Call centers find profit in the 'Net

By KIMBERLY PATCH AND ERIC SMALLEY
Network World, 05/17/99

Call centers are accepting faxes and e-mail messages and are adding chat capabilities to become "contact centers." Contact centers, in turn, are merging with Web sites and marketing databases to become the centerpieces of customer relationship management systems. Network managers, naturally, have to take on the integration challenge to make it all happen.

There are many questions to be answered. Do you place all types of contacts in one queue? Do you go with call-through or call-back buttons? Should you replace your interactive voice response (IVR) system with speech recognition technology?

But this integration is the kind of challenge that, handled correctly, can have a significant impact on a company's bottom line. All-encompassing call centers can cut costs, most notably by improving the efficiency of call center agents. Call centers can also increase customer loyalty and boost sales if you take the time to think through the various ways your customers will be contacting you and arrange access accordingly. Woe to the company that fails to properly integrate its call center with its Web site - your agents can expect some nasty feedback if customers are asked to repeat steps they've already taken online.

The past year and a half has witnessed a boom in products and services aimed at adding fax and e-mail as channels into customer service, sales and help desks. Companies such as Lucent, WebLine Communications, Edify, IBM's Corepoint Technologies and Genesys Telecommunications Laboratories are all addressing the issue. Automated call distribution systems now route fax and e-mail "calls" with traditional voice calls to contact center agents. Companies can set priorities based on the type of channel from which a call is received or dedicate a set of agents to handle contacts from a specific channel, such as e-mail.

Companies are beginning to provide more detailed customer service through their Web sites, in particular by making it easier for customers to find information themselves. Today, the market for software that provides customer service via Web sites is about $25 million. By 2002, the market should reach $658 million, according to David Cooperstein, a senior analyst at Forrester Research.

Companies will save an average of 43% per contact by implementing Web-based customer service - even with an average increase of one-third more contacts over the next two years - because an increasing percentage of contacts will be self-service, Cooperstein says.

Tying in the Web

The last year or so has also brought a proliferation of tools aimed at integrating Web sites and contact centers. Queries from Web sites need to be handled differently from those received via fax and e-mail, which are usually fairly simple. When a customer queries a company through its Web site, contact center agents need to know the context surrounding the query - not only what's on the Web site, but also from where in the site the customer has made contact. When agents don't have this information, customers can perceive the quality of service through the Web site to be lower than through other channels.

"Our Web presence is an additional channel by which the agent can service the client. It's really critical to us that the customer's experience is consistent across all of the points of contact," says Michael Batt, marketing director of Merrill Lynch Online in Princeton, N.J.

There are three types of integration between Web sites and contact centers. The simplest is Web-based chat, in which contact center agents engage customers in typed chat sessions using tools from companies such as Live Response. But with chat alone, agents don't know where customers are in the Web site. That ability requires the next form of integration - tracking, with tools from companies such as BroadVision and Inference Corp.

An even higher level of integration is shared browsing, or page pushing, which requires tools from companies such as HipBone Software and WebLine. These tools allow an agent and customer to navigate the Web site together, seeing the same pages at the same time and sharing the cursor so either can initiate a move to another page.

Web chat costs $2,000 to $2,500 per agent to implement, according to James Mitchell, chief technology officer of Davox Corp., a call center hardware and software vendor. A mid-size call center with 50 to 100 agents can expect to pay $4,000 to $5,000 per seat for a Windows NT system that supports access by fax, e-mail and Web site, as well as call switching, screen pops and back-end computer-telephone integration (CTI), Giga's Landoline says.

Integrating Web sites into contact centers improves service by giving customers an additional channel to agents and by better informing agents about customers' needs at the beginning of a contact. Better-informed agents reduce costs because their talk time is shorter, allowing fewer agents to handle the same number of contacts. As more companies take this tack, it will increase the pressure on the competition to do the same or risk losing customers.

Perhaps the most enticing benefit of integrating Web sites and contact centers is increased sales. Computer maker Micron Electronics has integrated its Web site with its call center using Lucent's Internet Telephony Server (ITS).

"The leads are already qualified because they're on our Web site. We know where customers are on the Web site so we know what they're interested in," says Jim Jacobson, who until last month was director of IT development for Micron Electronics.

Micron's agents not only know where customers are in the Web site, they are also able to push pages to customers, in effect steering them around the site. Jacobson has proof the strategy works, noting that 50% of calls that come in from the Web site result in sales, compared with between 20% and 30% for standard telephone calls.

And there are other benefits. "Our average selling price per transaction is higher on the Internet, and it's cheaper for us to do business on the Internet," Jacobson says.

Many integrated Web site contact centers use call-back buttons, or fields where customers can type in their telephone numbers to have agents call them back. The purpose of call-back buttons is simple: to reel in the customer before he changes his mind or surfs elsewhere. However, call-back buttons can present policy and procedure challenges.

"You've got to be very clear in communicating when to expect the call back," says Mike Burroughs, vice president of operations for Phillips Publishing of Potomac, Md. "If your call center is going to be e-mail intensive and inbound-call intensive, it creates a challenge for call center managers because now what you're talking about is a form of call blending." Call blending is the practice of having inbound and outbound calls handled by the same call center, a practice he says has worked well for only a few industry segments because the two types of calls require the agents to have different skills and incentives.

Talk to me - the Web as telephone

Phillips is integrating e-mail into its contact center via IMA's Edge multichannel contact center software and is planning to integrate its Web site, Burroughs says. As part of the plan, the company is considering call-through buttons, which let customers speak directly to an agent through the Web site, he says.

