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July 09, 2012

Fonolo Sings the Praises of Smartphone-based Customer Service

By Paula Bernier, Executive Editor, TMC

TMC (News - Alert) this year celebrates 30 years of covering customer interaction, which means it couldn’t be a better time to look at where we’ve been with customer service and where we’re going. We’re also rebranding and retooling our customer experience effort. In this installment of our CUSTOMER coverage, we talk with Shai Berger (News - Alert), co-founder and CEO of Fonolo.

What’s your professional background? How does it relate to the customer contact/customer service/customer management space?

Berger: I am a serial entrepreneur and my current start-up, Fonolo (News - Alert), is focused squarely at fixing the call center experience. We aimed at this problem because, firstly, we think there is a lot of room for improvement. (Ask anyone about call centers, and you'll get an earful about how the experience is broken.) Secondly, the call center market is very large and growing. (Companies spent over $7 billion on call center technology last year.) And, thirdly, we saw that the cloud computing trend and the smartphone were on a collision course with this market and would bring about major disruption and innovation. That's the most exciting place for an entrepreneur to be. Prior to Fonolo, my co-founder and I had no experience whatsoever in the call center world and I think that was a real advantage for us. Because we were able to approach the problems from a fresh perspective, we found new solutions and were able to translate that into market success.

We’re celebrating the 30-year anniversary of TMC’s Customer Interaction Solutions magazine. What has been the most important development in the past 30 years related to customer interactions? In the past decade? In the recent past?

Berger: My answer to all three is the smartphone. This device is rapidly becoming the first place people go for customer service. Let me clarify: Imagine that Bob, a typical under-30 consumer, needs to do something like change a reservation or track a package. He starts with his smartphone. If he has a dedicated app for that particular company, he goes there first. If not, he'll try their site through the mobile browser. If that doesn't work, he'll wait until he's at a desktop computer. And then, as a last resort, dial the company's directly. What this means is that the call center industry has the opportunity to put a much improved experience in front of Bob. By connecting the call center to the smartphone, we can finally fix the problems that have been plaguing the industry for decades. Specifically, we can replace the IVR with visual navigation; we can replace waiting on hold with a call back (while using the smartphone to give Bob feedback about where he is in line); and we can gather all the information the agent will need before the call. These fixes make for a better experience, but they also make for more efficient agents and shorter handle times. So the opportunity here is to get happier customers and lower costs. It's really the biggest opportunity the customer service space has ever seen.

How has the rise of IP-based networks impacted the call center? Customer interactions at large?

Berger: It's been a blessing and a curse. The blessing is that the low cost of IP-based long-distance calling enabled the explosion of offshore call centers in the 90s. The curse is that the resulting cost savings took the focus off of improving the experience or innovating technically. In other words, since agent time became suddenly cheaper, there was little incentive to see how agents could be more efficient. The bigger issue is that the industry never created a standard protocol for call centers to communicate, so the real potential of IP-based networks was never realized. Specifically, there is no standard for handling call-attached data. To put that in plain English: If an IVR collects information from a caller and then redirects the call to another call center, that information is often dropped. That means the agent has to repeat the question, which angers the caller and wastes time. Rather than embrace the open standards philosophy of the web, vendors in the call center space dug themselves deeper into proprietary trenches. Communication between call centers got cheaper but not smarter.

How is the rise of cloud computing impacting how businesses target, engage with, and deliver product/service/support to the customer?

Berger: I see the call center industry switching over to a cloud-based approach almost entirely within the next decade. The economics are simply too powerful to ignore: You get to replace capex with opex, outsource the expertise to maintain an IVR and ACD, and get a much faster upgrade cycle. Two years ago people said ‘Cloud-based call centers are only feasible if you have fewer than 10 agents.’ Now, they are saying that about 100 agents. Next year, the cut-off will be 1,000 agents. This is the same pattern we saw when Salesforce took over CRM. First it was just for small companies, then mid-size companies and now, everyone.


How is the widespread use of social networking technology impacting how businesses target, engage, and deliver to the customer?

Berger: Social media is nudging call centers to get their act together. For decades, companies have imposed an infuriating call center experience on their customers. Although well aware of the problem, companies haven’t done anything to improve this experience, because the cost was too high, relative to the negative impact. Two forces are changing the balance of that equation. Firstly, solutions like Fonolo are lowering the cost of fixing these problems. Secondly, a very vocal generation of consumers, empowered by social media, is raising the cost of not fixing them (through publicly shaming companies who give bad customer service). Platforms like Twitter (News - Alert) offer a quick and easy way to broadcast negative experiences to the world – messages that are permanently attached to a company’s reputation. Albeit reactive, this has created a new urgency for companies to fix the call center experience. Over the years there have been a number of attempts to leverage the shame factor to motivate companies to improve their phone-based customer service. Most commonly known is the venerable GetHuman project, which gathered an impressive notoriety. Fonolo has also implemented something to help nudge companies into 2012. Earlier this year we launched, a Twitter-based service to amplify and track the endless on hold with complaints broadcasted on Twitter. OnHoldWith cleverly filters tweets related to a particular industry or company.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. For more information on registering for ITEXPO click here.

Stay in touch with everything happening at ITEXPO. Follow us on Twitter.

Edited by Brooke Neuman
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