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Can Mobile and IVR Avoid a Fight?
Customer interaction technologies should support one another, not compete
For the rest of the January 2012 issue of CRM magazine please click here
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While interactive voice response (IVR) systems have remained a staple for call centers, their use has been declining gradually with the emergence of other types of customer service, especially through applications that customers can access via their smartphones and other mobile devices.

In this climate, the call center is being relegated to a fallback position; customers try other options first and only place a call to a contact center when they really need to speak to a live person.

This trend is reflected in the many studies conducted during the past year or two that have indicated that consumers, when presented with the choice, would prefer to use a mobile application on their smartphone than interact with an IVR. The most recent, by SpeechCycle and Echo Research, found that half of all smartphone users would rather use a mobile customer service application to try to resolve their customer service issues before calling into a contact center, and 56 percent would be willing to use an app to avoid calling into a contact center altogether.

Mickey Ristroph, chief technology officer of mobile development firm Mutual Mobile, based in Austin, Texas, takes it even a step further. "Mobile will not completely replace an IVR or the Web, but it will become people's first choice," he says.

So it's no wonder, then, that mobile apps and IVR are often seen as competing products: in one corner, the young upstart, a quick and nimble smartphone app, and in the other, the slower, more seasoned IVR system.

But before the slugfest begins, companies need to rein in the competitive spirit between their mobile application and IVR development teams and have both start working together. The two platforms should not be entirely at odds with one another. A lot of the expertise from IVR development can be brought to bear as companies create mobile apps because, in the end, the goal of the IVR and the mobile app is the same: to provide companies with a cost-effective way of letting customers perform specific tasks on their own without having to involve expensive live agents.

And while acknowledging that adversarial undertones exist, most consultants point out that mobile and IVR applications have far more similarities than differences. Most would even say that the technologies converge in many ways.

"IVR and the mobile app are very complementary," says Scott Kolman, senior vice president of marketing at SpeechCycle, a firm that early last year launched a new mobile division that focuses exclusively on meeting the growing demand for customer care solutions on smartphones.

"They're both there to provide a service or solve a customer's problems," he says.

Not the Same

But that's where the similarities end, as any company that simply tries to mirror its IVR in a mobile application will soon find out.

"Just trying to port your IVR over to a mobile app is not going to work," says John Basso, chief information officer of Amadeus Consulting, a mobile app development firm based in Boulder, Colo.

The same also applies to the company Web site. "The biggest mistake you can make is thinking that you can shrink the whole thing down to fit on a mobile device," Basso says.

Customers are looking for a different experience, Ristroph adds. "They're not looking for a smaller version of the Web site. If that was what they wanted, they would have gone to the Web site."

In light of that, companies need to figure out what features make sense on a smartphone and will enhance their current offerings. In so doing, it's important to note that a customer using a mobile app is likely to be on the move and can't be burdened with a lot of clicks and button presses to get where she needs to be. And even though phone models are always improving, typing on a mobile phone is still difficult given the fact that many phones don't have keyboards, or, if they do, they're very small and hard to use.

This is why the new Apple iPhone 4S with the voice-enabled Siri Virtual Assistant is such a big deal. It accepts verbal commands and queries, understands context, and figures out which apps to use based on the type of query. Siri helps users make calls, send text messages or email, schedule meetings and reminders, make notes, search the Internet, find local businesses, get directions, and more, all with voice commands.

Bill Meisel, speech strategist and president of TMA Associates, a speech recognition and telephony consulting firm in Tarzana, Calif., is excited about the Siri application. "Given the market share of Apple's iPhone and the likely competitive response from other vendors, speech understanding is now a key and growing part of the user interface for mobile devices," he says. (In just the first weekend after its October 14 launch, Apple sold more than 4 million iPhone 4S models in the United States, Australia, Canada, France, Germany, Japan, and the United Kingdom.)

Graham Allen, director of product strategy and management at Convergys, predicts that the popularity of the new iPhone will spark interest in creating more voice-enabled mobile apps. "There's not going to be an immediate adoption, but it's something people will definitely be interested in. And as people get more and more familiar with voice as an interface, they will drive the push toward voice in more mobile apps," he says.

Make It Meaningful

As for other goals behind mobile application development, companies need to have them laid out well in advance, and then put them into context. "If you're just looking to be out there because you think it's cool, don't expect much more than that from your customers," warns Laura Bramschreiber, senior director of creative business solutions at West Interactive.

Goal number one has to be to provide value for the customer. "There has to be a compelling reason for the customer to download a mobile app, like being able to do things with it that he can't do in any other channel," Bramschreiber explains.

That's a big problem. Most apps are built "for entertainment or information, not customer care," Kolman laments. "This is a new channel for most people."

And as companies fumble through it in the early stages, a big mistake they make is incorporating advertising messages into their mobile apps. Allen says that's a waste of time. "If they downloaded your app, they're already a customer. You don't need to sell to them."

