September 2000

Customers, VoIP, And E-Business -- A Love Story

BY Tom Keating

In World War II, The Allies' superior communications and intelligence proved to be pivotal factors in their success. When the Allies captured Germany's Enigma machine and broke the code, the Allies were able to listen in on German communications, surely saving countless lives. This is yet another example of the power of communications. Now some industry pundits are pointing at VoIP as the next revolution in communications.

Already, VoIP is being utilized extensively by large corporations to save money on long distance calls (or faxes) to branch offices. 3Com's NBX 100, a VoIP business telephone system, has been making some in-roads into the enterprise market. ITSPs, such as Net2Phone and Deltathree, have had millions of VoIP minutes pass through their networks.

However, in the context of this article, I am not going to focus on VoIP technology utilized by ITSPs, VoIP gateways, enterprise VoIP phone systems, or even PC-to-PC VoIP phone calls. Instead, I am going to focus on how VoIP is going to affect the consumer and in turn, the success of any businesses that implements VoIP technology.

NOT YOUR FATHER'S WAY TO SHOP
Let me start by saying that I firmly believe that VoIP will change the way consumers conduct e-commerce transactions. For example, suppose you have an online trading account and are interested in buying some stock. You do some online research and discover a company you are not familiar with, but it has a good P/E ratio, and you think it might be a good buy. You'd like to speak with a stock broker to get a second opinion, but in order to do that you would have to call someone over the PSTN, traverse the IVR, wait in the ACD queue until someone answers, give the broker the stock ticker symbol, wait for the stock broker to enter the trading symbol into his computer, and finally wait for the stock broker to bring up the relevant information.

How could we simplify this process? The answer lies with VoIP technology. What if we take this same scenario, but instead of making a PSTN phone call to a broker, I just clicked on a button on the Web site to initiate a VoIP call to the broker? The broker would immediately see exactly what is on my Web browser even before he takes my VoIP call. The broker could then "push" Web pages to me and vice-versa. This scenario can certainly be extended to include cross-selling and up-selling of stocks. (Although I don't recommend acting on everything your broker suggests is a good stock to buy.)

A better example of where cross-selling and up-selling could be applied is CDNow or Amazon. If you are purchasing a book on Amazon or a CD from CDNow and would like more information, you could initiate a VoIP call to Amazon or CDNow. The call center agent could then recommend other music or books to purchase based on their database of customers with similar interests. The agent can push Web pages that contain a synopsis of a particular book or even push streaming audio of a piece of music, which may help close the sale. These are but a few examples of the potential for VoIP on the Internet.

WILL DSL KILL VoIP?
Someone recently told me that VoIP in the consumer-to-business market is a model that will not succeed. He argued that in the past the main issue was that homes had a single phone line that was tied up when connected to the Internet. In this scenario, VoIP would get around this problem by transmitting the voice call across the Internet. Still, he argued that VoIP suffers from latency and voice quality, which made him believe VoIP would not succeed.

He then reasoned that most homes now have a second phone line, which could be used for the consumer to call (with much better voice quality) a company with which the consumer wished to do business. He added that with DSL taking off, which allows for both voice and data to coexist on the same pair of copper, VoIP calls initiated via the Web to businesses was no longer necessary. In essence, he maintained that DSL would kill VoIP.

I disagree wholeheartedly and here's why: When I wish to make a purchase online, I am increasingly impatient with Web sites that do not provide a means of contact if I have a question. I demand good customer service, and I'm sure I am not alone. If I don't get it, I am just a single click away from going somewhere else on the Web to get what I want.

When I am at the computer, my attention is focused on what is on the screen, and my hands are on my keyboard and mouse. In a way, they are held hostage by the keyboard and mouse. I don't want to have to leave the keyboard, get up, or reach over to grab my phone, and then dial an 800 number, traverse an IVR system, enter my account number, then wait on hold, then explain to the agent what I want to buy.

VOICE QUALITY BE DAMNED!
I'd be willing to endure some latency or break-ups in a VoIP call if I could quickly and easily reach an agent who is qualified to answer my questions when surfing the Web. (I should point out that with bigger pipes coming from DSL and broadband, latency and voice quality will become less of an issue.) An added advantage of a VoIP call is that when you click on a button to initiate a VoIP call, you are already "qualified lead" and can be routed to an appropriate agent depending on what Web page you are currently on, what IP address you are calling from, what information you filled out on a form, what cookies are set in your browser, and so forth. The agent will be able to see exactly why I am calling even before he or she answers the VoIP call. PSTN, eat your heart out!

