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Profits Soar When Airlines Listen
Airlines can focus on revenue-generating interactions by using speech-recognition technology to handle nonpurchase questions.
For the rest of the June 2000 issue of CRM magazine please click here
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"Airlines waited for voice recognition to develop to the point where it could be activated and not have a negative impact on customers."

In the airline industry, speech-recognition technology has advanced alongside Web applications to become the newest way to meet customer demands and foster one-to-one customer relationships while reducing customer interaction center costs and human resource needs. Allowing customers to speak their preferences instead of punching a keypad adds a human touch to interactions such as booking flights, changing itineraries and finding out about weather-related delays.

Speech-recognition technology is now being used to replace or augment traditional touch-tone systems and live agents in airline customer interaction centers, which handle tens of thousands of customer calls daily. Speech-enabled systems allow agents to focus on revenue-generating calls and calls from the most valuable customers--frequent flyers--rather than fielding nonrevenue generating calls during peak demand periods.

"Speech does provide a competitive advantage to airlines," says Mark Holdhouse, senior vice president of operations for SpeechWorks, a Boston-based software developer that began implementing speech technology for flight reservations systems in 1997.

In the complex, occasionally chaotic customer interaction centers used by airlines to handle customer needs, a few seconds shaved off each call can mean millions in cost savings annually. And, Holdhouse explains, initial customer reaction to the technology has been favorable. "It's friendly, efficient, customers know they won't have to wait and the service will be consistent from call to call. They know exactly how to get what they want from it."

Speech-recognition technology has been around for a number of years and is used commonly in banking transactions and stock trades, as well as in other industries. However, the technology has only recently infiltrated the airline industry. It can address customer interaction center problems specific to the airline industry, such as massive surges in calls during bad weather. Then, call center agents are so busy answering questions about delays and rescheduling already-purchased flights that they are unable to help customers who want to book new purchases. Long wait times during these peak call periods add to caller frustration and are often cited as a primary customer service complaint.

Kelly Hastings, a Chicago-based furniture industry executive for whom travel is 90 percent of the job, says he welcomes any technology that makes information easily accessible to businesspeople like him. His travel arrangements are made for him, but after he's reached his destination, it's up to him to check on standby availability, delays and itinerary changes.

"If I can call the airline from my cell phone without punching in numbers and arrange to take a more convenient flight or check on a possible delay using an automated system that I know will give me the information I need, that would be an asset to me," says Hastings. "I need information to be quick and accurate, and waiting for an agent to give me that information is rarely a quick and easy process."

Miles Ahead?
Airlines have been somewhat behind other industries, some say, in adapting speech-recognition technology to their customer service operations, but for good reason. With so much at stake, airline companies had to wait until the technology was perfected before debuting it to customers. Jean-Pierre Ferrada, an airline industry analyst who spent 12 years working in customer interaction center environments, nine with Delta Airlines and three with TWA, admits that compared to other industries, airlines have been slow to adopt speech technology, but not because they didn't see its advantages. When the technology first became available in the mid-1990s, airlines examined its possible pitfalls and limitations.

"Many airlines recognized the various problems that existed with voice-recognition technology when it first came out," says Ferrada, "and held off until those problems could be remedied." Initial problems, such as limited vocabulary and a lack of supporting infrastructures, were addressed quickly by software developers. Airlines began to test the technology internally, in applications such as crew scheduling and employee travel reservations, a time-consuming task that yields no real revenue.

"Airlines waited for voice recognition to develop to the point where it could be activated and not have a negative impact on customers," Ferrada says. "Once vocabularies were expanded and the accuracy level of the calls was satisfactory, airlines embraced the technology because it presents solutions. If they had not waited, they would have had to overcome negative perceptions of the product with customers, and that becomes nearly impossible to do effectively."

