Three New Ways to Get Your IT Department to Embrace the Cloud

by David McCann on May 14, 2013 in 2013, Call Centers, David McCann, Industry News with No comments
Getting IT to Embrace the Cloud

Over the past decade, IT departments have been continually asked to do more with less while at the same time are tasked with delivering continued innovation. As the economy recovers, corporate IT and business unit leaders are fighting for a finite amount of resources. In most cases, the business units win and the IT team must implement new solutions with the same, or in some instances, even less budget than they had before.

Agile business units are unlocking these resources to fund customer-centric projects throughout the company, with a focus on enhancing the customer experience and reaching the increasingly digital customer. Unfortunately, the IT machine that enables these projects within the company goes untended. For instance, many business units want to ‘go to the cloud’ so that they can take advantage of the flexibility it offers. In fact, a recent Wired article points to cloud as a way for companies to develop a customer service platform that provides the flexibility needed to turn on a dime in order to grow with customer demands and evolving channels like mobile and social media. The article says that “these channels [mobile, social, etc.] are adapted on an ongoing basis at a rate that most on-premise solutions can’t keep up with from both a timing and cost perspective. The cloud can offer the needed advantages of flexibility and speed, and at a price organizations of nearly any size can manage.”

But, it’s not as simple as flipping a switch. There are several challenges that are stalling their move to the cloud, including:

  • Outdated systems that are costly and time-consuming to transition: many IT departments are still working on older, back-end systems which consequently are holding back deployments of new cloud applications.
  • Limited IT resources: Business units are jostling to get to the front of the line with IT teams but with fewer resources and a long list of to-dos, this can slow down the process. Executive endorsement and approvals can also add to the time it takes to get a project to the front of the queue.
  • Security and compliance issues: Internal review processes, especially for business units moving to the cloud for the first time, are slowing down deployments.

Eventually these challenges may work themselves out, especially as companies begin to re-examine their priorities and adjust business processes to better accommodate the demands of digital consumers and employees. There are three things companies should keep in mind today to address these:

  1. Share the love. Without a good foundation, a large structure will crumble. The same applies to corporations and their IT departments – without a strong IT foundation to support digital functions, companies may find themselves rushing to fill in unforeseen gaps and errors in consumer applications, in addition to a growing lack of flexibility and responsiveness to new cloud engines. For every non-IT project, companies need to set aside funds for internal IT departments to make sure they have the resources and systems required to both manage and integrate a new program.
  2. Think of your IT system in layers. Corporations do not need to move their entire systems into a cloud environment. Rather, businesses should explore creating a service-oriented access layer for cloud services on the front of older systems and applications. This eliminates the need to wholesale move systems to the cloud.
  3. Remember that cloud isn’t an all-or-nothing solution. With cloud computing, know that data will not exist just in one place, but linked across clouds and on premises applications, creating a hybrid world involving both types of systems. This enables companies to be more nimble and move data and applications between cloud and on premises systems to meet their needs.  Think data federation, encryption and rules in multiple places.

As a cloud-based SAAS supplier of Customer Interaction Management for the Fortune 1000, Varolii sees huge benefits being derived for B2C companies moving their customer engagement systems to the cloud. For our customers, cloud computing has reduced customer service costs, increased customer engagement rates results by up to 20%, and relieved the burden on tightly staffed call centers. In the long-term, the cloud will replace many of the legacy systems and infrastructure that companies have today. Looking to the future, the internal IT team will likely become a department focused on data governance and security, rather than managing where data lives and how it is processed.

Getting off on the right foot with mortgage servicing

by Brian Moore on May 2, 2013 in 2013, Brian Moore, Varolii News with No comments
Mortgage servicer starts on the right foot - first payment defaults drop 17%

Mortgage servicers have a tough job. Mortgages are typically the largest financial obligations a consumer takes on, and are often the most complex. Besides the loan itself, the mortgage relationship may include things like adjustable rates, mortgage insurance, and escrow accounts, any or all of which may be unfamiliar to the borrower. When the eventual mortgage servicer ends up being different than the original lender, it adds yet another wrinkle that can lead to confusion and dissatisfaction.

