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How Your IVR is Costing You and How to Stop It

  • Written by Michael Meyer

meyer michaelDo you cringe when you have to push a button on an IVR? I know I do. So does everyone else. Do you still have an old traditional push button (push “1” for this or push “2” for that) IVR system hanging around handling or routing most of your inbound calls, or maybe taking a few payments? If so, it’s time to reevaluate it and consider upgrading or replacing it entirely with a newer, more customer friendly and capable system. You are probably thinking, “Why should I replace it? It has worked well for me all of these years and it probably will last a few more.” There are plenty of good reasons that you want to do this now. Some of those reasons are compliance related like Reg. E, the flexibility of changes and even the cost of those changes. However, the real reason is it is costing you more money than you realize. Let’s explore and discover the reasons why. You might have noticed that larger companies replaced these push button IVRs years ago. They are now on their second or maybe the third generation of the new IVRs. Why did they do that? You know why. The voice IVR sounds more natural, it does more, it is more flexible, it can be changed faster and it has a lower cost to operate.

The Critical Reason

Those are all essential reasons but not the critical one that drove the change. The real reason they made the change was to enable customers to self-serve themselves and get answers to their questions faster, more accurately and without waiting. Also, these changes mean those companies no longer need an employee in a call center or store to stop what they were doing to answer the same question for the umpteenth time that day. Because of the newer technology, you need less staff to do the same amount of work. Plus the new solution can quickly scale up as you grow. This also frees your existing staff to learn and perform functions that are more valuable. The potential cost savings in having less or redeploying existing staff is pretty significant now and into the future, no matter how small or mid-sized your company is. If making customers happy and saving money isn’t enough, then there is yet another perspective that will compel you to make the switch: climbing client expectations.

Expectation Escalation

If a new or existing client wants to experience what their customers will experience when contacting you and hears your archaic IVR, let’s face it, it’s not exactly what you want them to hear. So, what do you do? The first thing is to figure out what you want and need the new IVR to do. This is by far the hardest part because we are not used to laying out how we want a call to go or what routes the call should follow. I can tell you that mapping out each step of the call flow is by far the most valuable aspect of an existing or new IVR upgrade. Don’t skip this step! This will allow you to optimize what your IVR is doing in detail which is important because you might be paying for its usage by the minute, by each function that a customer chooses, paying a fixed or sliding percent of each payment or a combination of all of these. You can start this process by looking at what your existing IVR does (or doesn’t) and really looking at the IVR report.

As an example, can you see where people are pushing zero or hanging up? Can you see how many people are stopping at making a payment or how many try three or four times to enter information in before they zero out and take out their frustrations on your agents? Have you heard any feedback, good or bad, from your agents who take IVR calls? All of these are great places to start when deciding what the next version or generation of your IVR should do, how it needs to treat customers and how it must perform financially. Said another way, the more effective you make your IVR, the less you will pay in fees and the less your agents will have to work – which saves payroll. It really does not do you any good to spend time designing or buying a new IVR that ends up causing more than 90% of your customers to zero out and talk with an agent. That is just wasting money to say you have the latest toy and not doing the right thing for your customers or your business.

How to Measure Functionality

To help you get on the right track, here are two high-level measures to help you determine how your center and IVR are functioning. The first measure is called call deflection. Call deflection measures how many or what percentage of your overall calls were deflected away from human agents and handled by the IVR or an alternate non-human channel? As an example, out of 100 inbound calls or contacts, 50 were handled by agents, the IVR handled 30 and then the website handled 20. So you need to decide what you want these numbers to look like from an employee cost, technology cost and a client performance basis. Once you determine what the optimal ratio is for your business, you know what your overall design strategy should be. The second measure is call containment. This gives you an indication of how much work your IVR is really doing for you. This measure shows what percent of the calls that went to the IVR were handled entirely by the IVR from beginning to end without human assistance. Once you know this number, you need to take steps to improve it.

The bottom line with these numbers is that you might be wasting money on both sides of the equation (on the IVR and with agent’s time) and not even realizing it. This is why it is so essential to holistically and completely flow out the entire call process into and out of the IVR and not just look at the IVR as its own square box. When you do flow this call process out and look at the reports of what is happening in your current IVR, you will learn a lot and probably be surprised about what your customers are or more likely aren’t experiencing every day.

Melding and molding IVR technology with humans isn’t the easiest of things to get right. Most of us take many tries to make it work with lots of mistakes along the way. This is one of those things that is easy to say but hard to do right. So, take it one step at a time, play with it, make it fun and in the end your customers, employees and bank account will be glad you did!


Michael Meyer is the Chief Risk and Security Officer at MRS BPO, LLC