Mobile apps are quickly becoming a key to building and maintaining customer satisfaction and retention. "Over the long term, mobile can engender customer loyalty because the user really has control," Bramschreiber states. "Customers want to be in control of their engagement experiences with the companies they do business with. That's the perception with mobile because it's something they have on their device that they chose to download."

But that, by itself, is not a sure sign of success. "A lot of people download an app, use it once or twice, and they don't see a value in it so they don't go back," Allen says. "There needs to be a draw to have people come back to an app."

For Kolman, the value from a mobile app comes in many forms:

  • giving customers access to the things they need and doing so in an intuitive, easy-to-use interface;
  • providing relevant information or services;
  • taking advantage of the visual interface of a mobile device to push pictures, maps, and instructional videos to customers; and
  • understanding what people are looking to do over the channel and letting them do it.

"If they see a value in it, they will use it. If they see it simply as a way for the company to drive down costs, they will not use it. I, as a consumer, don't care about that," he adds.

Cost Considerations

That's not to say companies shouldn't weigh the costs and benefits of a mobile app. Certainly a well-designed mobile application can lead to moderate savings in the form of call deflection and self-service containment. In some industries, like banking and travel, about 60 percent of the calls that come into an IVR or contact center are made with mobile phones, so the potential is enormous.

And then there is a sales element as well. Analyst firm Gartner predicts that by 2015, companies will generate at least half of their Web sales via their social presence and mobile applications.

It's hard to compare costs between customers using a mobile app and those dialing into an IVR because so many interactions today are blended, with the customer starting on a mobile app and then moving to the IVR, or vice versa.

Some costs are easier to quantify. Though often less expensive than Web and IVR development, a really good mobile app can cost anywhere from $25,000 to $200,000 or $300,000 to build, depending on the content, the number of features and functions offered, the layers of security that have to be built in, the number of platforms and operating systems to be supported, the number of input modalities available, and many other factors.

Ristroph, therefore, suggests companies start small and add more features and capabilities later on. "You don't want to take a million-dollar jump all at once," he says.

Companies can derive additional value by using the mobile and IVR applications to cross-promote one another. They can, for example, use their IVRs to educate customers about new mobile care channels, drive faster adoption, and create better customer experiences, Bramschreiber points out.

Nuance Communications in mid-September unveiled a product that does just that. Nuance Call Intercept is designed to steer smartphone users to a company's mobile application when appropriate. When a caller dials into a company's service line, Nuance's patented Call Intercept application automatically detects if that caller has the company's mobile application installed on his smartphone and offers to take him there instead of continuing with the phone call. "Instead of the phone ringing, Call Intercept takes the call and suggests that the caller goes to the mobile app on his phone," explains Robert Gary, vice president and general manager of mobile enterprise applications at Nuance. "Prior to transferring the call, it gives the user a prompt, and can then launch the mobile app."

The application does not look at the caller's intent, so the mobile app might not be appropriate in particular cases. In those instances, the caller can opt to continue to the company's automated telephone self-service application or transfer to an agent.

Call Intercept is perfect for customer transactions that generate a large number of calls, Gary says. For companies, the benefits of using Call Intercept include call-deflection, self-service containment, and better routing results, he adds.

Tuning Is a Must

Just as any IVR constantly needs to be tested and tuned, continual maintenance and upgrades will be necessary with mobile apps as well, so budget and plan accordingly, the experts warn. Without the proper resources in place, a mobile app "can create supportability nightmares," Ristroph says.

It becomes more of a challenge because mobile operating systems, devices, and networks are constantly changing. "There are very few cases where an app is network- or carrier-dependent," but there is variability in the platforms they use, Ristroph says. Even the switch from 3G to 4G could cause havoc for some mobile apps.

Ristroph and others recommend building apps for Apple's iOS and Google's Android because they are the most widely used platforms today, and then developing code that can be shared across platforms. Basic application design and functionality accounts for between 80 and 90 percent of the coding, while platform-specific elements make up about 10 to 20 percent of the work.

"Luckily, the mobile space is more open standards-based, while many IVRs are still proprietary," Amadeus Consulting's Basso notes, but that doesn't negate the likelihood of compatibility issues. "Your app may not work from one day to the next through no fault of your own," he adds. "Any new release has the potential to break your code."

On top of that, an organization implementing or updating a mobile app will need to look at its internal systems and staff. A mobile app "has to either fit in or augment the existing infrastructure to be cost-effective and worth the effort," Convergys's Allen notes. "You have to look at the impact on your own IT personnel and resources, not just on the customer."

So who should manage the mobile app and be responsible for its upkeep? Ristroph says it depends on the size of the company. "The biggest and most successful companies are creating positions and departments around it, making strong organizational commitments to it," he says. "If you can do it, [mobile] is definitely something you want to dedicate staff for, but it can also be shared among a lot of other groups or units."

