IVR CRM Integration. Migrating the Call Center from Cost Center to Profit. Definitions. Rod Arends Cheryl Yaeger BenchMark Consulting International

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1 IVR CRM Integration Migrating the Call Center from Cost Center to Profit Rod Arends Cheryl Yaeger BenchMark Consulting International Today, more institutions are seeking ways to change their call center mission from a cost center to a profit center. This change can be achieved by incorporating up-selling and cross-selling into the list of call center functions. In order to fully leverage the many customer contact points within a call center, it is necessary to invest in leading edge technologies to truly realize the benefits of anticipating and reacting to the customer s needs and wants. Institutions will derive greater customer satisfaction, higher retention rates, and more successful attempts at upselling and cross-selling by providing tailored, accurate and timely responses to the customers needs. As these benefits are realized, the call center will become a profit center. This article will outline the technologies and applications available in today s call center technology arena, and will explain the proper use and functionality of these technologies. Definitions Interactive Voice Response Interactive voice response (IVR) is synonymous with voice response unit (VRU). The primary function is to provide customers with the ability to access automated information within the organization. The system provides directed call vectoring to provide the caller a path to the desired information based on the options selected or responses made by the customer. If the customer s request cannot be serviced in an automated fashion, then the IVR will provide a path to a live agent in an associated call center. The desire within a well functioning IVR system is to design the menus and options based on historical customer choices, to provide a significant opportunity for the majority of calls to successfully terminate within the IVR. This avoids the costliest call transaction of all, the introduction of a live agent to service the customer s request. Proper menu design is key to providing the best customer experience. The menus should be designed to allow a quick targeting of the customer s desired information. There should be few layers with a short number of options per menu. Again, the menu options and their order should be based on empirical analysis of previous menu option selections made, and take into account any external events or changes within the institution that will likely increase the number of inbound calls. Customer Relationship Management Customer relationship management (CRM) is usually defined as a tracking or data analysis tool used to determine a customer s Copyright BenchMark Consulting International, NA, Inc. All Rights Reserved.

2 preference in choosing available products or services. It is generally used more in sales management rather than actual data mining. The most effective use of CRM is to utilize the customer s historical relationship and transaction data to drive anticipated menu options or customer service responses within the call center. The properly designed system should provide anticipatory reactions based on the customer s predicted needs or wants. This will have the effect of providing targeted sales opportunities during the service call and seamless service to the customer, thereby improving the customer experience in dealing with the institution s call center function. Current IVR Environment Today s IVR environment in a typical call center involves calls being routed directly to the IVR from the public telephone switch. Once the call arrives, the customer will be presented with menus and must select an option that will further direct the call. Menus tend to contain many options and several layers. If the organization typically processes complex transactions, this process can be very confusing and frustrating for the customer. The programming language that is used for directing calls within an IVR and for access to other systems for information retrieval is usually proprietary and does not allow any of the code to be shared between systems. This provides additional layers of complexity when a new system is introduced into the IVR environment as specific code must be written and maintained. Generally, real-time information can only be provided through a defined link to a legacy host system. The typical IVR will not contain dynamically defined menus or options based on the historical information. It will merely report back to the customer the desired information within the customer s defined query. If the customer has a question beyond the scope of the defined menu options, then it is likely that a costly live agent will become the final destination. Anticipatory service and upselling or cross-selling are virtually nonexistent in a typical IVR platform. The current IVR environment will only support the processing of voice communications. A completely separate communication channel must be built and maintained to support web access applications. This may cause issues for customers if they encounter a problem with a web application and contact a live agent in the call center for assistance, only to find that the application is unrelated to the call center and no help can be provided. Building Blocks of IVR CRM Integration Real Time Information One of the basic building blocks in constructing an integrated IVR CRM application is to provide system access to real time customer data and information. The system should be able to access enterprisewide data from any source within the organization. This will provide real time feedback and data mining capabilities resulting in the best anticipatory environment for likely menu options or agent scripts, based on the customer s prior history and transactions within the organization. Once access to real time information has been established, the next step is to provide a software environment that allows actions to be taken based on the real-time CRM information. This may involve conditional IVR scripts, where the customer s prior history of product choices or transactions will dictate the available menu options to be presented. The result is a better targeting of the customer s experience to provide a higher likelihood that the customer s needs and wants will be satisfied within the IVR application and will not involve the transfer to a live agent. Another application would be live agent scripting based on CRM information that would serve to prompt agents with likely desired products or services for up-selling or cross-selling opportunities. BenchMark Consulting International 2 IVR CRM Integration - October 2004

