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Debunking Common Myths about Automated Voice Messaging
The key to AVM success is overcoming misplaced skepticism.
Posted Oct 23, 2007
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Despite the prevalence of automated voice messaging, some organizations must still devote time to overcoming concerns about how an AVM solution can be more effective than live agents or a predictive dialer. These concerns typically center around three common myths:
  • AVM shouldn't be the dominant contact strategy since many customers don't like automation;
  • In collections, AVM only works on fresh and low-balance debt; and
  • The predictive dialer is more efficient and cost-effective.
The purpose of this article is to dispel each of these myths, and arm businesses with the information needed to fully leverage AVM as an integral component of their customer contact strategies. Myth #1: AVM Shouldn't Be the Dominant Contact Strategy Research suggests that AVM is growing in acceptance thanks to the increased use of the technology overall, and particularly among members of Generation X and Generation Y, who are even more comfortable with innovation. The fact is that a number of growing and robust organizations already use AVM as their dominant contact strategy and have effectively shelved or replaced existing on-premise dialing solutions. They've run extremely disciplined head-to-head tests to measure response rates and to challenge this myth. So, what do these people know that others do not? First, some who believe in the myth fear that customers will quickly hang up on automation. However, of the people who do hang up on AVM, many -- if not all -- would also do so during the awkward pause a predictive dialer creates when connecting a caller to the contact center. In addition, although manual or predictive dialing may create more live conversations, only a small fraction of those involve the right parties who are willing and able to take action. By nature of the opt-in conversation via AVM, a significantly higher proportion are valuable contacts, which tends to cancel out the delta in the number of live conversations. Second, sophisticated strategies and the use of data can influence customer responsiveness. Collections agencies using AVM as their dominant strategy utilize many different scripts, with different voices and options. Plus, they've analyzed data to uncover the best days (and times of day) to reach their customers, while also understanding which device to contact--home phone, business line, or cell.
Finally, AVM can demonstrate how many people "respond" by tracking Direct Connect Rates. The connect rates can be as high as 35 percent, depending on the customer group and application. The main point is that most businesses are pleasantly surprised by how many people respond. Even if the connect rate is low, predictive dialing is not doing any better, while AVM is able to eliminate all the wasted effort and wrong-party contacts. Myth #2: AVM Only Works on Low-Balance or Fresh Collections Debt Within collections, AVM is generating successes with all types and ages of debt. For instance, a leading player in the collection of federal debt, including student loans, uses AVM as a supplement to manual dialing to generate more right-party contacts (RPCs) for its agents. Balances range broadly from a few thousand dollars to tens of thousands of dollars, and the outstanding debt typically ranges in age from 1 year old to 15 years old. AVM has helped that agency generate approximately 3,500 more RPCs per month than would be possible with manual dialing alone. That's the equivalent of 20 collectors achieving an average of 8.5 RPCs per day. Assuming that 20 percent of the RPCs make an average payment of $600, the agency estimates that AVM helps to generate an additional $420,000 in gross collections each month. That's only one example of AVM success on older, high-balance debt. A recent study conducted at a large, third-party agency analyzed connect rates across balances ranging from $50 to over $5,000. Interestingly, the connect rates were relatively flat, revealing that balance size is not nearly as much a driver of connect rates as age. Myth #3: My Dialer is More Efficient and Cost-Effective There are a host of reasons why an on-premise dialer solution is inferior to on on-demand AVM solution -- the most compelling being that predictive dialing does not maximize agent productivity. Agents spend more time talking to wrong parties than right parties. As a result, a business needs more agents -- its most significant expense item. Dialers also lack the dialing capacity and answering-machine detection accuracy of AVM, further limiting their ability to maximize agent productivity. Particularly for harder-to-reach customers/debtors, significant dialing capacity is required in order to make a single right-party contact. The capacity advantage allows for increased penetration rates, as needed, due to increased volume, a spike in attrition, or a desire for more contacts. Second, there are numerous advantages of an on-demand, multitenant AVM solution versus an on-premise dialer. The former provides flexibility with enterprise access, rules, and visibility, plus every client receives the latest upgrades, multiple times per year. Time is saved--there's no installation, maintenance, or upgrade time needed from the technology staff. And finally, with no hardware or software to buy there is significant cost savings. On-premise dialing solutions simply cannot offer the same type of efficiency and flexibility. Automated voice messaging is breaking down barriers and dispelling myths across the lifecycle of customer contact. The key to success is finding the right mix of contact strategies for your specific operation. Old habits are hard to break, and jumping to an AVM-only strategy overnight isn't likely. But those who've stopped believing the age-old myths and opened their minds to deliberate testing and measurement of an AVM-dominated contact strategy have proven that it can and should be implemented to optimize efficiency and effectiveness within the contact center. About the Author Matt Edmunds (medmunds@soundbite.com) is vice president of industry marketing and analytics for SoundBite Communications.
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