That's one of the reasons why the Consumer Financial Protection Bureau (CFPB) recently issued guidance  to servicers to address potential risks to consumers that may arise in connection with transfers of servicing. Their concerns are backed up by research from JD Powers and Associates.

At the recent National Mortgage News Mortgage Servicing conference, Craig Martin, a director in JD Powers mortgage practice gave a presentation entitled "Aligning Customer Service Best Practices with CFPB Guidelines: A Win-Win for Mortgage Servicers" where he shared this slide on servicer transitions:

jdpowers initial contact has large impact 1024x739 Getting off on the right foot with mortgage servicing

JD Power's research shows that borrowers who are welcomed with information about the transition by the new servicer rate their satisfaction 10 to 25% higher than those who are not welcomed.

While the CFPB requires services to send a written notice of a servicing transfer, many of Varolii's clients have found that a letter or even an elaborate welcome packet won't inform a borrower if they don't read it! That's why they go the extra step of delivering a welcome call to the borrower, letting them know about the transfer, important information about where and when to make their payments and offering to immediately connect them to a knowledgeable customer service representative if they have any questions or concerns.

Varolii recently assisted a top ten servicer in on-boarding a portfolio of over 300,000 loans with a campaign of interactive voice messages that did just these things. The servicer split the portfolio between Varolii and a call center outsourcer who used call center agents to make a call to the borrower. The Varolii solution cost 30% less per welcomed borrower, and the first payment default rate fifteen days after the first payment was due to the new servicer was 17% lower on Varolii treated accounts than those treated by the outsourcer.

I can't think of a better indicator of customer satisfaction than an on-time payment.

The Devil's in the Details – FTC Loses Clarity on Robocalls

by Brian Moore on April 18, 2013 in 2013, Brian Moore, Compliance, Varolii News with No comments
FTC’s blurred definitions may impact customer service phone calls

What was missing from the FTC's announcement of the winners of their Robocall Challenge?

Just one word.

MARKETING

Recently the FTC held a press conference to announce the winners of their $50,000 Robocall Challenge, launched October 2012, which asked the public to come up with a technical solution to block illegal robocalls. In his presentation of the awards and in answering subsequent questions from the media, Chuck Howard, acting director of the commission's Consumer Affairs division, never once clarified that what makes a pre-recorded phone message an "illegal robocall" is that they must be attempting to sell a product or service.

In other words, they must be MARKETING calls.

Unfortunately, not only did the acting director fail to provide this clarification, he instead said:

"It's illegal for companies to use any sort of pre-recorded device to place calls to consumers without express written authorization from the consumer."

That's a very disturbing misstatement of the actual rules for companies using pre-recorded messages to communicate time-sensitive information to customers about such things as delayed flights, upcoming appointments, prescription refills, possible credit card fraud or overdue payments. All of these and other customer service messages are in fact legal without requiring the customer to authorize them in writing.

What's more important is that customers want these messages. In a recent survey for the banking industry, we found that 54% of customers want to be immediately notified of irregular account activity or if changes are made to their account information. We also find that customer response rates to pre-recorded messages concerning the status of their application for credit or modification of an existing loan average above 65%, indicating a very high level of acceptance for a form of communication the FTC appears unwilling to acknowledge as beneficial.

While I applaud the enforcement action the FTC recently took to shut down the operations of a scam artist using pre-recorded messages to sell credit card interest rate reductions and extended warranties, I am worried that unless the commission does a better job of educating the public on the law, the call-blocking solutions proposed in response to their challenge will interfere with legitimate forms of customer communication.

That's why I propose the FTC begin using a new phrase to describe the illegal use of recorded messages for soliciting the sale of goods or services:

Robo-MARKETING-Calls

At the same time, they should make a distinction between Robo-MARKETING-Calls and the customer-pleasing, health-promoting, convenience-increasing, fraud-preventing, credit-improving communications they can refer to as:

Interactive-SERVICE-Calls

If they do this every time they address the topic of illegal calls, they will be presenting fair, balanced and accurate information to the public they are protecting, the businesses they are regulating, and the press who might otherwise miss the very important distinction.

