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Enormous Cost Savings, 
Customer Satisfaction of Speech Recognition

Paul Kowal, President of Kowal Associates, Inc., a leading Customer Relationship Management (CRM) consulting services company located in Boston, MA, discussed the pros and cons of speech recognition vs. traditional interactive voice response (IVR) at the Direct Marketing Association Telephone Marketing Conference in West Palm Beach, FL. While he said the days of using your touch tone phone to check flight reservations and pay your credit card balance are far from over, speech recognition technology is becoming the technology of choice for companies and consumers alike.

Kowal cited how Dual Tone Multi Frequency (DTMF) IVR, the software that allows customers to communicate with automated systems to perform basic tasks at any time, has several major drawbacks. It cannot be used by rotary phone users, is awkward to use from portable handsets and cell phones, and is frequently tedious. Also, consumers are often overwhelmed by the choices they're given; other times, he said, the automated menu doesn't cover their specific request.

"Over 60 percent of people have hung up on an IVR system at least once," Kowal said. "Many times, it's because of the routing procedure; once you've started down a path, it's difficult to go back."

As an alternative, Kowal discussed the newer speech recognition technology-- hardware and software that responds to a customer's voice. With it, customers can simply state what they want into the phone in a casual speaking voice, and the automated system responds accordingly. The technology is currently in use with great success by a growing number of companies, including Federal Express, Sears, and United Airlines.

Kowal said that not only can speech recognition technology identify a customer strictly by voice and store the voiceprint in a database for future use, it is actually preferred by consumers.

"74 percent of those surveyed said that speech recognition is as good as speaking to a live rep or better," he said. "And some people even say they preferred the speech technology over speaking with a rep! This type of acceptance is unheard of."

What's more, Kowal stressed the massive cost savings that speech recognition can bring as an alternative to a live call center representative. A speech port handling calls through speech recognition technology costs about $3,500 a year, compared to nearly $35,000 a year to pay, train and supervise a live rep.

"It's a cost savings of 94 percent," Kowal said. "It may seem too good to be true, but there it is. A 94 percent savings to implement a system that customers say they prefer."


Kowal Associates is considered by clients to be an integral part of their marketing team, providing everything from strategic planning to recommending and training customer service representatives to managing a client marketing program's day-to-day operations. Kowal's client support philosophy is to keep abreast of changes that affect client industries, competitors and most importantly the customer. Kowal also educates clients about current and cutting-edge technologies, such as speech recognition software and e-care applications.

Kowal Associates is a leading Customer Relationship Management consulting firm focused on the design, integration and management of in-house and outsourced teleservices. Kowal Associates' clients range from Fortune 100 companies to Internet startup firms. For more information, call or write to: Kowal Associates, 7 Faneuil Hall Market, Boston, MA 02109-1649; call (617) 521-9000; fax (617) 521-9010; or email: marketing@kowalinc.com.

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