Ferrada explains that current voice-recognition software is highly advanced, able to recognize thousands of words as well as regional dialects and accents. These advances boosted call-completion success rates to acceptable levels. This type of technology allows airlines--which spend millions of dollars annually on long-distance minutes--to make their customer interaction centers more cost-effective. The agents become 5 to 10 percent more efficient and individual call times go down, saving potentially millions in long-distance minutes annually.

Testing the Speech-Technology Waters
Airlines first tested speech technology on applications that met certain criteria: a high volume of callers seeking transactions that had a small margin of variability and that could take place completely without an agent. Airline customer interaction centers typically handle millions of calls that don't involve the purchase of a ticket but rather field questions about weather conditions, flight arrival and departure times and gate assignments. These nonrevenue transactions are important to overall customer satisfaction, but they also drain agents of the time they could more profitably spend booking flights for paying customers or cross-selling airline services.

United Airlines first implemented a speech-recognition system to handle nonrevenue calls to the reservation desk reserved for their 415,000 employees, retirees and their family members. United estimates that more than half of all calls related to employee travel are currently handled exclusively by the speech-recognition system, freeing agents to deal with calls from outside, paying customers.

"We were handling approximately 1 to 1.5 million calls from employees last year," says Kate Fogarty, manager of reservations sales and operations for United. "The time spent handling employee calls not only creates a significant direct expense--several hundred thousand dollars--it also distracts us from focusing on our primary responsibility: servicing our revenue customers." United recently unveiled a speech-enabled flight information system for the general public that replaced its touch-tone system. The new flight information line gives customers access to the status of 2,400 daily flights. Like most other voice-recognition systems, it allows access to flight information even if a specific flight number is not known. All that callers have to say is where the flight is coming from, where it's landing and its approximate arrival time. Then they can obtain the flight number and status. American Airlines and others are currently working on similar systems of their own.

David Rich, manager of airlines and travel for Menlo Park, Calif.-based Nuance Communications, a maker of natural speech interface software, has worked with American Airlines and Northwest Airlines, among others, in developing speech-enabled reservations systems. American Airlines implemented a speech-recognition system to solve a specific dilemma for its valued frequent flyers.

"American's frequent flyer numbers are alphanumeric, so they are inherently difficult to punch in to a touch-tone system," Rich explains. "This is a prime example of how speech technology can solve specific problems."

American's customers can now access their accounts by speaking their frequent flyer numbers. The speech-recognition system allows them to access their mileage, as well as check upgrade availability, obtain gate departure information and inquire about delays.

Airlines believe that as more customers become accustomed to making flight arrangements--independent of an agent--and have success with it, they will more easily adapt to completing all types of transactions from beginning to end on an automated, speech-enabled system.

Speech-recognition technology capitalizes on the trend of online booking at airlines' Internet sites. "The airlines are beginning to attract people to their Web sites with pretty significant degrees of success," says SpeechWorks' Holdhouse. "Using speech-enabled systems is similar in that it encourages the general idea of getting customers to book travel and make all types of travel-related transactions themselves--and like it. Speech is 'friendlier' than online booking because you can do it anywhere, even from your cellular phone. And speaking is the most natural way of communicating anything."

Making the Systems Work
Implementing a voice-recognition system has three phases: planning, educating and deploying. The planning stage is most crucial, developers say, because without careful determination of what customers will specifically need from the system, companies risk a lower-than-expected call-completion rate when the system won't adequately address the customers' immediate concerns.

"The better you're able to get into the head of the person who's on the call, the better you'll be able to design and deploy the system," Holdhouse says. "It's amazing how many people don't think the system through adequately before they attempt to design it. You have to determine what just happened to make the customer pick up the phone at that particular time."

Matthew Gardiner, product manager for Cisco Systems, a San Jose, Calif., company that recently acquired GeoTel Communications, a developer of customer interaction center routing and management systems, says that when speech-recognition systems are well-designed to suit specific needs, they can become command centers for customer service operations. After initial installation times of 60 to 90 days, speech-recognition systems can be continually refined and enhanced to create even more sophisticated services.