In entering the mobile space, companies also need to be aware of the current restrictions. One of the biggest is a limited reach. Mobile apps can only be used by people with smartphones, which, despite their growing popularity (about 300 million were sold last year alone), still only account for between 35 and 40 percent of the total mobile phone market. Percentages are higher for well-to-do Americans; 59 percent of U.S. adults with annual incomes in excess of $75,000 have them.

An Argument for Agents

For certain issues, customers will want or need to talk to a live person. And then there are some people who are just more comfortable talking to a real person no matter how many options they have.

In the SpeechCycle/Echo Research study, 80 percent of respondents said having the option to speak with an agent is critical to their experience, even if they don't end up using it.

"People still want to talk to someone," Allen explains. "When they have a problem, they want to call in and talk to someone who understands."

It helps, therefore, to provide a way for users of the mobile app to transfer to a live person. And, as always, don't make the customer start all over again. There's probably no greater irritant than being brought to an IVR that asks whether callers want to speak English or Spanish or that asks them to enter their account number after they've already spent several minutes in the mobile app.

Another irritant is being forced to wait in a call queue after being transferred from a mobile app. To avoid that, many companies have had great success with virtual queuing and callback technologies.

One such firm is Bank Hapaolim, an Israeli financial services firm that early last year extended its smartphone customer service application suite to include a callback option using an add-on from Virtual Hold Technology.

Now, through a mobile app that they download to their phones, Bank Hapaolim customers can perform tasks like checking balances or transferring funds. They can also connect to the contact center and schedule callbacks, eliminating the need to wait on hold to speak with an agent. "By building the callback solution into the mobile app, the bank ensures a positive, consistent experience for customers who need to call them," says Eric Camulli, a vice president at Virtual Hold Technology.

Other capabilities to consider building into a transfer function within a mobile app include intelligent call routing that takes the caller to the most qualified agent based on the information already provided, dynamic menus based on customer preferences and entitlements, visual menus that take advantage of the phones' display screens, and interfaces that give users multiple input modalities, namely voice, text, and touch.

That will prove to be the greatest force for driving mobile apps forward.

"You'll see mobile apps get a lot better and more powerful in the next two to three years," Amadeus Consulting's Basso says. "Now a mobile app is a bonus, but it will become an expected feature in the future. Over time, customer expectations will move it from an option to a requirement."

Markets Made for Mobile

According to analysts and consultants, mobile applications can be particularly useful for outbound customer service in the automotive, financial services, healthcare, transportation, and utility industries. Below are some of the current and potential uses by industry:

Automotive: targeted new and used car sales offers, service and maintenance notifications, recall notices

Finance: loyalty program renewals and updates, early-stage debt collections, suspicious purchase alerts

Healthcare: appointment scheduling/reminders, prescription refills, insurance enrollments

Travel: flight delay and cancellation notifications, with an immediate option for rebooking, check-in and upgrade requests, travel policy reminders

Utilities: account updates, scheduled outage alerts, service disconnection warnings, bill payments

Making Mobile More Affordable

In a move to help mobile customers avoid being hit with huge overage charges, the biggest wireless carriers nationwide in mid-October agreed to start sending out free alert messages to customers before and after they reach their plans' monthly limits on voice, data, and text. They will also alert consumers about international roaming charges when traveling abroad. Wireless subscribers will receive these messages unless they opt out.

The carriers that have committed to sending out such notifications are AT&T, Verizon, Sprint/Nextel, T-Mobile, U.S. Cellular, Clearwire, Cellular One of Northeast Arizona, Cellcon, Illinois Valley Cellular, SouthernLinc, and Unicel. Together, these carriers cover roughly 97 percent of all U.S. mobile users.

The alert system is part of an agreement between the Federal Communications Commission (FCC) and CTIA, an industry association that represents the major carriers. It is included in the "Wireless Consumer Usage Notification Guidelines" issued October 17 in Washington, and will become a piece of the broader CTIA "Consumer Code for Wireless Service" that provides disclosures and practices for wireless service to individual consumers. By October 17, 2012, participating carriers will provide customers with at least two out of the four notifications for data, voice, text, and international roaming and with all of the alerts by April 17, 2013.

FCC Chairman Julius Genachowski said the plan addresses the "growing problem known as bill shock" by giving consumers "the information they need to save money on their monthly wireless bills."

Kathleen Grillo, senior vice president for federal regulatory affairs at Verizon, called the new standards "a win for consumers."

"For the first time, the industry has adopted a common standard for all wireless providers to expand usage-management tools for consumers," she said in a statement.

"Consumers have been telling us about 'bill shock' for a long time, and we've been pushing for reforms to crack down on the problem," added Parul Desai, policy counsel for the Consumers Union, in a statement. "Ultimately, this is about helping people protect their pocketbooks, so we applaud the FCC and the industry for this effort to do right by consumers."


News Editor Leonard Klie can be reached at lklie@infotoday.com.

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