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Statistically speaking, your borrowers don’t like your call center. They may tolerate it, but they don’t like it. More specifically, your call center’s interactive voice response (IVR) system is driving your customers crazy. And, as uncomfortable as it is to admit, that has probably always been the case.

On the flip side, your IVR provides significant savings for your company and eliminates countless hours of waiting on hold for your callers. In many ways, it just works. So, why bother investing in your IVR?

Here’s why: According to a Forrester Research survey, 73% of U.S. online consumers still use telephone customer service (Source: “Contact Centers Must Go Digital Or Die,” April 2015). Because the IVR touches the largest percentage of interactions, it also has the potential to create the biggest impact on both customer satisfaction and operational cost - both good and bad. Given this, optimizing the IVR experience has to be a top priority.

As servicers reconsider the IVR’s role in their customer service strategy, it’s time to think differently and to think big. In fact, our firm’s research shows 70% of financial services executives agree that an emphasis on cost cutting and efficiency has, at times, negatively affected the quality of customer experience.

If your customers’ expectations for self-service have changed, so should yours. Today, mortgage servicers need an IVR strategy that creates a stellar customer experience and serves as a foundation for your entire self-service strategy - not one that just cuts costs.

 

Customers dislike IVRs for what they do - and don’t do

Self-service is quickly becoming the preferred way that consumers want to interact. Why? In a word, convenience. Research shows 66% of consumers said self-service is generally more convenient. This number is even higher - 82% - among Generation X and millennial consumers (Source: 2013 Nuance Consumer Preference Survey).

Consumers have grown accustomed to getting what they want, when they want it, and on the device of their choice quickly and easily. However, although people prefer self-service and depend heavily on the phone for customer service, that doesn’t give companies a pass to keep using outdated, cumbersome IVRs. The widespread use of IVRs designed to “contain” callers has resulted in high dissatisfaction compared to other self-service channels.

It’s easy to see why a lot of IVRs get a bad rap. According to a study by New York University, an overwhelming majority (83%) of consumers feel that IVR systems provide either no benefit at all or only a cost-savings benefit for the company (Source: 2011 New York University Consumer Perception of Interactive Voice Response Systems Survey). Too often, they aggravate callers with confusing menu mazes, alienate them with impersonal radio-announcer voices and inundate them with requests for PINs and passwords that they can’t - and shouldn’t have to - remember.

Callers see IVRs as a barrier between them and what they want - instead of as a guide to the right answer right away. They don’t dislike IVRs for what they are, but because they are hindered by what IVRs do, and don’t do, today.

 

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Recognizing changes in consumer behaviors is critical to reinventing your IVR

The first step in reinventing your IVR is recognizing the key trends driving consumer expectations related to self-service and IVR. For instance, more than half of the adults in the U.S. and other countries now own a smartphone. And, American adults who own smartphones just can’t seem to separate themselves from their devices. According to a Harris Interactive survey, 72% of smartphone owners are within five feet of their devices the majority of the time (Source: 2013 Harris Interactive Mobile Consumer Habits Survey). These personal devices store everything from family photos, contacts, favorite restaurants and games to user IDs, passwords and communications history.

What’s more, they’ve gotten used to mobile apps that automatically incorporate contextual information, such as location, calendar, weather and time. The apps’ ability to intelligently combine this data reduces the hassles of typing and results in a highly tailored experience. With all of that intelligence at their fingertips, consumers now expect more intelligent interaction and context from IVRs. And, they expect it to be fast and easy.

“Easy” is the No. 1 consumer demand when it comes to customer service. Meet that demand and the payoff is huge. The Corporate Executive Board found that a 20% increase in simplicity results in a 96% increase in customer loyalty (Source: 2012 Corporate Executive Board survey of 7,000 consumers). At the same time, increased simplicity can result in consumers being 115% more likely to recommend those brands to others. In other words, consumers will reward companies that focus on simplicity - including those that streamline their IVR.

But, what is the definition of “easy”?

Because people are so crunched for time, “easy” often becomes synonymous with “fast.” Consider self-service grocery store checkouts. It may take a bit more physical effort to scan and bag your own groceries; however, if the alternative is waiting an extra five minutes for a clerk to do it, suddenly self-service becomes the easier option. Ditto for smartphone-enabled check-ins at airports and hotels. Think about what makes an IVR experience fast and easy for your borrowers. Would they prefer an IVR that starts like this: “Please listen carefully because our menu options have changed”? Or, would borrowers prefer an IVR that allows them to state, in their own words, the reason for the call and simply asks, “How may I help you?”

 

Putting the “service” back into mortgage servicing

Consumer preference and expectations for self-service have changed. What follows is a list of things servicers must do to meet these expectations.

1. Ditch the menu mazes and have a conversation: Human conversations rarely require participants to choose from complex lists and sub-lists of options. Neither should an IVR. Minimizing multi-level menu trees and unnatural conversation flows are both critical steps in reducing caller effort and delivering a more satisfying experience.

By leveraging natural language understanding (NLU), your IVR can enable a conversational interaction with callers. NLU allows callers to speak naturally instead of forcing them to respond to a barrage of questions and prompts. It also improves self-service performance. Real-world deployments show that with each IVR prompt, an average of 3% of callers will hang up or hit zero. This means that three consecutive caller prompts in the IVR could result in losing 9% of consumers. For most enterprises, even a 1% decrease in automation translates to hundreds of thousands of dollars in increased cost.