"Systems such as these capture a lot of data about what's going on in the call center," Gardiner explains. "Most companies use this data quite religiously to refine what they're doing and determine how their customers are being handled when they are in a voice response unit. It's an ongoing process of perfecting the system."

Educating customers, employees and management about the capabilities of a voice-recognition system also is an ongoing process, Gardiner adds. When Cisco implements a voice-recognition system for a client, it assigns an engineer, an information technology specialist, a customer interaction center operations specialist and a telecommunications specialist to the project. It's also important for companies to involve their marketing and public relations representatives to ensure that employees and consumers learn about the systems, possibly by promotional offers and opportunities encouraging their use.

The Future of Speech
Industry experts believe that speech technology will become more prevalent and sophisticated. Personalization--the ability of the system to identify the caller, or more specifically, the value of the caller, before any transaction takes place--will become paramount. Customer identification will occur so quickly that by the time the call is picked up, the system will have already determined the flying frequency of the caller, the purpose of the call and the department or agent that can handle the call most efficiently. These technology systems can link customer interaction centers located across the country or manage call placement for a single center.

"These systems are going to know who you are," affirms SpeechWorks' Holdhouse. "They will be able to pick off, for instance, platinum level flyers and speed them through the system."

Voice-recognition systems that use frequent flyer numbers to identify callers have the capability to compile detailed databases on individual customer flying and buying habits and preferences. This will allow for better CRM because airlines will know more about individual customers and will know, for instance, how they prefer to communicate with the airline, whether it's via phone, e-mail or traditional mail.

Speech-recognition technology applications soon to debut include systems that give callers the ability to reconfirm flights, make a seat selection or request special meals. The new system will also be used for frequent flyer programs and allow customers to check their eligibility for an upgrade and to arrange for earned upgrades on the flight of their choice.

Airlines are also developing their own speech-recognition programs. For example, Delta Express has designed a system that helps callers find the least expensive flight available for their desired travel by telling the system the cities of origin and destination and approximate time of day the flight is desired. Continental Airlines plans to introduce a bilingual speech-recognition information line, and United Airlines has developed a speech-enabled system to assist flyers who have lost baggage.

Analyst Farrada says that the next major step airlines should take to provide customers one-stop travel shopping using speech-recognition systems involves integrating their services with hotel reservations systems and car rental companies. These systems will give a customer the ability to book airline, hotel and car reservations with a single telephone call--but without using a travel agent.

"The airlines actually have hooks into the car and hotel reservations systems already," he explains. "The airline that will shine in the future is going to see that this integration is possible and seize the opportunity to make it available to consumers. The first to market with this product will make a difference in their market share."

Northwest Airlines hopes that Farrada's prediction is accurate. Northwest plans to tie into a service already available on its Web site to offer hotel and car rental reservations through their soon-to-be introduced speech-interface technology.

Speaker verification is closely tied with voice-recognition technology and has major potential advantages for airlines. Vocal characteristics would verify a customer's identity and thereby help reduce credit card fraud in airfare purchases made using speech technology. Speaker-verification systems require callers to repeat their name three or more times and provide identifying information--such as a password--to establish an account. Customers can subsequently call in and the system will be able to identify their voices and call up a database of information, such as flying habits and personal preferences, in an attempt to speed service and foster the customer relationship. And the possible additions to such a system are unlimited. "As databases become well-developed, the system could even contact the customers, reminding them that they haven't yet booked their usual flight," Rich says. While speech-recognition systems hold advantages for airlines, their worth will be best proven by how well they are received and used by consumers. Advances in speech technology software will add to the possibilities of use, but only if customers are comfortable using the systems and get consistent, reliable results.

For this reason, Holdhouse explains, the bottom line for customer satisfaction is convenience, speed and accuracy. The systems will likely benefit merely because speaking one's preferences is more natural and fun than using the traditional touch-tone systems, he adds. "If you have a well-designed system that gives the customer what they need, they will choose to use it over an agent and over the touch-tone system. Given a choice of different ways to do something, people are going to choose what is most fun."

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