Some airlines are replacing their onboard entertainment systems with iPads to shave their planes’ weight by a mere 7 percent, yet enough to save tens of millions of dollars annually as fuel costs soar. That’s just one example of how companies are seeking every opportunity to protect their bottom line without surrendering any form of customer convenience.

At US Airways, one found opportunity is centered on their customer care. The airline went through several mergers and acquisitions over the years, and one byproduct was a hodge-podge of interactive voice response (IVR) systems that didn’t meet the needs of US Airways or its customers. US Airways determined that replacing those systems with a single, cloud-based IVR platform would significantly reduce its customer care costs while providing their customers a wider range of support options. They learned that many consumers and business users actually prefer self-service. US Airways believed that a next-generation IVR system, with support for natural language speech recognition, would enable it to best accommodate that preference.

“The more we know about our customers and the reason for their calls, the more efficiently we can provide the assistance they need and allow them to get on with their day,” says Kerry Hester, senior vice president for operations planning and support at US Airways. “By integrating those insights with cutting-edge speech recognition technology, we are providing our customers with the convenient, quality care they have come to expect from US Airways.”

US Airways is a shining example of how a growing number of organizations are using next-generation IVR systems to save money and deliver a superior customer care experience. Increasingly, these leaders are choosing cloud-based IVR systems rather than premise-based platforms. Want to know why?

The Future is Now and Natural

Organizations are flocking to hosted IT and contact center solutions because they provide access to the latest and greatest technologies much faster and more cost effectively than premises-based platforms. In the case of IVR systems, access to natural language technologies is a major draw.

Natural language technologies enable airlines, banks, telcos and other organizations to accommodate customer preferences for effortless self-service. Using natural language delivers self-service speed and convenience to these customers.

Even as little as five years ago, IVR systems were designed primarily to benefit the organizations that operate them, to minimize agent headcount and save cost. Today’s IVR systems are designed to be customer-centric, reflecting that consumers have ample choices for where they spend their money as well as the fact that electronic word-of-mouth is now a resonant communication vehicle for poor customer service experiences.

It’s a mistake for organizations to assume that any IVR system will do. With today’s conversational mobile assistants like Siri, customers today are expecting an IVR experience that’s also conversational, that’s personalized, and that’s capable of providing the right answer right away. That’s where natural language technologies excel.

US Airways is one company using natural language so that their callers can simply speak the reason for their call and get the information they need with the least effort possible. Conventional IVR systems require callers to speak from a pre-defined list of words or phrases in their answers to questions, such as “departure” or “arrival” in the case of airlines. When the caller instead uses vernacular terms such as “leaving” or “landing,” many IVR systems can become confused because they have no recognizable match in their database.

The problem snowballs if the system asks the caller to repeat himself, asks follow-up questions or provides the wrong answer. The caller becomes frustrated because it becomes painful to get the information he needs and inevitably starts pressing “0” to get to an agent. This common scenario according to Forrester Research is expensive because each conversation with a live agent costs $5 to $12.

With natural language technologies, callers are empowered to use their own terminology to interact with the IVR because the system uses advanced technologies and techniques to determine the caller’s intent. This combination of intelligence and flexibility has several benefits for the organization and for its customers:

  • Callers get the information they seek in a timely manner instead of being frustrated. A positive experience could end in a quick and easy self-service interaction and a satisfied, loyal customer. A poor IVR experience might result in an unhappy and unnecessary transfer to an agent, or even a colorful complaint on the caller’s favorite social media site.
  • Fewer calls require agent assistance. It’s estimated that IVR systems can automate 20 to 90 percent of a company’s incoming calls while still being able to increase service quality and customer satisfaction, according to DMG Consulting. Hosted IVR systems provide additional benefits to businesses in that they allow for companies to pay as they go, shifting expenses from capital to operational and providing significant budget flexibility. For example the Yankee Group, in a three-year total cost of ownership study, found that a 50-agent call center can benefit from a savings of 25 percent by deploying a hosted IVR solution over an in-house solution while larger call centers can realize even more significant savings.
  • The system can quickly determine when a live agent is the best way to interact with a customer. With natural language technology increasing the percentage of callers who use only the IVR system, live agents can devote more attention to the rest.
  • Companies can bolster their brand by providing superior customer experiences.  US Airways is the first domestic airline to implement natural language understanding, delivering a customer experience that gave the company a significant market differentiator.

Although natural language technologies are available in premises-based IVR systems, many enterprises prefer a hosted solution because hosted natural language provides superior performance at lower cost. The cloud can leverage billions of interactions across the network and quickly and continuously improves its ability to understand what callers say. Enhancements and even newest technology versions can rapidly be made available for organizations to take advantage and benefit from.

Hosted IVR services also provide greater flexibility for enhancing individual IVR application to increase performance and decrease customer frustration. Suppose that callers begin speaking the name of a new product that hadn’t existed when the IVR application was first developed. With cloud-based IVR, the new product owner could easily add the new product to the set of recognized products without the need for application coding changes. That’s not the case with most premises-based IVR.

Superior performance, conversational technologies, and ease of maintenance are among the reasons why enterprises worldwide are increasingly choosing cloud-based IVR services. In 2012 in North America, organizations will spend twice as much on hosted speech IVR, Ovum says. By 2016, the analyst firm predicts that spending will grow to 3X’s spending on hosted speech IVR over on-premises speech IVR.