3 Technologies and System Architectures There are several technologies and system architecture aspects to consider when building an integrated IVR CRM system. The first technology is automated speech recognition (ASR). ASR software converts spoken dialog into text. This text can then be used within scripting to drive efficiencies in IVR scripts and enhance the customer s IVR experience by avoiding Dual Tone Multi-Frequency (DTMF) input. (DTMF assigns a specific two-tone frequency to each telephone key so that it can easily be identified by a microprocessor -synonymous with Touch Tone.) Another component of successful installations is building a tiered middleware network backbone. Middleware provides the environment for all data sources on the Internet Protocol (IP) network to be retrieved from any access or entry point within the network. This would include IVR scripts, call center agent desktop, web access, etc. The ideal middleware structure provides tiered architecture consisting of the following layers: Presentation This tier provides for the interaction of the customer to the application. It also collects and stores the input from the customer for use by other layers within the structure. Business Logic This tier provides validation of the input. It also determines the next action based on programmed business rules. Data Access This tier provides the standard interface to all legacy data sources on the network. Each of these tiers operates independently which allows maintenance changes to be made to one tier without disrupting other tiers. For example, customer interaction layer (IVR script) changes can be made without having to reprogram all other layers. An additional component of the IVR CRM platform is Voice XML. XML stands for Extensible Markup Language and is the most widely accepted platform independent standard for building structured documents for web applications. Voice XML is considered a dialect of XML. This version of XML provides a data exchange format for spoken dialog. The speech recognition software provides speech-to-text outcomes that can interact with any device on the organization s IP network. Customers can respond with spoken dialog that can then be converted to actionable queries directed at any legacy system within the organization s network. XML and Voice XML are text-based scripts that do not need to be precompiled, which provide the capability of writing applications that dynamically generate Voice XML scripts based on customer input. The result is onthe-spot personalization and customization of the customer s experience. As an example, assume that a bank s customer calls the IVR. The CRM determines that the customer has only a checking account relationship with the bank, so the only options presented back to the customer through the IVR are options related to checking accounts. The customer no longer has to listen to a multitude of frustrating and potentially confusing menus and options that are completely unrelated to the customer s relationship (savings, mutual funds, etc.). Another important type of XML is Call Control XML (CCXML). CCXML is the standard for providing telephony functionality to web-based applications, allowing customer input (speech or DTMF) to be acted on dynamically without following scripted IVR commands. When used in conjunction with VoiceXML, calls can be redirected based on dynamic events and do not follow a scripted path. CRM information can be returned from the IP network and customized menu options can be presented to the customer based on their previous relationship and transaction history. This feature provides an enhancement to the customer experience and also assists in increasing the number of calls successfully BenchMark Consulting International 3 IVR CRM Integration - October 2004

