March 2001

Meeting The Challenges Of Choice With IP Telephony

BY BENNETT KLEIN, COSMOCOM INC.

The pursuits of efficiency, productivity and cost reduction are driving businesses to an increasingly self-service mode. Many advances in technology enable self-service, and the Web revolution is one of the most powerful and dramatic movements in this direction. Businesses that succeed in the self-service era will be those that recognize that self-service alone is not enough. Sooner or later, customers need to speak with someone. While customers want multimedia options that define how they buy from or interact with an organization, the only service option customers want is excellence and consistency.

Choice adds challenge, however, since the Internet multiplies the ways in which customers can communicate with companies. It's tough for companies to pinpoint and plan for the exact medium from which the customer will choose to initiate contact. Multimedia customer service can be integrated via a variety of technologies -- hardware, software, servers, traditional PBXs and ACDs, and Web technologies such as chat and e-mail. This makes accurate capacity planning for a multimedia contact center challenging and necessitates a flexible technology platform to accommodate this unpredictable demand.

Online Support: Improving, But Not There Yet
Over the next five years, the growing acceptance of the Internet for doing business will lead the majority of enterprises to Web-enable their contact centers. This is a welcome trend, as online customer care is still a glaring inefficiency in many businesses -- whether they are pure-play Internet companies or "click and mortars." Consider the following statistics:

• Businesses lost $3.2 million in 1999 by failing to Web-enable their customer service operations (Datamonitor).
• Only eight percent of the 69,500 call centers in the U.S. are currently Web-enabled (Datamonitor).
• Less than 1 percent of all e-commerce sites offer live customer assistance (Datamonitor).
• Only 24 percent of e-commerce sites have instant messaging and only 28 percent even acknowledge that an e-mail inquiry was received (GartnerGroup).

Fortunately, the tide is expected to shift. Datamonitor predicts by 2003, 40 percent of all call centers in the U.S. will provide multimedia customer service, with the online customer support market growing from $150 million in 1998 to $2 billion by 2003. So if Forrester Research's forecast that online sales will escalate to $6.8 trillion by the year 2004 materializes, this growth is well-warranted.

One of the most important catalysts for successfully handling new requirements in the contact center is Internet Protocol (IP). IP in the call center is increasing, thanks to a host of benefits including cost-efficiency, flexibility and the ease of a common communications platform to handle both voice and Internet calls. Deploying IP networks also makes it possible for new providers to offer communications services, which was previously the domain of incumbent telephone companies.

IP can provide a robust, scalable and versatile platform for multimedia customer service. Voice over IP (VoIP) promises a simple mechanism for Web/call center interaction, reduction in voice costs and tighter integration of voice and data in the call center itself. IP-based automated call distribution (ACD) is another enabler experiencing rapid growth; Frost & Sullivan expects IP-ACD to be a $388 million market by 2006. Some of the benefits of IP-ACD include allowing customer contact centers to conduct all customer service activities (telephone calls, voice and video over the Internet, keyboard chat, voice mail, e-mail and all forms of collaboration) through all media (PC, regular phone, TV and wireless devices) with only an IP or Internet-based connection to the agents.

Personalized Service: Getting It Done
Smart businesses seek to make every type of interaction -- whether it's over the phone, in a chat or even via videoconference -- an opportunity to increase customer satisfaction and loyalty and boost revenue. Adopting an individualized, "have it your way" approach to each customer's challenge is an important criterion for success. At present, businesses wishing to offer their customers real-time, personalized service over the Web have four options.

Text chat. Perhaps the simplest to deploy; the visitor and an agent type messages to one another in real-time. Text chat is still popular, probably because many home-based Web surfers have only one phone line and no alternative method of communication with an agent when they are online. As VoIP, which a visitor with only one phone can use, becomes more dominant, text-based support is expected to drop off. Still, text chat is expected to remain popular in help desk settings, where an agent can "push" relevant documents that aid in problem solving to the customer.

Web callback. The agent calls the visitor on a separate phone line. Ovum Research estimates callback is likely to be the most popular communication method over the next two years.

Voice over IP. Here, the customer is connected to the agent using a voice connection from his or her multimedia PC. Conditions for accepting VoIP -- at least over some segments in the public Internet -- are close to being met. IDC projects that IP will grow to 2.7 billion minutes by 2004.

Video. A VoIP connection is made with the addition of a video image of the agent. Video contact is still in its nascent state, used primarily in enterprise Intranets for applications such as booths in bank branches that provide links to financial services experts. In these settings, two-way video contact can serve as a valuable catalyst for enhancing customer trust. Online, organizations are beginning to use one-way video over IP to offer a "real person" presence to customers. It can also allow a CSR to "show and tell" for more frequent sales of higher values.