Call-through buttons use voice-over-IP technology to allow customers to call agents directly from within a Web site. When an Internet chat or voice call is routed to a Micron agent, for example, an automated voice tells the agent the call type, and the Web page from which the customer is calling pops up on the agent's screen, Jacobson says.

The idea of a call-through button is the same as it is with call-back buttons: to generate a contact at the moment of interest. Call-through buttons have an advantage over call-back buttons because they don't require consumers to have a second telephone line.

However, voice-over-IP technology is still maturing. The quality of voice over IP still lags behind traditional telephony, which could be a liability. Micron has experienced relatively low-quality connections with voice over IP, Jacobson says.

"It's like talking to China," he says.

Also, few people are using voice over IP. The majority of Internet calls to Micron's contact center have been chat because relatively few people have microphones on their PCs, he says.

Talk to my server - the telephone as Web browser

The ultimate goal of technology is automation, which replaces higher-cost human workers. Automation will hold labor costs at the current level of 67% of all call center costs in the face of increased traffic from e-mail and Web sites, says Joe Outlaw, a research director at Gartner Group in Delran, N.J. Network services account for 18%, equipment 8% and facilities 7% of call center costs, according to Gartner Measurement, a division of Gartner Group.

Speech recognition technology, implemented as an upgrade to IVR systems, can significantly reduce the number of calls that go through to contact center agents. Several companies, including Nuance Communications, SpeechWorks International and Lernout & Hauspie, provide speech recognition software for contact centers.

With speech recognition technology, customers ask questions over the telephone, the questions are converted to database queries and the responses are read back to customers using a synthesized voice. Companies are using speech recognition to allow customers to access data directly rather than having human agents fetch the data for them. Several brokerage firms, including Charles Schwab and Fidelity Investments, use the technology to allow customers to make financial transactions.

Speech recognition systems are a significant improvement over touch-tone IVR systems because users direct the interaction. "The likelihood of people using an automated system goes up significantly when they are in control," says Steve Ehrlich, vice president of marketing at Nuance.

The more people use automated systems, the greater the savings for the company. From 40% to 45% of callers "zero out" of traditional IVR systems and immediately talk to agents, Giga's Landoline says. Advances such as speech recognition should reduce that figure to about 20% in the next couple years, he says. Speech recognition also costs 30% to 40% less per call than IVR, he says.

A simple speech recognition application that recognizes digits costs around $250 per line, applications that allow customers to perform a series of transactions cost between $500 and $1,000 per line, and high-end applications that feature full natural language processing cost around $3,000 per line, Nuance's Ehrlich says.

Speech recognition technology also offers a greater degree of security. Financial services companies in particular are interested in using speech recognition for the added benefit of user authentication via voice prints. Voice authentication adds $200 to $300 per line, Ehrlich says.

Human factors and pitfalls

Integrating Web sites with contact centers can change the experience of not only customers, but also of agents. Web-based and speech recognition self-help systems reduce the number of repetitive, routine inquiries that agents have to handle. Less drudge work improves job satisfaction, which reduces contact centers' typical 25% to 30% annual turnover rates, Landoline says.

But Web site-contact center integration also brings human resources challenges. Agents will need to know not only the content of the Web site, but also its format and layout, which entails additional training. Organizational challenges can also arise, given that contact centers and Web sites are typically staffed by different departments.

There are plenty of technical pitfalls lurking for IT staffs, as well. Network managers need to be prepared for changes in network traffic and bandwidth use, particularly for scenarios in which large numbers of customers use voice over IP simultaneously, says Rick Favro, vice president of global customer care solutions for MCI Systemhouse in San Francisco.

The design of a Web site has implications for Web site-contact center integration. With Web-based forms, the information about where a customer is at any point in a transaction is more detailed than simply what page they're on at the time, Favro says. For example, if a customer needs help at some point in a single long form, the agent will have little idea where the customer is on the page. But if the customer needs help in one of several shorter forms spread across different Web pages, the agent can zero in on the problem more quickly.

Also, call-through buttons can become a costly replacement for good Web design if customers become lost in a Web site and use the buttons only to call live agents for help, according to Phillips' Burroughs.

Organizing content for speech recognition systems is another challenge because voice user interface design is relatively new. "The common mistake might be to say, 'OK, I've got this Web page. Let me just imitate it over the phone,' " Nuance's Ehrlich says. "That is a recipe for disaster because people do not speak in the same way that they read." For example, Web pages can present users with a lot of information at one time, whereas speech-based voice response systems require smaller increments of information to pass back and forth between the user and the system.

When turning call centers into contact centers and integrating contact centers with Web sites, the best advice is go slow or go with an integrator. IT staffs handling the project on their own should take it one step at a time, making the business case for each piece of the project before considering the next. Integrating e-mail into the contact center should be the first step. And when integrating Web sites with contact centers, IT staffs should focus on tracking and chat functions before worrying about call-through or call-back buttons.

About 40% of the average call

center integration project is custom development work because of the prevalence of legacy systems, Giga's Landoline says. This makes a good case for going with an integrator, especially for older terminal-based call centers that require upgrades to PCs and networks.

Many businesses should be able to make a case for shifting much of their contact center traffic volume to self-help systems to cut costs, boost sales or at least be prepared for the increase in traffic volume from multichannel access. The integration effort will also make it easier for businesses to implement different classes of customer service based on the perceived value of the customer rather than the channel by which the customer is communicating with the company.

As Jacobson says, "It's all about generating calls and generating efficient calls."

Call centers find profit in the 'Net

Tying in the Web

Talk to me - the Web as telephone

Talk to my server - the telephone as Web browser

Human factors and pitfalls

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