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To lose a customer, please press...

Sun, 29th Aug 2004

LAST WEEK 'the UK's leading Orange dealer' texted me the offer of a free mobile upgrade. I phoned back - and got its IVR (interactive voice response) system.

Oh God. First a long promotion spiel, then four options to select from: 'If you are a pay-monthly contract customer whose phone is more than 11 months old and you would like to speak with a friendly upgrade adviser about upgrading to one of the new generation of colour camera phones entirely free of charge, press 1. If ...'

I pressed 2 - only to get a second level of recorded response: 'To enable us to give you information on our latest phones and tariffs, please state your name, your phone number and the expiry date of your contract so that...'

No - definitely not. Life's too short. I want to talk to a person, not be patronised by a machine. The company approached me - there's a limit to the amount of time and effort I'll spend even for a free offer. And I haven't thought about the contract for years. I haven't a clue about the details. That's their job!

This is a small example, but it sums up why IVR is the most hated management invention of modern times, despised by everyone including, no doubt, when they experience it from the other end, the managers who eagerly install it in their businesses. It is also one of the most misguided and counterproductive.

So how come managers are so keen to use it? The short answer is that they believe automation will cut the cost of providing service. By having customers auto-sort and filter calls as they come in, they think they can minimise the amount of expensive people-resource devoted to answering questions, and maximise the time they spend selling.

But the calculation is wrong in every respect. IVR is sold as an IT 'solution', and like any number of such 'solutions' the main thing it solves is the IT firms' need to make sales. Far from containing costs it generally raises them - and worsens service. Companies, and certainly customers, would be better off without it.

Let's go back to the beginning. What is the problem that IVR is supposed to be a solution to? The key issue in service is dealing with variety - amplified by the fact that the service is 'co-produced' in real time with the customer. My mobile query could have to do with any number of phone makes, types and tariffs, and I have no idea what my contract is. And I don't want a colour camera phone, I want a headset. Although I might check the tariff too while I'm about it.

It's impossible to sort calls according to all the possible variables - nor should you try. Arbitrary categories, as in this case, simply create confusion (what do I do if none of the options fits my query/queries?) or resistance (I'm buggered if I'm doing any more of this). In the first case the result is unnecessary work (I press any old button, explain my query to the wrong person who has to pass me to another), which means extra cost in the second, non-completion - I drop out. This means lost sales, which of course managers can't see.

All this happens because the menu options are invariably not designed according to demand - what matters to the customer - but according to supply - what matters to a remote marketing department. Using a device that customers hate is already courtroom evidence of a producer's rather than a customer's mentality.

The irony is that we both want the same thing: smooth service that helps me get most value out of my mobile phone. But you wouldn't know it, because the robotised menu sets up an artificial opposition between the two: it prevents me getting the service I require.

Computers are great at routine and hopeless at variety. People, on the other hand, are wonderful at variety and bored and demoralised by routine. So what does IVR do? With the utmost perversity, it uses both people and computers for what they are worst at. It is therefore not surprising that it irritates the hell out of customers too - a full house of dysfunctionality.

What matters to me is having my questions answered and my order taken in the shortest possible time, in one call. The best way for the company to do this is to reverse the usual thinking, get rid of the IVR filter and put its best 'upgrade advisers' on the frontline phones, where they belong.

For most companies, this is counterintuitive, because they are obsessed with people-costs. They measure people to death with activity measures like time to respond, call duration, numbers of calls a day. But these are unrelated to the purpose of the activity - in this case selling phones, accessories and minutes - and therefore offer no guidance on how to do it better.

Meanwhile, they ignore the other costs - for example, of non-completers (like me) and customers who consume extra resources by having to ring a sec ond or third time. These are often substantial.

Unlike computers, people can relate to customers and pick up on these things. They can report back and adjust the offering accordingly. By stopping callers dropping out, they increase chances of making a sale by answering their questions first time, they prevent unwanted follow-on calls. The first increases revenues, the second effectively increases capacity. And you can further reduce costs by ending the IVR contract that you no longer need.

So - select from the following options: if you want to improve service, increase sales and cut costs, press button one and delete your IVR...

There are no further options.

the Observer, 29 August 2004


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