What companies doing business on the Internet have to realize is that people are shopping online because they need the instant gratification. They are so demanding that they won't even make a phone call. When I am on the Web and in an impulse-buying mood, I want it here and now. The easier a company makes it for me to buy something, the more I am apt to buy something and the better the chance I will return to their Web site for future business. Remember what I said in the beginning of this column -- communications is the cornerstone of any successful business. The more "touch points" you give the customer, the easier it is for the customer to reach you, and the more likely the company will close a sale. Some people prefer communicating via the phone, others via e-mail, still others prefer fax or voice mail. VoIP will soon become yet another choice for consumers to communicate. It's only a matter of time.

IT'S EASIER (AND CHEAPER) THAN YOU THINK
Another complaint I hear about VoIP is that it's too expensive to implement or that businesses do not have the internal expertise to implement a VoIP solution. Fortunately, several companies have taken the ASP-model and have taken most of the complexity of integrating VoIP into a company's phone system out of the equation. For instance, both Lipstream and HearMe require only a few lines of HTML code to VoIP-enable your Web site!

There are several companies that offer free PC-to-phone dialing across the Internet, such as CallRewards, Dialpad, MediaRing, Pagoo, PhoneFree, and Visitalk. Microsoft's MSN Messenger software can now be added to the list as well, thanks to a partership with Net2Phone. Right now, most of these companies simply connect a PC to a regular phone number (PC-to-phone). Their business model is usually based on some form of advertising to generate revenue.

I predict in the near future that these companies are also going to follow the ASP model and offer to VoIP-enable a business's Web site for a nominal fee. When they do, this will certainly help make VoIP deployment within the consumer-to-business marketplace much more widespread.

MORE VoIP APPLICATIONS
I should mention two other interesting companies that utilize VoIP as one of their core components. The first company is called PipeLive.com, which transforms a conventional Web site into a multimedia contact center. The PipeLive system enables a company to consolidate its Internet chat, e-mail, VoIP, and telephone-based contact points into a single customer-contact environment. These real-time requests are routed by PipeLive's ACD system, using the same business rules applied to calls arriving to your PBX for simplified routing. PipeLive Multimedia Representatives interact with your Website visitors through live text chat, page delivery, form sharing and voice over IP all from a common interface.

A second company called Telephony@Work, visited our offices and demonstrated their CallCenter@nywhere product, which lets ASPs set up e-commerce and interaction center applications for enterprises. CallCenter@nywhere gets its name from the fact that it can route interactions from anywhere (phone, fax, Web chat, or VoIP) to agents residing anywhere, whether they are located in a centralized call center, branch office, or telecommuting at home.

CallCenter@nywhere was designed to eliminate the need for programmers, which eliminates the need for months of systems integration to get the call center up and running. In fact, programmers are not required for any aspect of system configuration or administration, including IVR scripts, skills-based call routing, and multimedia queuing. Using a simple Q&A type session over the phone, an ASP can have a new client's call center up and running in a matter of hours. ASPs running CallCenter@nywhere use a simple graphical user interface to configure every aspect of their client's call center, including skills-based call routing, IVR menus, faxes, VoIP calls, Web callback, Web chat, and outbound dialing.

In this increasingly Internet-centric society, where customers can change their loyalties at the click of a mouse button, companies have to do more to differentiate themselves from their competitors. Customer service and improved customer interaction capabilities are going to be the key to retaining customers and ensuring the success of any business. The fact that a VoIP call not only tracks the voice portion of the call, but the entire customer experience will be advantageous in helping the customer, and in turn keeping that customer.

JUST A LITTLE BIT OF HISTORY REPEATING
VoIP has its shortcomings with latency and voice quality issues, but those are getting better all the time. I would argue that the convenience of being able to communicate with someone quickly and easily outweighs VoIP's drawbacks. If we go back in time about 25 years, CB radios were not the most reliable form of communication; they were half-duplex and their sound quality was not very good. Nevertheless, they became a necessity for any truck driver or police officer.

Now, I'd like to quote something from a Western Union internal memo dated 1876: "This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." Western Union, a pro-telegraph company employing high-paid telegraphers at the time, thought that the telephone was just a fad. Well, as we know the telephone has long outlived many inventions. It was hardly a fad. Similarly, I think the VoIP naysayers will also be proved wrong. When making a decision such as this, I prefer to err on the side of easier and better communications -- history has already proven me right. 

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