VoIP: Catalyst For Cost Savings And Talent Retention In The Contact Center
Investments in real estate and technology are often the two biggest capital expenditures for a contact center. A recent report by Datamonitor examined the reasons to distribute CSRs to remote locations, and the contact center solutions available today that support such an alternative. The report stated, "the next logical step in a remote CSR implementation would be to combine the voice and data link to the headquarters infrastructure via a single connection and the utilization of VoIP packet-switching technology...a physical phone would not even be needed at the remote site as both voice and data would travel over the ISP or virtual private network IP connection." With the inroads of IP, the need to aggregate CSRs in one physical location becomes greatly diminished, if not eliminated.

Customer support, whether in a business or consumer environment, is a highly stressful occupation and historically has a high rate of employee turnover. With the cost of agents' labor typically hovering around 30 percent of call center expenses, giving CSRs the flexibility to work from home may prove to be a valuable tool for retention. In addition, these organizations can also tap talent across the globe, increasing the pool of available workers and creating a truly global customer service outfit. Looking ahead, IP-based, networked contact center environments will no longer be anomalies: Ovum Research predicts that by 2005, nearly 35 percent of call center seats will be network-based.

Here is an example. A franchise travel company currently supports 1,400 travel agents across 350 different sites with a single toll-free number and Web site. With IP-based automatic call distribution, the company's CRM software unites consumers, travel agents and employees, fusing online and offline business processes via its Web site, customer care center and network of traditional travel agencies located throughout North America. Customer leads are routed to the appropriate agent based on various criteria, including the franchise's geographic territory, product expertise, store hours and language skills.

Calls can come over on the PSTN, or over the Internet via chat, VoIP, e-mail and collaboration channels. Switching is accomplished via the managed IP backbone. The agents do not need or use telephones. They interface exclusively with their multimedia PCs, which are equipped with headsets. All calls are answered or originated from the agent PCs.

Supervisors, also located anywhere, can coach, monitor calls and interrupt when necessary. They can draw real-time reports and gain access to histograms, analysis and an abundance of decision-support information for effectively managing their globally located CSRs.

Business benefits to the travel agency include more qualified leads, accurate targeting, improved sales close ratios and superior customer loyalty, resulting in an estimated 20 percent increase in revenues annually. Finally, one deployment serves all 1,400 agents. Agents can work at home or be located in offices throughout the world, which makes it easier to support a 24-hour customer service environment.

Wait...What About Wireless?
Just when businesses are starting to get comfortable with the idea of Web-enabling the call center, along comes the m-commerce revolution. With 700,000 new mobile users added each day, wireless phones will soon surpass wireline phones in usage worldwide. GartnerGroup predicts 78 percent of mobile users will access online data in 2001 -- whether through phones or PDAs and pocket PCs outfitted with wireless modems. Extending its projections, GartnerGroup says that the worldwide value of consumer transactions initiated from a consumer's personal mobile device could reach $1.8 trillion by 2005.

The wireless point of contact is emerging as a critical piece in the overall communication cycle for customer sales and support. As the acceptance of the wireless Internet grows, businesses will need to employ the same live help technologies to capture critical customer information. Customers require the same attention regardless of how and when they choose to contact you. Customer service to mobile customers (m-care) is more than enabling a Web site with wireless applications protocol (WAP). Customers need caller-specific, live assistance.

Presently, customer support communications options in the wireless environment include self-service (through menu-based prompts), live help (through callback, inbound voice calls and e-mail call prompts) and e-mail messaging.

As wireless Web usage goes mainstream, companies that provide enhanced services via the wireless communication channel will realize great competitive advantages and better, more durable relationships with their customers. Value-added services enabled through wireless PDA or browser-based phones will be a key differentiator for companies in maintaining customer loyalty and influencing future purchases. It gives customers the ability to interact in any way they want, taking full advantage of the bandwidth opportunities that will come with third-generation wireless markets.

People still buy from people and still need live interaction with others. The real challenge for enterprises today is to find efficient, productive and cost-effective ways of providing multimedia live customer care -- ways that integrate and harmoniously blend self-service technology with the timeless value of live personal interaction.

Bennett Klein ([email protected]) is vice president, Global Marketing at CosmoCom Inc. CosmoCom (www.cosmocom.com), headquartered in Melville, New York, provides IP-based unified contact center solutions for both e-business and traditional brick-and-mortar enterprises.

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