Kaihan Krippendorff 06.07.1212:35 AM
 
I spent the last three months researching breakthroughs in customer service to prepare for a workshop I recently delivered for a global technology firm. I interviewed Harvard professors, read books, and spoke to forward-thinking CEOs. What I found is that innovators are hard at work on the fringes , and as their innovations come into the center, they will transform what customer service means for your business and your life as a consumer. Customer service stepping onto the stage
Since capitalism latched on to mass production, customer service has been a necessary evil: banks of phones draining money; disgruntled managers complaining that their disgruntled call center workers keep quitting. But that is changing. As traditional sources of sustainable advantage like economies of scale and customer captivity erode, as change accelerates and products commoditize, providing better customer service becomes one of your only sources of advantage. As Amazon CEO Jeff Bezos put it, "When people ask me if our customers are loyal, I say, ‘Absolutely, right up to the second that somebody else offers them a better service.’"
Listening 3 million ways
Phone keypads may go the way of rotary dials when we no longer have to experience the excruciating "touch 2 for what you don’t need" exercise. SpeechCycle is one firm helping companies recognize what you want just from your confused utterances. "We know 3 million ways customers might complain about slow internet service," says Zor Gorelov, CEO of SpeechCycle. By listening to lots of customer service calls, SpeechCycle’s technology gets smarter every day and pushing toward a future in which the customer service message that greets you says "Hi, how can I help you? " rather than "Press 1 …. " You can explain your issue in plain language, and the technology will simply solve your problem without human interference. This means empty call centers, happy customers, and profitable companies. Self-adapting systems
Today when a business manager wants to change a customer service process, they have to write a request to their development team, who then interviews them, designs a process, and has the business side review it. Then the development team codes it, sends it to a user interface expert who makes it look pretty, then the tool is piloted and revised. The process can take weeks, even months. Pegasystems  can shrink that process to a few minutes. It puts into the hands of business managers a design tool that helps them visually lay out a new process, link it to databases, then automatically generate the coding, so that within minutes they have a new program. Let’s say you work for a student loan agency and you realize how to improve the process of accepting a new loan application. Over lunch you draw out a flow chart on your computer, enter the questions someone should ask ("What year will you graduate? "), specify where the program should launch some automatic processes (e.g., conduct a credit check) or access outside data (e.g., the student’s past loan payment history), and then generate automatic communications (e.g., send an email confirmation). By the end of the lunch hour you have a new fully integrated program. You competitors, meanwhile, will take a month or more to adopt your innovation. This is part of a broader trend of self-service and customization: sushi shops in Japan with ordering panels at tables to communicate directly with the kitchen, airport self-service kiosks that sell you travel insurance and upgrades, and so on. Customer service as cost reduction 
The idea that customer service costs money is being turned on its head. Instead, customer service is reducing costs. Consider iGate , whose unique engagement model enables it to dramatically reduce the process costs of its clients...and keep a piece of cost savings for itself. Consider Progressive Insurance, whose blue and white trucks race to the site of your accident, often even before the police arrive. Keeping this fleet afoot is costly. But this customer service offering is actually a cost saving in disguise. You see, on average, $15 out of every $100 in insurance claims are from fraud. By being there first, Progressive can ensure their claims are clean and create a significant cost advantage over its competition. Customer service as revenue generator
You bring your new Xbox home but you can’t connect it to your WiFi service. Who do you call? Often customers first call their cable company, thinking it’s an Internet problem. But your cable company tells you the Internet is working and that you should call the retailer, Best Buy. But Best Buy says it’s a hardware problem and you should call the Xbox manufacturer, Microsoft. RadialPoint is changing the too common scenario. Now your cable company will say, "The Internet connection seems to be working and we didn’t sell you the Xbox, but we can help you solve your problem. " For an extra fee, they will pull up a program that puts into your customer service advisor’s hands all the knowledge they need to navigate your internet, Xbox, Best Buy mess. Customer service is becoming a revenue generator. One expert I interviewed told me Best Buy’s service business (GeekSquad) generates 10% of the company’s revenue but 25% of its profit. RadialPoint is now helping leading retailers and Internet service providers around the world go into the business of providing customer service, even for goods they do not sell, for a profit. Add all of these shifts together and we start to see a radically different picture. Machines that can listen and understand you, connecting to business processes that adapt immediately to better practices, providing better customer service that saves money and even creates profits. Customer service becomes a central source of competitive advantage. Step into this new world or risk being left behind.


