What's Next: Service With a Smile. Really.

How technology ruined customer service--and how three start-ups plan to rescue it.

1 | 2 NEXT

Nothing makes me despair for the state of technology as much as the silicon-slick voice on the automated customer service phone line. You know, the one that commands you to press or say your account number, then leaves you hanging until a live agent comes on the line--and proceeds to ask for your account number. It's no better online, where after you've filled in screen after screen of personal data, the computer inevitably freezes before you're anywhere near completing your task. Technology, which has done so much to make nearly all aspects of business easier and more efficient, has made a complete mess of customer service.

According to a recent survey by the technology consultancy Gartner, two-thirds of customers who try to get service online give up and use the phone instead. Those voice menus, alas, don't do much better. A study taken earlier this year by Forrester Research concluded that 14 out of 15 automated voice-response systems deserved a flunking grade. Indeed, only 16% of callers felt "completely satisfied" after calling with a problem; 73% felt "customer rage," according to a survey by Customer Care Alliance.

My guess is that business historians will remember these days as a low point in the annals of how companies treat people. Yet despite the risk of alienating customers, businesses have little choice but to automate. It all comes down to the bottom line: A call involving a live agent is at least five times as expensive on average as one handled by a voice-response system, according to Gartner. So don't expect a new golden age of attentive, handholding service to emerge anytime soon.

What you can expect is (no surprise) a host of brand-new technologies that promise to save the day. I know it's easy to be skeptical, given the havoc that old technologies have wrought. But this time, the geeks may be on to something. Not only will these new approaches actually get many customers to like phone-based self-service, but, paradoxically, they'll also help customers get better access to human service. And growing businesses, which have historically been leaders in superior service, are at the heart of this nascent upswing.

Voice menus become weapons of mass aggravation when customers feel their needs don't fit neatly into any of the options. What if, say, you order a new silverware set that arrives with too many spoons and not enough forks? That problem will never appear in a voice-response menu. It's too specific, and so are countless other customer service requests--which leads to the dreaded "bailout," or the request to speak to a live agent. Studies show that once customers with complaints are transferred to an operator, there's a 50% chance they'll be transferred a second time--at which point there's a 30% likelihood that they'll opt never to do business with you again.

Enter ClickFox, an Atlanta-based start-up that is dedicated to bringing bailout numbers down by helping companies fine-tune their voice-response systems to meet their customers' needs. The company installs software that captures customers' movements through customer service systems, even tracking customers as they slip from a website interaction to a voice-response system to a live agent. Then the software analyzes the information to uncover trouble spots. "We reverse-engineer the data and create a map to identify where the system is not giving users the choices that are useful for them," says CEO Marco Pacelli. For example, ClickFox discovered that about 20% of one client's customers were bailing out of a voice-response system when the system asked for a Zip code to verify identity. As it turned out, some of the callers were business customers baffled as to whether they should enter their home or office Zip codes. Specifying a home Zip code solved the problem and reduced the bailout rate by about 20%.

According to one study, 37% of callers who reach an automated voice system press zero immediately, figuring they'll end up needing to speak to an agent anyway.

New technology will also enable companies to treat customers as individuals--even in highly mechanized environments. And not a moment too soon: According to a 2004 study by the market research firm Harris Interactive, 37% of people who reach an automated voice-response system press zero immediately. The reason, according to Mike Zirngibl, CEO of Angel.com, a voice-response system provider in McLean, Va., is that most callers have come to expect a generic menu that will force them to slog through multiple levels of choices only to end up needing to speak to an agent anyway. Angel's solution: Give different kinds of customers different menus that are suited to their likely needs. "If every caller hears the same menu, then the menu has to cover every reason that anyone would call; that makes things complicated," says Zirngibl. "Next-generation systems allow you to tap into customer information and personalize the call flow."

1 | 2 NEXT

Try a RISK-FREE Issue of Inc. Today!

Renew | Contact Us | Current Issue

Select Services