4 terminated within the IVR, avoiding costly live agent calls. As a foundation for building the network, the organization must provide IP addresses for all devices within the organization s network. IP addresses provide a uniquely identifiable address for an unlimited number of devices. The IP network allows any device with a valid IP address to interact with any other device on the network. An IP network allows all of the devices on the network to be accessed from any phone line. As this network is developed, it is important to remember that it should be built to support real-time communication. It should also be noted that this type of network is becoming increasingly complex to build and maintain as wireless devices are becoming more prevalent. The next building block of an IVR CRM platform is to provide Sessions Initiation Protocol (SIP). The purpose of SIP is to provide a communication session between any two endpoints in an IP network, regardless of type of media or device. The software provides for the detection of the type of media device and adjusts the type of communication to match that device. This software allows for various methods of accessing and retrieving data within the network. Some examples include: IVR, agent desktop, PDA, etc. Another important part of the platform is Speech Application Language Tags (SALT). SALT supports speech as a web navigation method that allows users to speak a phrase instead of entering a URL to get to the desired site within an IP network. This software will become increasingly important as more customers begin accessing the network through the use of wireless devices (e.g., PDA s, pocket PC s, etc.). Top performing IVR CRM networks also incorporate Simple Object Application Protocol (SOAP). SOAP is designed to allow applications running on a decentralized, distributed environment to exchange information. It is used in the creation of web services allowing different vendor s components, running in remote data centers, to work cohesively as a single application. The final building block to be considered is IVR scripting. It is important to fully leverage the new IVR CRM capabilities by redesigning the current IVR scripts. Current IVR scripts must be updated to process VoiceXML dynamic outcomes. It is also important to understand the current traffic patterns and customer expectations within the IVR. Scripts and options may be altered to continually seek improvement in the rate at which calls are successfully terminated within the IVR while enhancing the customer s experience. Scripts will also need to be dynamic in providing menus and options tailored to the customer s anticipated needs based on real-time data returned through the CRM process. The following diagram depicts the typical high-level design of an integrated IVR CRM installation. This design assumes that the organization utilizes ASR for the interaction with all callers to the enterprise-wide IVR platform. The calls that are supported by the integrated IVR CRM platform are then directed to the Voice XML processor for handling. Calls that are not supported through the IVR CRM integrated platform such as branch location directions would continue to be serviced through the ASR IVR combination. This architecture would also provide for a phased approach as the new system is introduced to the organization. It should also be noted that the Voice XML and Call Control XML processors service both the web access and voice access pathways. This allows support and maintenance of a single system versus the current dual support mechanism of voice and web access. In this configuration, developers and programmers currently utilized to support only the web access applications can be jointly utilized to support both web and voice applications. BenchMark Consulting International 4 IVR CRM Integration - October 2004

5 Building the Engaged IVR CRM Application Fully Engaged IVR CRM Automatic Speech Recognition Software Interactive Voice Response System Voice XML Call Control XML Middleware Network Customer Web Access CRM Database Architecture: Single platform to service both voice and web access to customer service Includes use of SALT to allow speech as web navigation method Middleware network backbone utilizes SOAP to allow exchange of information between decentralized, distributed applications Challenges: Significant cost to implement Complex programming requiring well-defined user requirements Advantages: Organizations can utilize current web developers to write voice applications Allows real-time combination of business processes with unique customer knowledge to create and deliver personalized, anticipatory service System is completely open and scalable - acquisitions no longer present difficult conversion issues from acquired system to legacy system Legacy Host Systems BenchMark Consulting International 5 IVR CRM Integration - October 2004

6 Expected Outcomes and Benefits An engaged IVR CRM application allows organizations to proactively determine a customer s likely needs and present appropriate customized options in the IVR menu. In this scenario, the customer is not forced to experience the entire menu of options that do not apply. This type of platform also incorporates real-time, enterprise-wide knowledge of the customer s entire relationship to the organization. Only those items relevant to the customer s current relationship with the organization will be presented as options in an IVR script resulting in dynamic, personalized IVR scripts based on real-time customer information. The successful IVR CRM installation can also be leveraged to provide up-sell and cross-sell opportunities based on a real-time analysis of the customer s current relationship with the organization. Based on this information, scripts can be presented to a live agent s desktop for prompting discussion with the customer, or pre-recorded messages could be played through the IVR. Directed sales efforts based on real-time customer historic information will certainly pave the way for increased sales results through the call center, hence leading the migration from cost center to profit center. Successful integration is achieved by a blend of XML interpreting the customer s input (either spoken or Touch Tone), and then accessing the IP network to determine the customer s relationship. Knowledge is then returned to the IVR to provide a dynamic IVR script based on relationship knowledge of the customer. This system can also be programmed to provide likely up-sell or crosssell opportunities. As an example, a large US bank recently installed a CRM system that uses real-time analytical capabilities to increase its credit card business. The bank implemented a data analysis system that predicts which customers are most likely to respond to new incentives and keep card balances active. The system regularly analyzes the bank s credit card database and initiates first, second and third offers for new incentives. These offers reside in a database that is accessed by the call center when the customer makes contact. The bank reports that profitability has increased by almost $10 per customer. The acceptance of retention offers has increased by 33% since system installation. A fully integrated IVR CRM application will provide several quantifiable benefits. One of the key benefits will come in the form of reduced IVR to agent transfers. More calls will be terminated successfully within the IVR, while retaining the same if not better customer experience. A recent Purdue University call center study estimates the per transaction cost of an IVR ASR call at $0.45. In contrast, the average live agent call is estimated to have a per transaction cost of $4.00. Long distance carrier costs (associated with 800 number usages) are also likely to be reduced. A successful IVR CRM integration, including Automated Speech Recognition, will provide an environment where the average customer s call will be serviced faster. In a recent study by the Tower Group, it was estimated that the introduction of ASR could reduce average call length by 35%. The estimated ROI for a 100-seat call center is 12 months. For a larger center, this figure drops to 6 months or less. These results are achieved through the reduction in carrier costs and the decrease in costly live agent transfers. The implementation of an IP network, XML data exchange and communication protocols also provide benefits. This type of architecture provides a completely open, scalable system for future expansion. It also provides a system that is platform independent, meaning that any vendor device can become a part of the organization s IP network with minimal programming. BenchMark Consulting International 6 IVR CRM Integration - October 2004