The Radical Transformation Of Customer Service

Kaihan Krippendorff 04.03.1212:10 AM
My recent post, " Why Small Businesses Should Scrap Strategic Planning ," set off a barrage of conversations, mostly from entrepreneurs who agree. Big companies have to make all their strategic decisions at once during an annual strategic planning session because it is too difficult and costly to get their team together more frequently. Small companies get to take the opposite approach: They tackle strategic choices as they come. Consider Zor Gorelov, the CEO of SpeechCycle , a company that transforms how phone and cable companies like Telstra, Cablevision, and Cox deliver customer service. Last week I got a chance to sit down with Zor in the SpeechCycle headquarters. Deep in Wall Street, next to a sunny window overlooking the Statue of Liberty, I asked him to lay out the strategy that’s driven such dramatic growth (SpeechCycle was recently recognized by Deloitte as a "Technology Fast 500"). He walked through five pivotal decisions that collectively compose a disruptive strategy that, so far at least, position them as the uncontestable leader in what they do. 1. The perfect exit: Before launching SpeechCycle, Zor, a 25-year-old Russian engineer, recognized that while Soviet-era hospitals could not afford even basic sheets, they still wanted cutting-edge IT systems to keep up with the West, so he started building them. He launched a software company and saved just enough to buy tickets and get out of the Soviet Union with his wife and young son. 2. The search for meaning: After a stint at Bell Labs and Microsoft, followed by launching and selling BuzzCompany.com, one of the first Internet messaging software companies, Zor became fascinated by how humans extract meaning from speech. This lead him to launch SpeechCycle with several cofounders to realize a simple insight: They could help large firms use software to listen to and understand their customers better. Because they focused early and intensely, they now have unparalleled expertise using proprietary "High Definition Statistical Natural Language Understanding" technology to understand certain types of conversations. For example, they know the virtually infinite ways a customer might complain about a slow Internet connection. Do you? If you don’t, you might want to try SpeechCycle, which would enable you to have your phone system simply ask, "What is your problem? " while your competitors guide their customers through the torturous "Press 2 for an option you don’t want" process. 3. Borrowing a road: In their first days, Zor and his cofounders, who bootstrapped the company, figured their best target customers would be electronics firms like HP. They were desperate to win clients so they sat down with a list of 1,500 consumer electronics companies and started cold-calling to win their first customer, a second-tier printer manufacturer. It soon became clear they were barking up the wrong tree because most customers call their phone and cable service providers when they have a problem. You don’t call Linksys when your router is down, do you? You call your Internet service provider first. SpeechCycle now serves leading telecom service providers instead. 4. Use the cloud: On a high-stakes phone call with HP, their target client told them that HP is very unlikely to buy software from a small software company. They simply don’t do that. So years before "software as a service" or "the cloud" were known terms, SpeechCycle adopted that model. 5. Sell value: Early on it was difficult to get customers to take a leap and pay this relatively young, unknown company to do something they were not convinced yet was possible, so the SpeechCycle team pivoted their pricing plan, saying, "Only pay us when it works. " If a customer calls and cannot solve their problem through the automated SpeechCycle enabled system, if they hit "zero for an agent," SpeechCycle does not get paid. Now, somewhere at Harvard Business School, a professor is telling impressionable students that the way to create a strategy is to sit down, think, and then document a set of decisions like this. They might even call up SpeechCycle as an example, and argue the company’s strategy is disruptive because they focused on:
1. Getting better than others at extracting meaning from utterances
2. Serving service providers, not hardware makers
3. Moving early to the cloud
4. Creating a pricing plan that makes it easy for potential clients to sign on
And while this is true, it overlooks how innovative disrupters like SpeechCycle arrive at their strategy. They strategize immediately, as needed, not in November every year. They strategize in 10 minutes in the hallway, not over three days in a boardroom. The key to outthinking your competition is to make smarter decisions at every turn. So the next time you make a decision, stop what you are doing and think for 10 minutes. Break your thought process apart into five steps. My book, Outthink the Competition , provides tools to manage these steps precisely, but here is a short version:
1. Imagine: What do you want to achieve? Real-life example: I am about to get on a phone call and want the others to hang up motivated and in action. 2. Dissect: What must be true? They have to (a) see we are making progress, (b) hear excitement in my voice, and (c) know what to do next. 3. Expand: Come up with 10 or more ways to achieve what must be true. I can list out all my achievements this week, I can put them in the right order, I can drink an espresso, etc. 4. Analyze: Choose the 1-3 ideas that will have the biggest impact and that are the easiest to do. I decide to list out my achievements and put them in an order that weaves a narrative of momentum. 5. Sell: Think about how to communicate your plan. Since the people on the phone are analytical, I will communicate my achievements with numbers (e.g., we had 2 new pitches, raised $3 million in new commitments, etc.). Try it out—and if you have a breakthrough, tell us about it in the comments. [Image: Flickr user Michael Broxton ]
Newsletter
Get the latest Leadership stories delivered to your inbox daily. Send
I'd also like to receive special Fast Company offers
Must Reads


