The Telephone as Marketing Media

The Telephone as Marketing Media

William Meisel, President, TMA Associates and Publisher/Editor, Speech Recognition Update

(Adapted from a March 2002 editorial note)

Today’s telephone speech recognition and text-to-speech applications generally fit into two categories:

	Replacement of existing telephone services that were done with touch-tone or with agents; or
	Extension of services available over the Web or through other sources to the telephone.

In both cases, the applications are obvious, and the contribution is cost-saving automation, more responsive customer service, or broader availability—particularly when mobile—of the service.

A focus on familiar applications makes sense in the early stages of a new technology. First, buyers understand the application and can estimate the benefits quantitatively. Second, callers are familiar with the service and have an easier time dealing with a new user interface than if everything were new.

Unfortunately, the familiarity of the applications makes advanced speech technology seem merely an enhancement rather than a fundamental new opportunity. By contrast, the Internet was viewed as a critical new technology for companies to address at the highest level. (The enthusiasm rose to extremes, but nevertheless reflected a real opportunity.)

The Web did more than extend existing applications. For example, information that might otherwise be delivered as a paper document is much more accessible as multiple Web pages with links. Finding information on specific products or services is fairly easy with Web-search engines. Many customers use the Web as a primary source of product comparisons and sources, and many buy online. Does the telephone voice user interface have similar applications that constitute truly new opportunities?

Conversational marketing

This editorial suggests one category of such applications. The telephone with speech recognition should be viewed as a new media, one which addresses a number of marketing issues that experts have highlighted in research and books. I will refer to this opportunity as conversational marketing. Conversational marketing is a systematic attempt to make the most effective use of every customer call by involving the customer in a dialog which advances the organization’s objectives.

Most current call-center applications fit into this framework by improving the customer experience relative to touch-tone or a long wait for an agent, but don’t generally attempt to integrate the applications with other company marketing. Today’s applications are generally targeted more at shortening the customer interaction for cost reduction, rather than making the most of the call.

The problem

A number of marketing writers and researchers have noted important changes in the marketing environment:

• Dilution of marketing channels: There are more ways to reach the customers, including many more television channels, targeted magazines, and the Web. Customers are deluged with marketing messages. Seth Godin and Don Peppers, in Permission Marketing, 1999, refer to “the attention crisis in America…It’s just physically impossible for you to pay attention to everything that marketers want you to.”

• Resistance to “interrupt” marketing: Customers are less responsive to classical advertising that interrupts what they are doing to present a message—e.g., TV or magazine ads and Web banner ads or pop-up ads. Digital Video Recorders, which can fast-forward through an advertisement, compound this problem.

• Tailored marketing: The desire to make marketing more relevant to the consumer’s general or short-term interests.

• The need for marketing messages to entertain: As consumers get more jaded, the marketing message must compete for their attention. Yet, at times, the marketing message is lost in the entertainment.

• The need to retain customers as well as get new ones: Studies have show that companies can boost profits 25%-85% by retaining 5% more customers (“Zero Defections: Quality Comes to Services,” Frederick F. Reichheld and W. Earl Sasser, Jr., Harvard Business Review, September–October 1990). Part of marketing should be keeping customers who are having problems, as reflected in many call-center and technical-support calls.

The power of dialog

One way in which marketing experts have summarized new marketing trends is by saying that companies need to hold a “dialog” or “conversation” with their customers. For example:

• “One-sided bombardment is replaced by dialog.” (The New Marketing Era, Paul Postma, McGraw-Hill, 1999)

• “Markets are conversations… Companies can now communicate with their markets directly. If they blow it, it could be their last chance.” (Christopher Locke, The Cluetrain Manifesto, Perseus Publishing, 2001)

Interestingly enough, these references to “dialog” or “conversation” never include speech technology. At one extreme, they refer to very slow dialog: targeted direct marketing by mail, and the customer replying to an offer. A faster dialog is customer interaction with Web sites; but, in this case, experience shows that a customer must be sold within about three pages of interaction, or their interest drops rapidly.

Obviously, speech recognition systems support dialog, and the nature of speech is that it can support many turns back and forth within a conversation without losing the caller. Customer information garnered from multiple calls by one customer (identified, e.g., by an account number) can be accumulated and reflected in the dialog. Even if the caller’s interests are unknown to the system prior to the call, speech dialog can support finding out the caller’s interests and preferences even within one call.

Callers can even relate to an automated “persona,” as speech vendors have been calling the implied personality of the automated system. Some companies have given their automated systems an identity, e.g., Bell Canada’s “Emily” and Amtrak’s “Julie.”

Dialog with customer service representatives (CSRs) can be effective precisely because dialog can be so efficient at determining the customer’s needs quickly. Unfortunately, much of the time agents spend in dialog is getting information that doesn’t require a person—information that is easily gathered by a speech recognition or speaker verification system, such as account numbers, validating identity, or the product the customer is inquiring about. Because they spend so much time simulating a speech recognition system, there is a high agent turnover and boredom can often lead to uneven customer service. Speech recognition which preserves the more interesting parts of a conversation for agents contributes directly to agents being more effective in conversational marketing and makes it more economically feasible for them to do so.

Making the most of a call

The cost, however, of handling every call with an agent tends to lead to an objective of keeping the call short. Yet, a call to a company or information service is an unparalleled opportunity to further the company’s relationship with the caller. When a caller phones an automated system, they are usually interested in a product or need help with a product. They are volunteering their time (a criterion of “permission marketing,” to use a current term). The customer should have an experience with the company that (1) is of interest at that time to the customer, based on what they say; (2) solidifies the relationship with the customer by entertaining, informing, or helping them; and (3) extends the relationship, potentially making a sale during the call or getting permission for further contact (e.g., by sending information through email).

A well-designed speech recognition system contributes to conversational marketing in almost all cases where it replaces an unfriendly touch-tone interface. At this level, conversational marketing is a matter of good voice user interface (VUI), persona design, and system design. Fortunately, we are seeing more of this enlightened style.

The telephone as media

Good design alone, however, barely addresses the full opportunity. Exploiting the full potential of conversational marketing requires new applications designed for that purpose. Those applications involve significant creativity, including the involvement of people who specialize in marketing (such as marketing departments and ad agencies). Ideally, marketers should view the telephone as a distinct media, like print, TV, or the Web. Every call should be considered a marketing event, and marketing in other media can easily be integrated with telephone marketing, as is done when a toll-free number is included in an ad.

Achieving the full potential of conversational marketing will take time. First, some good examples are required in order for marketing executives to understand the expanding potential of the telephone. Those first few examples will probably require a careful collaboration of marketing and VUI experts, along with careful integration with supporting database systems. The long-term growth of conversational marketing will probably require the development of tools that don’t require an expert on dialog design or programming.

The full power of conversational marketing using speech technology requires the integration of many functions within an organization—the call center, Web management, information technology, technical support, and marketing. That won’t happen easily without top management recognizing the need for a corporate telephone strategy, just as many corporations have a Web strategy.

Currently, most telephone speech applications replicate what is being done less efficiently and less flexibly by other means. Conversational marketing takes telephone speech recognition into a more unique realm. It unifies existing applications and puts them into a more strategic context. Conversational marketing has the potential to make the telephone a central part of a company’s marketing plan and merits attention at the top ranks of companies.