7 The tiered architecture of the middleware network will allow programmers and developers to narrow their focus with regard to system updates and maintenance items without impacting other applications. For those calls transferred to a live agent, the middleware network backbone will provide easier access to any system within the network, which will provide faster agent query and response times. The benefits are increased one-call resolution and shorter liveagent calls, thereby providing additional gains in efficiency and effectiveness. Future Considerations Two future call center enhancing applications deserve mention. Natural Language Processing (NLP allows the user to speak in full sentences, while the application interprets the query. This is in contrast to the current speech recognition functionality requiring a directed response ( yes, no, or spoken menu option). NLP will also enhance customer experience by allowing a conversational tone during call interaction. Another future application is a part of ASR. The latest technology involves voiceprint authentication. This software stores a fingerprint of the customer s voice. When the customer calls the IVR, the system automatically identifies the customer based on their unique voiceprint and starts the CRM process of providing personalized, customized. service from the very beginning of the call transaction. The Tower Group estimates that voiceprint authentication is currently achieving an estimated hit rate of 90%. The addition of these two technologies to an integrated IVR CRM platform will further enhance the customer s experience, lead to increases in customer loyalty and retention, and provide an increase in one-call resolution without involving a costly live agent. Summary IVR CRM integration will become characteristic of high performing organizations as measured by customer loyalty and retention. This type of system allows organizations to optimize the customer s experience when contacting the call center for assistance. It also provides an environment for directed, customized service, while providing the organization with scripted upsell or cross-sell opportunities. It also provides an environment for decreasing costly live agent calls while increasing the overall customer experience by shortening the call transaction length and providing personalized menus and options. While installation and implementation will be costly, the payback will be achieved through increased customer retention, lower carrier costs, lower call center agent costs and greater customer satisfaction. BenchMark Consulting International 7 IVR CRM Integration - October 2004

8 Rod Arends is a consultant at BenchMark Consulting International with over 15 years of experience in inbound and outbound call center management and consulting. Arends specializes in telephony architecture, call center design, capacity analysis, staffing models, ACD routing, IVR scripting and associated business process design. Cheryl Yaeger is President of BenchMark Consulting International. Yaeger has extensive experience in the financial services industry with the delivery of large integrated change initiatives such as bank mergers and consolidations, technology integration activities and strategic alignment evaluation and adjustment. BenchMark Consulting International has specialized in improving the financial services industry since The company is a management consulting firm that improves the profitability of its financial services customers through the delivery of management decision making information and change management services to realize the benefits of business process changes. BenchMark Consulting International s expertise is in the designing, managing and measuring of operational processes. The firm has worked with 35 of the top 50 (in asset size) commercial banks, all 14 automobile captive finance corporations, several of the largest consumer finance corporations and many regional banks throughout the United States. Internationally, BenchMark Consulting International has worked with the five largest Canadian commercial banks, more than 20 European organizations in eight different countries, in addition to financial institutions in Latin America, Asia and Australia. The company is a wholly owned subsidiary of Fidelity Information Services, Inc., a provider of products, services and solutions to the real estate and financial services industries. BenchMark has dual headquarters in Atlanta, GA, and Munich, Germany. For more information please go to BenchMark Consulting International 3535 Piedmont Road, Suite 950 Atlanta, Georgia (404)