Ann All spoke with Suzette Bouzane Meadows, head of Contact Centers for Affiniti, a communications integrator that specializes in designing, implementing and managing intelligent communications solutions for private and public sector organizations. Affiniti is part of the KCOM Group, which provides a range of integrated IT and communications services to businesses, and Internet and telecommunications services to selected consumer markets, within the UK.
All: Your firm has projected that nearly 70 percent of contact centers' outbound calling costs will come from calls made to mobile phones by mid-2008. Is this figure just for Europe or is it global? How did Affiniti arrive at this figure?
Bouzane Meadows: We commissioned the research because we were seeing two trends when we were speaking to contact centers. One was that our customers in the UK were telling us that their costs for outbound dialing were going up because people were substituting their mobile phone for their primary phone, which had a definite impact on the cost of outbound calling. People, especially young people, are using their mobile as their primary number and some aren't even bothering with a landline. The second thing, on the inbound side, when we spent time with customers looking at how they could become more efficient in their inbound operations, it was clear after an analysis of inbound calls that many of them were calls that could have potentially been avoided. For example, you knew that they had placed an order a couple of days previous and they were ringing to check on the status, or they had made a loan application and were checking on the status of that.
We used a company called ContactBabel for the research. Every year, they do a state-of-the-industry report where they survey 3,600 contact centers, so they know the area very well. The companies that ContactBabel interviewed represent over 20 million outbound contacts per year. Respondents come from the financial services, retail, distribution, outsourcing, manufacturing, entertainment and utilities sectors.
They asked companies what percentage of the outbound calling they were doing was to mobile phones and how they saw that changing in the coming year. They also asked the average rate or tariff they were paying for mobile calls. Then they reviewed the volumes, and it was a matter of doing some simple math. That's where we came up with a figure of 68 percent. They told us that, at the moment, 19 percent of calls are being made to mobile phones. That's expected to rise to 28 percent by mid-next year. If you look at the tariff the companies are paying, the mobile phone charge was 8.2 pence per minute (approximately 16.5 cents U.S.), while the average cost for a call to a landline was 1.5 pence per minute (approximately 3 cents U.S.).
All: You suggest that sending text messages to customers will be one way to reduce these costs. Does this assume that text messages will reduce inbound call volume? Are there any other complementary cost-cutting strategies?
Bouzane Meadows: I see three different ways in which text messaging could reduce costs. One is that it is definitely cheaper to send a text message than to place a call to a mobile. Our respondents indicated that they pay an average of 5.1 pence per text. If you compare that to 8.2 pence per minute, a three-minute call is going to cost you nearly 25 pence, where you could have sent a text message for 5.1 pence. So there's nearly a five-times factor to consider there. Obviously, not all of those outbound calls can be replaced by a text message because not all communication is suitable to text, but certainly some of them can be.
The second area is that you can become more efficient in your inbound operations if you proactively inform customers of events or issues beforehand. You can prevent some calls. And it has the double effect of impressing (customers). They think, "Oh, they've let me know about my query, and I don't have to ring in." Examples there might be status updates of orders. Or if you've raised a fault with a company, they can provide a status update as the fault progresses. ContactBabel has research showing that if you look at an operating budget within a contact center, 60 percent of it is agent salaries. So if you are being efficient with an agent's time and preventing an inbound call, there are some significant cost savings there.
The third way that you can use text to reduce cost is in the whole area of reminders. If a client does not appear for an appointment, that costs a business money. It's a missed opportunity for the organization unless a punitive "no-show" policy is put into place. An SMS is a polite, unobtrusive way of delivering this reminder.
E-mail can be a complementary strategy. But I don't think it's as effective as SMS could be. There is a risk that it can be seen as spam. I think another advantage of a text message is that it pings at you and demands your immediate attention. Most people open text messages right away; there is an immediacy there.
All: You also believe that companies can use text messaging to drive sales and/or enhance customer relationships. Can you provide some examples of how this might work?
Bouzane Meadows: Many of the contact centers that we speak to hold a fair amount of information on their customers. In our opinion, databases should not just be passive repositories of information, they should provide active alerts when a circumstance for a customer changes. A mobile phone is a very personal device, providing the opportunity to send a highly personalized message.
For example, if an online banking account has been locked out due to the wrong password being entered, then a security alert could be sent to the account holder's mobile phone. Similarly, if the account has gone overdrawn, the account holder could be informed of this as well. I experienced this personally when I was logging onto my online bank account and locked myself out after three tries. The phone rang, so obviously something within the database had triggered an agent to call me and tell me what was happening. There's an example of something that could be done by text as well, if you wanted to do it in a more cost-effective way. The mobile phone is a personal device so it lends itself well to these types of security alerts. You want to make sure you are contacting the person for whom the message is intended. Aside from the banking sector, there is obvious appeal for the travel sector as well to provide updates on flights, trains and so on.
In a sales environment, an SMS message could be sent to an existing customer or to a potential customer with a unique reference number that can be used to obtain a special discount. Text messages could also be used to increase the effectiveness of an outbound telephony campaign. A person is sent a text message, asking if they are interested in a special offer, and asked to reply to that text with a "yes" if he or she is interested. The outbound agents would then only call the respondents who answered "yes" to the offer.
All: Do certain types of customer contacts lend themselves better than others to text messages?
Bouzane Meadows: Yes, definitely. There are two drawbacks to SMS: The mobile phone screen can only display a relatively small amount of information, and the responses sent back via SMS will also of necessity be brief. Text messaging does not lend itself easily to a "conversation." Simple responses can be received and acted upon, but if the matter is complicated, then chances are the recipient will want to speak to a person regarding the matter.
The best customer contacts are either related to proactive customer service - event driven communications, such as delivery notifications, overdrawn accounts, delays to travel - or one-way push marketing. Two-way interactive communication is possible if it is simple, such as a "yes" or "no" response to an offer.
All: Your research shows that currently just 3 percent of all outbound contact with customers occurs via text messaging. What are some challenges for companies that would like to increase that percentage?
Bouzane Meadows: The first and biggest challenge is that you are introducing a new communication channel into the contact center. We've seen with e-mail and the Web, that if this is done as a separate silo, it can get complicated. So you have a conversation with the customer happening via e-mail, a conversation happening on the phone and now SMS. How do you keep track of all of these streams of communication happening with the customer? The whole relationship is very important. So you need to ensure that your solution is integrated into the other channels. The obvious example is you send a text message to a customer with a special offer, and they reply back that they are interested. You might want to pick up on that and place a phone call to them. So in that case, it's very important that your voice and SMS channels are integrated.
A second obvious area, if you are looking at proactive content, that assumes that you have a good grasp on the types of calls you are receiving and the reasons why people are calling you. That may seem straightforward, but in many cases there is not a good understanding of that. There hasn't been an analysis to break down the call types so you have an understanding of where you can obviously make a difference. I'm constantly surprised by the number of people I talk to who haven't done this kind of groundwork.
I wouldn't see this as a channel of communication where the agent would be involved too much. The messages need to be fairly short and sharp. I can see replies being fed into a database, with agents following up with calls. But I can't see them conversing back and forth with a customer using text messages. I think that needs to be more automated.