The Power of Personalization

Along with natural language, delivering a personalized experience is another reason to choose hosted IVR systems. Intelligent IVRs quickly identify who is calling and anticipates the reason for their call.   For example, suppose that an airline passenger calls customer service on the day of her flight. It’s likely that she wants to know if her flight is on time. Today’s IVR systems anticipate callers’ needs and provide information before the caller asks: “Good morning, Andrea. Your flight is scheduled to leave on-time at 10:15 a.m. from gate A17. Is there anything else I can help you with?”

Research shows that when IVR systems are personalized with features such as greeting callers by name, callers perceive the system as more effective. Anticipating their needs furthers that perception and reduces or even eliminates the traditional IVR dialog that begins each call. Nuance data shows that with every additional IVR question, about 3 percent of callers drop for reasons ranging from frustration to time constraints.

Another example of the power of personalization is up-leveling customer convenience using integrated outbound calling or text messaging.  Imagine an IVR that simply offers to call the customer back when an agent becomes available instead of asking them to wait on hold for an agent.  Or, an IVR that eliminates the need for a customer to keep checking in because it offers to call the customer back or send them a text with updated status on a service outage or lost baggage.

For callers that opt to wait on hold for an agent, a sophisticated IVR system can gather data to help reduce hold times. US Airways’ IVR asks callers relevant questions about travel plans and then provides the callers’ responses to the agent, reducing agent call lengths and making callers feel more productive. One US Airways customer posted on FlyerTalk, an interactive online community for frequent flyers: “The time previously spent on hold is now used by the computers to pull up your records. I’m going to call it a win.”

Personalization also can include using biometric technologies to eliminate one of customer care’s biggest hassles: remembering and providing passwords, PINs, account numbers and other information. For example, Turkey’s largest mobile operator, Turkcell, uses a customer’s voice to verify her identity in just five seconds. Unlike PINs and passwords, voiceprints are impossible for Turkcell customers to forget or for fraudsters to use. Each caller also can be checked against a watch list of known fraudsters’ voiceprints to help Turkcell protect its customers against identity theft.

Branded as Voice Signature, Turkcell’s service leverages the fact that human voices are as individually unique as fingerprints and retinas, making them an ideal way to authenticate customers. Each Turkcell customer records a voiceprint, and on subsequent calls, the biometric speaker-verification system quickly compares the caller’s voice to the voiceprint to verify her identity.

A cloud-based IVR solution gives organizations a cost-effective, low-complexity way to implement and ramp up cutting-edge technologies such as biometrics. In Turkcell’s case, more than four million customers signed up for Voice Signature and, by the end of 2011, had used it more than 11 million times.

“We first launched this system for a limited number of subscribers,” said Fahri Arkan, Turkcell Global Bilgi assistant general manager of information technologies. “But it attracted more attention than we had expected and reached two million users in a short time.”

Multiple Channels with a Single Persona

When they start to see the benefits of natural language and biometric technologies on the phone, enterprises quickly realize the need to extend those benefits across multiple channels, particularly to their mobile apps. With mobile penetration at 100 percent of the population in countries such as the United States, most customer care calls now originate from cell phones.

Smartphone apps such as Siri on the iPhone are rapidly making consumers and business users comfortable with the concept of asking a device – rather than a live agent – for information. Hosted IVR systems enable enterprises to leverage that familiarity by making it fast and affordable to extend conversational interaction to their mobile apps.

In theory, skyrocketing smartphone adoption should mean more people using text to interact with enterprises and other organizations. But in practice, many people are turned off by the chore of pecking out passwords and other information even on the largest smartphones. By extending technologies such as voice biometrics and natural language to their mobile apps, companies can provide their customers with a way to avoid those hassles. Those organizations also are maximizing their investments in those technologies because their effectiveness is spread across multiple channels.

Sometimes these benefits go in the other direction: An organization implements an IVR solution for mobile and then extends it to other channels. A hosted solution makes that expansion faster and more affordable compared to purchasing, installing, integrating and maintaining on-premises hardware and software. And regardless of which direction the expansion goes, a hosted solution also provides on-demand scalability, so the organization can dynamically accommodate customer demand for the new communication options.

Conclusion: Convenience, Not Complexity

Today’s IVR systems are far more complex than they were just a few years ago. That shouldn’t be surprising, considering how much more they can do and how much friendlier they are than their predecessors. Today’s IVR systems are personalized, understand caller’s speaking naturally and even have sophisticated algorithms to work around problems such as crosstalk and background noise so callers don’t have to repeat themselves.

A hosted solution provides the benefits that this complexity enables, but without saddling enterprises with the learning curve, specialized staff and overhead costs that come with complexity. Instead, organizations are free to focus on their core competencies rather than the nuances of next-generation IVR technologies.

Cloud-based IVR solutions enable organizations to stay ahead of the competition by providing immediate access to technologies that address customers’ continually evolving communications expectations and preferences. And when customers suddenly embrace those new options, a hosted solution also can scale up quickly and cost-effectively to meet that demand.

US Airways is just one example of a company benefiting from hosted IVR’s advancements. Will your organization be next?

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About Andrea Mocherman

This was a contributed post by Andrea Mocherman. To see more content like this, visit the Customer experience section of our blog.