With NLU, your IVR can greet your caller with an open-ended question and allow him to respond conversationally. If a caller is able to say “I’d like to make my mortgage payment that was due last week,” it lessens the number of consumers who will hit zero and delivers a better experience.

2. Context means everything: IVRs that use contextual awareness can further reduce caller input and frustration. For example, when a borrower is already in the process of qualifying for a loan modification, the IVR should immediately provide the status of his request for assistance and then offer the opportunity to speak with the servicer’s single point of contact (SPOC) for his account. By acknowledging the anxious borrower’s probable reason for calling up front and providing that status, the IVR system is able to meet the borrower’s needs more easily and quickly.

Case in point: One of the top 20 mortgage servicers has implemented a conversational IVR that prioritizes routing borrowers to their SPOC as soon as it determines they are in loss mitigation. The routing logic is maintained in a routing points table that’s external to the IVR and can be quickly and easily updated to adjust to changing regulatory and business demands. The IVR assigns a call type, language ID and an indication of whether the caller is authenticated for every transfer.

But, what if the SPOC is not free at that moment? Voicemail is a poor choice; it puts yet another task on the SPOC that keeps him from making progress on his cases. Routing to a member of his team or “pod” is another choice, but that can frustrate the borrower, who expects to deal with just one person. An alternative is to offer a callback to the borrower when his SPOC becomes available. The IVR can facilitate this callback, either at a scheduled time or by camping on the SPOCs extension and automatically dialing the borrower back when the SPOC ends his current call.

3. Go “pro” (as in proactive): Given the Consumer Financial Protection Bureau’s expectation that you establish live contact with borrowers in no less than five common situations in the mortgage lifecycle, you can’t afford to wait for them to call you. The servicing rules that went into effect in January 2014 expect at least good faith efforts to reach borrowers in the event of servicing transfers, escrow or adjustable-rate mortgage resets, suspected loss of hazard insurance, delinquency, and throughout the foreclosure avoidance process. Your IVR stands ready, willing and, if you program it to do so, able to initiate these communications for you.

Because of the aggressive timelines for reaching decisions on modifications or other forbearance, nowhere is this more important than with borrowers involved in loss mitigation. Let’s say you’ve received a request for mortgage assistance form, but the borrower still hasn’t provided you with his 4506-T or verification of income. Although you do have to send them a written notice about the missing documents, servicers are also required to exercise “reasonable diligence” in following up to obtain any missing information, with the definition of “reasonable diligence” extending beyond just a written notice. This is an excellent opportunity to proactively reach the borrower using your IVR. The message can authenticate the person answering the call as the borrower, tell them what’s missing from their package and then solicit a commitment to provide the required docs.

Servicers using this approach have found that distressed borrowers respond well to these reminders, keeping the review process on track and saving both the time and expense of having overburdened SPOCs personally follow up.

4. Boost your brand with a high-quality voice persona: “It’s not what you say, but how you say it that matters.” This well-known axiom is critical to delivering intelligent, trusted IVR self-service. The 7-38-55 Rule, developed at the University of California - Los Angeles, shows that 7% of comprehension of spoken communication comes from the actual words that are spoken; 38% is based on the way words are spoken; and 55% stems from facial cues or body language. Your IVR doesn’t have the benefit of facial cues or body language, so while the words and script for your IVR are important (7%), how your IVR says those words to your callers is five times more critical.

A high-quality voice persona can go a long way to increase understanding and boost IVR satisfaction and usage. To the caller, the voice of an IVR makes a distinctive impression about the company he’s contacting. Robotic, disjointed speech reinforces the stereotype of contact centers as impersonal, uncaring and detached - and does little to bolster a company’s brand.

5. Use foundational IVR components to expand “easy” to your other channels: Consistency counts. That’s why today’s IVRs include technologies that are increasingly leveraged on other channels. For example, using voice recognition to interact with a mobile app is now widely accepted, thanks to the virtual assistants that come built into many mobile devices. Servicers can use the same natural language technology that powers their IVR to add a voice-driven virtual assistant to their website or mobile app.

Similarly, using voice biometrics to make it easy for callers to authenticate themselves within the IVR can also be used to authenticate customers across mobile and Web applications. No need to remember PINs and passwords across devices.

Wider deployment of these foundational technologies can result in a more unified and consistent experience for your borrowers. At the same time, it allows your company to better leverage your IVR investments across other self-service channels. The payoff? Increased customer loyalty, more revenue and a higher return on investment.

 

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The foundation for your omni-channel success

IVR may be a decades-old technology, but it’s being reinvented to meet the demands of the always-on, always-connected consumer. Consumers today want to get things done easily and quickly. The good news is that innovative advances finally make it possible to offer an intelligent, conversational IVR that your borrowers will actually like. By leveraging the best foundational technologies and thoughtful design, your organization can gain strategic advantages that will deliver an easier customer experience - not just for IVR, but across mobile and Web applications, as well. By reinventing your IVR, you’ll gain a competitive edge over rivals that continue to accept their IVR as “good enough.” Now that’s something to talk about.

 

Brian Moore is senior principal of financial services at Nuance Outbound. He has more than 25 years of experience in financial services, mortgage and collections operations, and technology. He can be reached at (781) 565-5000.

Technology

The IVR Reinvented

By Brian Moore

Recent changes in consumer expectations mean servicers must leave yesterday’s IVR in the dust.

 

 

 

 

 

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