The speech analytics market hit its stride in 2010. Despite a weak economy, this technology sector has continued to pick up momentum and grow. The number of speech analytics implementations increased by 22 percent between 2009 and 2010, following growth rates in 2006, 2007, and 2008 of 39 percent, 50 percent, and 106 percent, respectively. New vendors continue to enter the market, and others have been bought by larger competitors to fill a void in their portfolio—all of which is to be expected of a vibrant technology segment.
DMG Consulting has been bullish on speech analytics since it first crossed into the commercial market back in 2004. Speech analytics was and continues to be compelling because:
- It addresses a real and measurable need
- It delivers quantifiable benefits
- It is not a replacement for something that came before it
- There is nothing else like it available in the market
- It can and is being used in conjunction with other solutions
- It improves the performance and benefits of other applications
On top of these benefits, speech analytics is highly compelling conceptually and engages the imagination. Initially sold primarily to contact centers because they "own" their company's call recordings, it is actually an enterprise application that delivers benefits to any and all customer-focused departments with the "guts" to use it. Speech analytics is expected to see growth outside of the contact center in the coming years.
The Impact of Social Media
Timing also plays an important role in the adoption of speech analytics. After years of paying lip service to the importance of listening to their customers, executives finally seem to be implementing systems to do just that.
Enterprises are becoming more interested in hearing what customers have to say about them. It would be nice if this were happening because senior executives realized the importance of their customers' opinions, but this does not appear to be the case. It is happening because of the power of social media.
Customers, and any other interested party for that matter, are no longer powerless. As long as an individual has access to the Internet, he can be heard. Enterprises can no longer afford to ignore customers' issues, as they did in the past, and are trying to figure out the best way to get ahead of the public conversation in order to avoid embarrassing situations. Speech analytics gives companies insights into customer needs and wants, and positions enterprises to use this information to identify and resolve issues on a timely basis so that they are not blindsided by unexpected issues. Speech analytics truly gives enterprises access to the voice of the customer in a well-organized and systematic manner.
Historical Versus Real-Time Speech Analytics
Today, speech analytics is predominantly used on a reactive basis, but in the future, it will be used in real time. Current best practice is to analyze recordings overnight to identify trends. Once issues surface, they are shared via dashboards and heat maps and passed on to the owner of the speech analytics solution. In the leading organizations, speech analytics is owned by an analytics team that works independently but cooperatively with all customer-facing and back-office departments that can be assessed using speech analytics.
Companies that have a need to identify issues on an intra-day basis generally use a phonetic speech analytics solution to analyze their calls a couple of times per day. This is rare, because it is difficult for organizations to respond quickly to identified issues, as the required actions are predominantly manual and take time to implement.
In the future, speech analytics will be conducted on a real-time basis and provide feeds into other applications that automate the outcomes. For example, speech analytics will be used in real time to identify and communicate the emotional state of a caller to the agent (or customer advocate) who has received the call, so that this individual knows how to interact most effectively with each and every caller. Speech analytics will also be used to rapidly identify whether a caller is open to hearing an upsell opportunity, or to suggest the best approach to collecting from a caller.
The challenge is that speech analytics will need to feed into a predictive analytics solution that can directly initiate the recommended action. This closed-loop process will ensure that speech analytics findings are used on a real-time basis. However, even when speech analytics is converted to a real-time application, there will still be value in identifying trends and regularly conducting post-mortem analyses.
Taking the Next Step
The big issue in the market today is making the insights from speech analytics actionable—having a plan that lets a company take action once an insight or issue is discovered. While a growing number of organizations have set in place a process for responding to speech analytics findings, too many are still concentrating on what they can find rather than what they need to do to fix the issues that surface.
Change management remains the key to a successful speech analytics implementation, and during 2010, the market saw a breakthrough in this area. A growing number of companies realized the importance of acting on their findings, and made organizational changes to position themselves to rapidly identify and address issues. This has had a positive impact on the perception of speech analytics, as an increasing number of implementations are now generating quantifiable benefits. However, for every successful speech analytics initiative, there are likely at least twice as many where companies are using speech analytics primarily for reporting, and are not realizing the expected return on investment.
What the Future Holds
Speech analytics is still very exciting and has great potential for its users. While it is maturing, and some of the applications have evolved enough to be considered second generation, it is still new. Companies are just beginning to figure out how speech analytics findings can enhance their performance, with customer insights and feedback that can be used to improve the customer experience, identify new product ideas, highlight operational/system/product/procedural issues, reduce operating costs, improve first contact resolution rates, and increase staff satisfaction, to mention just a few of the current applications.
The penetration rate for speech analytics in contact centers, as of the end of 2010, is 11.6 percent. This means that most companies are still not using this valuable solution. Enterprises that are willing to make the necessary investments to change how they do business can realize very significant benefits. Even companies that want to use this tool just to identify customer trends are finding it to be very helpful.
DMG expects speech analytics to continue to pick up momentum, particularly as best practices emerge to help companies succeed with their implementations. More vendors will incorporate speech analytics capabilities into their solutions, and the speech analytics providers are expected to continue to build out their functionality to enable their findings to be more actionable without having to feed them into other applications. Quality assurance will continue to evolve and improve over the next few years as speech analytics becomes a standard component of this essential business function.
Donna Fluss (email@example.com) is founder and president of DMG Consulting, a leading provider of contact center and analytics research, market analysis, and consulting.