact centre can achieve savings of at least £0.8 million and as much as £2.5 million
annually by implementing a speech-enabled IVR (see Figure 7)!
Figure 7. Benefits of higher IVR utilisation.
Speech lowers network charges
By cutting – or eliminating – hold time, menu navigation time, and the time spent prompting the caller
through various menus, speech can dramatically reduce call length and associated telecom charges.
What’s more, when callers opt for speech, the hold times for callers waiting for agents decrease as well,
further reducing call charges. A recent Frost & Sullivan study notes that call charges dropped on average
of 15 to 50% with speech recognition. An April 2001 study by Giga Information Group found the use of
speech recognition saves money by shortening the length of a call by 30 to 50% from menu-driven IVRs.
A leading financial services firm saw the average length of their automated calls fall by 33% using speech
versus touchtone (see Figure 8). This savings in call charges alone means the ongoing costs of a speech
versus touch IVR solution is often one third less. A typical contact centre with 173 full-time equivalent
agents generates more than 12.9 million minutes annually in telephone usage. For every 10% reduction
in call length, the typical company can save more than £70,000 annually in phone charges. Speech
adopters are saving hundreds of thousands of pounds annually on their phone bill alone plus the savings
from increased IVR utilisation!
Figure 8. Speech calls are more cost-effective than touchtone.
Speech enables new self-service applications
The previous examples have focused on traditional contact centre applications in which speech
recognition has replaced touchtone as the preferred IVR user interface. Applications involving balance
enquiries are more pleasant with speech. Applications involving parts availability and ship dates are more
practical with speech. More pleasant and usable applications do drive higher IVR self-service utilisation
rates as depicted below in Figure 9; however, the quantum leap in effectiveness will come from the
applications that are now newly possible with speech. These applications are now being extended in
entirely new ways across sales, service and marketing. Initially web-enabled to provide remote,
networked access from a PC, these applications are now being voice-enabled as well to provide mobile
voice access to the same data, applications, and transactions via a fixed or mobile telephone.
Figure 9. Speech opportunities.
Applications within sales force automation such as opportunity management, configuration and quote
management, partner relationship management, and incentive compensation readily lend themselves to
voice communication by mobile and remote employees and other members of an enterprise’s distribution
chain. Field force automation applications including field service forecasting, scheduling and dispatch,
contract management, warranties, repairs, and parts availability, tracking, and management are also
being speech-enabled. Marketing departments are deploying speech-enabled campaign management
systems to track multi-channel marketing programme effectiveness.
Speech recognition is being used in supply chain and order processing applications. A leading cosmetics
retailer uses a sophisticated speech-enabled IVR to allow their large network of independent sales
representatives to place unassisted orders 24X7, while on the move, without using a computer – while
significantly reducing expenses.
Each of these applications has a strong stand-alone business case. As they proliferate within an
enterprise the payback improves because of the economies of scale offered in an Enterprise Voice Portal
(EVP) as shown in Figure 10.
Figure 10. Enterprise Voice Portal (EVP).
An Enterprise Voice Portal is a single, distributed software platform shared across multiple applications
requiring voice access to back-end data. An EVP utilises single text-to-speech and Advanced Speech
Recognition engines, leverages and re-uses common grammars, and provides a centralised voice brand
identity. This platform and associated applications deliver a single solution enabling real-time,
personalised, self-service access to data, applications and/or transactions, wherein the user interface
tends to be natural language spoken commands and the output may be any media type -- spoken data,
fax, email, or wireless text. Creating an Enterprise Voice Portal is the end goal of progressive enterprises
striving to better serve their customers, partners, suppliers, and employees in the most cost-effective
manner possible. The scaleable, distributed, standards-based, client-server architecture of Syntellect’s
Vista IMR solution provides the foundation to deliver cost-compelling, speech-enabled solutions today in
the contact centre that can grow to support sales force automation, field force automation, supply chain
management and employee benefits applications tomorrow.
Now that you have seen how a speech-enabled IVR increases customer satisfaction, increases the rate
of self-service utilisation (creating dramatic cost savings), lowers phone charges, generates sizable
incremental sales and creates the foundation for an Enterprise Voice Portal, are you ready to explore the
freedom of speech? The financial and customer service benefits are simply too big to ignore. Your
customers deserve it. Your competition IS doing it and your management will ask about it sooner rather
Tools you can use
What you need are some tools to help you begin the analysis. Let’s look at a methodology you can use to
determine whether your touchtone IVR has hit the “effectiveness wall” and to what extent your contact
centre is a candidate for speech recognition.
Figure 11. Five signs your IVR isn’t working anymore.
By simply tracking these traditional contact centre performance metrics over time, you can see whether
your contact centre and customers have hit the wall with touchtone and are ready for the freedom of
The Impact of Speech
Finally here are some metrics to look at when evaluating the return on speech for your
organisation. Example data is provided depicting a typical contact centre and call volume
utilising 24 ports of IVR.
Example Data Your Data
Speech Speech Before Speech After Speech
Percent of calls handled by live agents monthly 66% 59%
Percent of calls handled by IVR automation
monthly 34% 41%
Calls per month served by live agents 390,000 348,000
Calls per month served by IVR automation 200,000 242,000
Increase in calls handled monthly by
automation N/A 42,000
Cost savings per automated call N/A £3.55*
Monthly savings N/A £148,320
* Gartner reported Average cost per live agent handled phone call £3.85
Average cost per self-service IVR handled call 30p
So are you ready for the freedom of speech
Rebecca Wright can be contacted as follows:
Tel: +44 (0) 1628 897500