If history is any guide, as many as 88,000 callers will be ringing the toll-free hotlines at 1-800-Flowers this Valentines Day to make sure their chocolate and roses arrived on time. Managing call volumes that high is a challenge for any business, but in the gift and sentiment industry, where each transaction carries a high emotional attachment for the customer, efficient call turnaround is especially critical. Still, Lou Orsi, the retailers director of vendor relations and strategic projects, isnt worried. Hes got a secret weapon.

Thanks to the retailers customized, speech-enabled IVR (interactive voice response) application, customers simply speak their order numbers into the phone, follow the prompts, and receive fully automated status updates.

According to Orsi, handling simple status calls in such an efficient way has not only allowed 1-800-Flowers to increase its order volume, it has also improved customer satisfaction. "Just a few years ago, customers would be on the phone with a live agent at 1-800-Flowers for an average of four to five minutes per call. Today that number is down to a little more than one minute per call, What it does for us as a business is it allows our folks to focus on sales calls or other customer service-oriented calls that need more personal attention," he says.

A unique confluence of technological improvements in recent years is allowing a growing number of companies to realize the benefits of speech technologies for customer and employee self-service. Improvement in speech recognition, the advent of VoIP, and the emergence of sophisticated voice portals, in contrast to the inherent limitations of touch-tone menu options, are leading to wholly automated IVR apps with which customers can conduct end-to-end business transactions, such as ordering tickets or making reservations.


"We believe [speech] is ready for successful deployment and offering clear, tangible benefits today," says Gartner analyst Bern Elliot. Meanwhile, the industry outlook is promising. According to Daniel Hong of the industry analysis firm Datamonitor, the global market for speech-enabled IVR is worth about $1 billion and is expected to double by 2009.

Heeding the call

Companies have long tried to reduce their dependency on live call-center representatives by deploying IVR systems based on touch-tone menus. But as the number of options grew unwieldy, these systems became cumbersome and increased the likelihood that customers would tune out and seek help from a live operator.

On the other hand, although perhaps awkward for inexperienced callers, interfaces that recognize speech are more flexible and easier to navigate.

Consider the number of options a customer might have to navigate on a consumer appliance manufacturers service line, for example. Just giving the customer the option to say refrigerator and be directed to the appropriate department can reduce call times significantly.

"The companies that we see adopting speech, as opposed to Touch-Tone, are companies that really care about their brand and really care about customer loyalty," says Azita Martin, vice president of marketing at speech vendor TuVox. According to Martin, speech-enabled interfaces often appear first in highly competitive markets, where customer service becomes a key differentiator.

Data entry is another application in which speech far outshines touch-tone IVR. For example, United Airlines recently unveiled a completely automated system for ordering tickets on the phone. Such an application would have been impossible to deploy using touch-tone dialing alone.

Customer service isnt the only application for these features; they can be equally valuable for employee self-service. BNSF Railway, for example, deployed an IVR system from Nuance to gather arrival, departure, and freight information from train conductors in the field. The system currently processes approximately 600 calls per day, according to BNSF director of network support systems Shannon McGovern.

Speech technology allowed BNSF to deploy an automated system that would be immediately familiar to its conductors, who were accustomed to dealing with live agents. It also meant that BNSF did not need to invest in any new technology on the trains themselves beyond the cell phones and radios that were already there.

"In my opinion, we saved literally millions of dollars, between what we would have spent on equipment and also on implementation and training costs," McGovern says.

Testing, testing...

Speech-enabled IVR applications can be highly effective at reducing call center costs, but they require continual monitoring by employees or contractors with expertise in the field. Its a mistake to assume that someone who is proficient in building and monitoring Web apps is the going to be skilled at maintaining a viable VUI (voice user interface).

"Just like if you were building a Web site that would deliver customer service and be an expression of the brand for a company, you wouldnt just have anyone do it," observes Nuances Mahoney.

"If you go in thinking that an IVR is just like a Web page, you will lose, because VUIs are very different than GUIs," says Jeff Fried, CTO of IVR testing and monitoring company Empirix."For one thing, according to Fried, speech is inherently more timing-sensitive than Web interactions."

"A slow Web page is much more tolerable than a slow IVR," Fried says.