The 10-Minute Strategy Session That Will Recharge Your Business

1.7k
2011-05-05 16:42:01 UTC
Roberto Pieraccini is chief technology officer at SpeechCycle , a global leader in customer experience management solutions. He has been at the leading edge of spoken dialogue technology for more than 25 years, both in research as well as in the development of commercial applications. The widespread adoption of smartphones has already revolutionized our everyday behavior and, in particular the way we communicate. We read on smartphones, play on smartphones, reserve our dinner or movie tickets on smartphones and, sometimes, we even use them to call people. In fact, it was recently reported that the use of smartphone applications is exceeding that of text messaging, voice calling and web browsing. What does all this mean for customer care channels? Invoking a branded icon on the touch screen of a smartphone — which already knows who we are and can provide the best personalized solution to our service problems — is no doubt a more pleasant experience than interacting with an automated call menu or waiting for the next available representative. However, building a smartphone application that's able to deliver a superior customer care experience is more complicated than just porting a mobile version of your FAQ. Here are a few points that every company should consider when deciding to develop a mobile customer care solution. Create a Platform-Agnostic App
One of the main issues with the development and maintenance of smartphone applications lies in the fragmentation of the device base. Fortunately, most, if not all, smartphones can be grouped according to the four most common mobile operating systems: iOS ( iPhone ), BlackBerry , Android and Windows Phone 7 . Even so, maintaining four versions of the same application can be prohibitively expensive for some brands. In that case, you might want to consider using cross-platform mobile frameworks in the construction of your app. They're not perfect, but they can be cost-effective. Additionally, advances in modern web standards like HTML5 and CSS3 mean that mobile web apps are functioning more and more like native mobile apps . If you can build a great mobile site, it would function well on most modern mobile devices. Ensure the App Integrates Into the Overall Customer Care Strategy
In moving toward mobile customer care strategies, service providers have to consider that while the adoption of smartphone applications will continue to increase, the need for traditional care — agents, automated phone applications, the web — will still exist, even if at a reduced level. Thus the integration of smartphone self-service applications with traditional channels is essential. For instance, as the result of a transaction on a smartphone, the application can decide to transfer the user to the right agent for the requested task or schedule a callback, while providing the target agent with information about the subscriber’s issue and interaction history. Or, if the user decides to access support on the desktop website, the interface there should be able to get the same historic information about the user as the smartphone app does. In a nutshell, you need to make sure one hand of your customer care strategy knows what the other hand is doing to ensure a cohesive, effective system. Develop Intelligent Notification Capability
The “always available, always connected” property of smartphones is a uniquely new channel for pushing notifications in a non-intrusive and highly personalized manner. Targeted notification, such as information concerning a local outage, new features or promotions, will not only improve the customer experience but will be instrumental in avoiding further issues and calls to agents and will increase the loyalty of valuable customers. The notification feature can also be used for outbound survey campaigns and the solicitation of customer feedback. Create Personalized Experiences
Leveraging the highly personalized smartphone environment is another powerful way to ensure great user experiences. With the precise identification of each device, and thus the subscriber who owns it, companies can now decide not only to present highly personalized information but also keep track of the history and usage patterns of each individual. This behavior can also be enriched by leveraging capabilities such as location services and near-field communication (NFC). Take Advantage of New User Interface Capabilities
Finally, it is important to realize that smartphones offer the ability to reach customers in a variety of ways. They can interact with a mobile application either by touch, type or talk. Touch has always been critical, but the growing implementation of voice search (most notably by Google on the Android platform) has opened new frontiers for app developers. Free-form text and voice input, when complemented by powerful natural language processing systems, can provide superior search and help users bypass long and often counter-intuitive hierarchical menus. While the adoption of smartphones continues to grow exponentially and the emergence of new and personalized customer care mobile applications comes into the mainstream, vendors need to make sure they design and build applications that are at least as smart as the phones that host them and leverage all properties and features of this new medium. If vendors keep this in mind, smartphones can truly become the next frontier for customer care. Interested in more Mobile resources? Check out Mashable Explore , a new way to discover information on your favorite Mashable topics.


Name	Work History	Title	Status
Ruth Reiter Brown	Multex, and Software Corporation of America	Founder	Current
Gary S Lavado	DataSynapse	Chief Financial Officer	Current
Zor Gorelov		Chief Executive Officer	Former
Roberto Pieraccini	Jibo, IBM, SpeechWorks International, and AT&T	Chief Technology Officer	Former
David Ho	Synchronoss Technologies, Nuance Communications, Pivot Solutions, Mavenir, Hewlett Packard Enterprise, and Schlumberger	Senior Vice President	Former

Name	Ruth Reiter Brown	Gary S Lavado	Zor Gorelov	Roberto Pieraccini	David Ho
Work History	Multex, and Software Corporation of America	DataSynapse		Jibo, IBM, SpeechWorks International, and AT&T	Synchronoss Technologies, Nuance Communications, Pivot Solutions, Mavenir, Hewlett Packard Enterprise, and Schlumberger
Title	Founder	Chief Financial Officer	Chief Executive Officer	Chief Technology Officer	Senior Vice President
Status	Current	Current	Former	Former	Former

Wells Fargo Success Story

3M Success Story

Platform Overview

SpeechCycle

Executives

SpeechCycle Management Team

6 Team Members

Discover the right solution for your team