Don’t let Messaging Apps fool you!

by Tim Fujita-Yuhas on April 1, 2013 in 2013, Mobile, Tim Fujita-Yuhas, Varolii News, Wireless/Telcom with No comments

Enabling text messaging as part of a cross channel application is the smart move.

In a recent Wall Street Journal article dated Thursday, March 28, 2013, they talked about the rise of Messaging apps and contrasted this with SMS text messaging.  See the picture below for background information.

text wars Don’t let Messaging Apps fool you!

Let’s clear up a couple points of possible confusion for business readers.

1. What are messaging apps and why are consumers downloading them?

Messaging apps are mobile apps (usually requiring a smartphone) that enable consumers to send the equivalent of what look like text messages to other consumers who have also downloaded the same mobile app.  Okay, so why would a consumer want to do this since they could just send a text message to their friend?  Cost savings. If consumers are paying their wireless phone carrier for receiving or sending text messages, then they could avoid paying for those text messages or reaching their monthly limit of text messages in order to save money on their monthly mobile phone bill.  Downloading and using a mobile app to send the equivalent of text messages substitutes the cost of paying for these texts with the cost of paying for your phone’s data plan since these mobile apps are simply passing small data messages over the wireless carrier’s network.  Since some wireless phone carriers may charge more for text messaging than they do for data plans, the wireless carriers have created an incentive for cost-conscious consumers to use these messaging apps instead of continuing to use their text messaging plans.

2. Why are these apps getting so much traction outside of the US but not within the US?

In most of the world, wireless phone carriers still charge consumers for text messages, thus you see large growth rates of these Messaging Apps by consumers in places like Brazil (see chart).  However, in the US, the major wireless carriers have effectively preempted the significant growth of messaging apps by eliminating the financial incentive for consumers to download them.  US wireless carriers have been actively converting consumers over to plans that give unlimited voice and texting and have tiered data plans.  Therefore, consumers don’t need to limit the number of text messages they are sending from smartphones in an attempt to save on their monthly mobile phone bill so they have no real incentive to download these types of apps.   US wireless carriers know that video and online games and richer websites are going to fuel consumer’s utilization of their networks. Since this is where the real data growth of consumer smartphone utilization lies; this is what they are driving consumers to pay for.  US wireless carriers would be on the losing end of a battle with consumers over charging separately for text messaging when consumers could use a messaging app to achieve the same thing at a lower cost.  Since carriers want consumers to buy more smartphones as well which are capable of using more of their data network, it makes business sense for the carriers to offer unlimited voice and texting which barely utilize their built out network and charge consumers to more consumers based on using their mobile data plan.

3. Can’t my business bypass text messaging like these messaging apps do?

By now you are probably asking yourself, why can’t I use Varolii to send messages like these messaging apps are doing and avoid paying for text messages?  Well, to begin with, you or Varolii would need to create a messaging app and get your consumers to download it.  Frankly, consumers are more likely to download your primary mobile app and receive push notifications in it.

If you want two-way texting functionality like these messaging apps provide, it can be build into your mobile app as a form of instant messaging like chat with your contact center so again, no reason to create a separate messaging app.

Alternatively, you might be thinking, can’t Varolii just leverage existing messaging apps such as WhatsApp? The issue there is that most of these messaging apps are closed systems that only allow for consumer-to-consumer messaging rather than business-to-consumer text messaging.

In conclusion, text messaging is still your best bet for reaching your consumers and adding text messaging as part of your cross channel engagement strategy. Messaging Apps for business use are no more than a bad April Fool’s joke.

Take Better Aim With Your Collections Messages

by Brian Moore on March 27, 2013 in 2013, Brian Moore, Collections, Varolii News with No comments

What in the world could flies in the urinals at Amsterdam's Schiphol airport have to do with improving the performance of your collections operation?