Another classic problem is what Fried calls an incomplete implementation. In these cases, customers might hear different voices at different prompts, or find themselves dumped into a certain menu level with no apparent way to escape. Still other systems might prompt users for an account number or other information, only to have them recite it all again to a live operator.

The key, according to Fried, is to thoroughly test any speech application before its deployed to catch these problem cases before the customer does. "Even a simple IVR -- with, lets say, 20 different states -- to get good coverage you may need a thousand different tests," he says.

The testing isnt over when the application is deployed. Speech applications must be continually monitored and live calls should be analyzed to determine whether the software is meeting its stated objectives.

"Thats when youre going to be able to increase adoption and increase automation in the application," says TuVoxs Martin, "by understanding where people actually opt for automation, and particularly, understanding where they opt out and why."

Call center in a box

Fortunately, not every speech application demands a costly development and testing cycle. Some are fairly straightforward; for example, internal phone directory and routing systems. "A directory is more of a packaged application," says Nuances Mahoney. "Thats something that can be installed, maintained, and configured typically by the channel you purchased it from. There really is no application design to that."

Even when faced with considerable custom development, however, companies have options beyond hiring expensive VUI-design specialists. Vendors such as Nuance and TuVox have begun offering sophisticated, higher-level development tools than were previously available. And recently, the industry has seen the emergence of more open speech-enabled systems, known as voice portals, which make speech applications more accessible to technically proficient customers.

Traditional speech applications have been built on proprietary IVR platforms from the likes of Avaya, Cisco, Genesys, InnerVoice, and Nortel. The voice portal architecture, by contrast, allows general-purpose application servers such as BEA WebLogic and IBM WebSphere to interact with speech technologies through a Voice XML interpreter. Among other benefits, this allows companies to use their existing in-house programming talent to develop speech applications.

There really are significant benefits to using this architecture in terms of flexibility and reusability, says Gartners Elliot. We see the voice portal shipments representing slightly more than half of new port shipment sales in 2006.

Still another option is to go the completely managed route. The advent of VoIP has made it possible for vendors to offer fully hosted call center automation applications, including shared-infrastructure environments that can be had for a fraction of the cost of building out a system in-house.

"We decided to use the hosted model because for us to build this monster, for really three weeks out of the year, didnt make financial sense for us. Lets face it, when are we really getting taxed with order status calls? Those are really during Valentines Day and Mothers Day and these really huge holidays," says Lou Orsi of 1-800-Flowers, whose order status application is hosted and managed by TuVox.

Pick up the phone

Whatever size or scope of speech applications a company might decide to deploy, its important to bear in mind that its success or failure will reflect on the company and its brand. Speech is something that very much impacts your business: your customer service, your revenue. "Its unfair to say that only IT people should get involved in it. Its going to involve very much the business side of it, just like Web sites do," TuVoxs Martin says.

As is the case with Web applications, developing IVR applications requires a coordinated effort from multiple areas of the business. A gradual approach is advisable. In fact, most systems in the real world today typically employ a combination of speech and touch-tone technologies. Theres no reason to replace a working, efficient touch-tone application with a speech system. Still, according to Gartners Elliot, companies are increasingly recognizing that speech technologies can help them automate key phone-based tasks.

"Most enterprises today, when they purchase systems, want them capable of doing speech, but they are not necessarily deploying them with speech, " Gartners Elliot says. "What that means is that speech is clearly an important planning item, even if they're not actually deploying it."

Moreover, this trend illustrates that companies are aware of the value of voice-response applications to their businesses. Automating those mundane telephone tasks will be key to creating efficiencies in customer service, because no matter how widely accepted Web-based self-service has become, phone contact isnt going away.

According to Orsi, phone sales still account for a solid 35 percent of 1-800-Flowers business. For the companys other, more catalog-oriented brands, the figure is even higher.

"In most companies, the vast majority of customer service inquiries come in over the phone," says Peter Mahoney, vice president of worldwide marketing at speech vendor Nuance. "Obviously the Web is critical for delivering information and customer service, but its just not always the most convenient channel and the one that people are most comfortable with."

"In the early days of e-commerce, companies tried to avoid having phone access, says Empirixs Fried. In the early days of Yahoo they tried having no call center and it just didnt work. People do expect to be able to call."