That's what a roomful of Varolii clients wondered when Dr. Mathew Isaac showed this picture during his presentation "The Message Effect: How Content and Channel Choice Influence Consumer Behavior" at our annual customer conference.

urinal speck Take Better Aim With Your Collections Messages

According to Dr. Isaac, a professor at Seattle University's Albers School of Business & Economics, the Dutch airport authorities have found that providing a target such as a fly (actually the image of a fly etched into the urinal porcelain) has reduced "spillage" in the men's restrooms by 80%. As he went on to explain, this gentle "nudge" is an example of how experiments in human psychology provide insights that can be applied to domains other than airport maintenance.

If you are designing messages to influence customer behavior, Dr. Isaac says there are three levers for motivating behavioral change: Words, Options and Channel.

Words, words, words

When it comes to words, how you say something is often as important as what you say. Consider "valence framing", which contrasts the impact of positively and negatively phrased statements. Research shows that sometimes its better to focus on the downside of not doing something rather than the upside of doing something. For example:

"If you don't quit smoking, you increase the risk of developing lung cancer" has proven a better smoking deterrent than "If you quit smoking, you reduce your risk of developing lung cancer"

Applying the same principal to a collections message suggests saying:

"If you don't make your payment today, you will incur a late charge" will cure more accounts than "If you make your payment today, you will avoid a late charge."

If one choice is good, three must be better?

The options we give to customers is another dimension of message design to consider. Specifically, limiting the number of options presented in a message can drive a higher response rate. Dr. Isaac cited a grocery store experiment where some shoppers were offered samples of six different flavors of organic fruit jams and other shoppers could choose from 24 different flavors. While both sample booths were equally busy with tasters, the booth that offered only six flavors resulted in 500% more product sales!

So even though you might offer your customers four different methods of payment (e.g. ACH, Credit Card, PIN-less Debit and Cash) through five different contact channels (e.g. Web, Smartphone Application, IVR, Kiosk and good old postal mail), its probably not a good idea to offer all of these in a collections message when a simple "to make your payment now, press 1" will do.

Switching channels

Picking the right channel for message delivery can not only affect your customer reach, but the channel by its very nature may be more conducive to collecting a payment from a past due account. Consider a phone call to a customer's workplace compared to a text message to their mobile phone. The customer may be very reluctant to converse with you in an open and honest fashion at their job about why they haven't paid their bill, let alone read off their bank account or credit card numbers to make a payment. But the same information delivered via a text message will let them take care of the problem in private, and it will often cost you less than the phone call.

The importance of testing

Dr. Isaac shared several other examples of how changes in content, options and channel have been shown to improve outcomes in healthcare, commerce and collections, but he made a point of closing his presentation with a call for experimentation. Only you can determine what works best for your company in the context of your products, services and the type of customer you serve and the best way to figure it out is to run randomly controlled tests that compare customer reaction to different strategies. Varolii can assist you in this effort, with everything from simple A vs. B testing to multi-variable experiments from which we derive predictive segmentation models.

We don't, however, offer stencils for your urinals. But you can order them online.

Debtors get new hope, collectors a new tool

by Brian Moore on March 11, 2013 in 2013, Brian Moore, Collections, Varolii News with No comments

VantageScore, the three major credit bureus' scoring competitor to Fico, has announced they will no longer be including paid off bad debts in calculating consumer's credit score.

VantageScore says cold, hard numbers motivated it to make the change. The company was trying to build a model that offered the best possible predictions of consumer behavior, and its mathematicians determined paid collections accounts are a poor predictor of default.

"At the end of the day, the mathematics had to win out from an objective standpoint, and not from a subjective standpoint," says VantageScore President and Chief Executive Officer Barrett Burns, though he is well aware of the controversy over counting unpaid collection accounts.

While there will be a raging debate about the validity and propriety of the move, from a consumer's perspective, it represents hope that a temporary financial setback won't necessarily raise their cost of credit for the foreseeable future.

Collectors should also benefit, as they could truthfully inform debtors that paying off their bad debts would in certain circumstances, improve their credit scores.

It will be interesting to see if Fico follows suit, and if the move blunts efforts in Congress to make it illegal to consider paid off medical debts in credit scoring.

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