How Office Depot's voice-recognition call center is harmonizing with its web site
Rick Markley
Retailers with a large commitment to the web understand its value in making it easy for customers to place orders. But what about the small business owner who suddenly remembers while stuck traffic that he needs to place an order? Or the office manager who fills the supply cabinet each month, but refuses to buy online? Office Depot, the office supply provider, has found that a telephone-enabled web site is effective mortar for such cracks.
Even retailers who have made a major commitment to the web—as has Office Depot—realize that the web is only one way of communicating with customers. But it’s an important way and it usually takes a large enough commitment of resources that retailers want to make sure the investment pays dividends in customer relations. Thus many are looking at ways to increase web-based sales through other access devices.
Since last year, Office Depot has become a big fan of integrating the telephone with its web operation. Last fall Office Depot switched to NetByTel’s Telephone e-Business Platform, a speech-recognition system which the office supply giant says will save money and which blends seamlessly with its web site.
“A year ago when NetByTel approached me about using this system, I turned my nose up at it,” says Ken Jackowitz, Office Depot’s vice president of business systems. Just being able to talk to the web site wasn’t enough to justify the allocation of resources and change in operating procedures it would take to implement. But then he realized the speech-recognition system could strengthen the entire ordering process. Learning that implementing the system would require minimal changes in the way Office Depot’s web site is configured was an added bonus. Reducing the risk to Office Depot was NetByTel’s pay-as-you-go fee structure.
In addition, Office Depot was looking to improve the efficiency of its call center, which handles store- and web-generated customer service and catalog orders. For orders alone, the company gets more than 10,000 calls per day.
Speak up
The automated voice recognition system is a great way to integrate different customer interfaces while using technology to improve customer service, says Gartner Group Research Director Bern Elliot. Speech-recognition systems are becoming more accepted by the using public and work well with the right application, and Office Depot appears to be such an application, he says.
The voice-recognition system is a far cry from the button-pushing prompts offered by Office Depot’s old system. Half of those who use a touch-tone phone will immediately request an operator when confronted with a system instructing them to enter numbers, says Steve Avalone, vice president of marketing for NetByTel. Of those 50%, 75% are willing to try a speech-recognition system.
Why? It may be because a speech-recognition system is more akin to a real conversation. Jackowitz will not say how many calls the new system handles, but that more than 5% of incoming orders go through the new system—a sign of early success. Office Depot is promoting the voice-recognition system in mailers. The company expects its use will climb.
The system asks callers a series of questions and moves them through the system based on their responses. Saying “operator” or hitting zero anytime during the message sends the caller to a live person. The system has even been designed to recognize broken or heavily accented English. If the system fails three times to recognize a word, the caller is transferred to a live operator. “A live and quick exit to an operator is critical,” Elliot says.
Office Depot believes more callers are likely to use the system that appears more human-like than robotic. To make the system more human sounding, Office Depot is having the voice talent record numbers from zero to 1,000. This way, Jackowitz explains, when a caller gets a price, the numbers will sound smooth, rather than choppy or pasted together.
“This is the kind of customer support we are seeing more of in e-retail; we expect to see more to come,” Elliot says. This is a next level of customer service, he adds. NetByTel created this system for Office Depot and is now marketing it to other companies—eToys, Priceline and Flooz already have similar systems.
Connecting the dots
As important as working well with callers, the answering system must also work with Office Depot’s backend systems. The speech-recognition system is built from seven modules, or functions: catalog request, catalog order, order status, store location finder, product price, product availability and driver network. In June 2000, Office Depot piloted the system with the store locator and catalog request modules. In September it added the ordering and other modules. Orders phoned in are automatically taken out of the inventory and appear on the web page under order status in real time. Items can be ordered by phone or online, and the order status can be checked through either medium. A customer could be thumbing through a catalog, place an order by phone and print the receipt from the web site. “It’s about making the mundane task of ordering more convenient,” Jackowitz says.
“This is an example of how you have to integrate all your customer interfaces so each channel knows what is going on,” Gartner’s Elliot says. A lack of this integration, he adds, was largely responsible for the debacle among dot-com retailers in general during the 1999 Christmas shopping season. Items ordered by phone or online were not removed from the overall inventory, which led to orders being taken that could not be filled.
But as with any new technology, there is a learn-as-you-go element. Office Depot is working to upgrade and streamline the new system. In addition to adding more voice-recorded numbers, Office Depot will trim some of the system’s prompts to let callers move more quickly through the system. When a caller is ready to checkout, the system reads back each item in the shopping cart by saying “the first item you ordered is ... the second item you ordered is,” etc. In the scaled back version, the system will say only “next is.”
Office Depot will modify the system early this year to include what Office Depot is calling “Rapid-Fire Ordering.” That modification will incorporate the online frequent ordering list so callers who replenish the same order can do so as quickly by phone as they could online. Office Depot customers can use the web site to create frequently ordered lists and name those lists (such as new employee list). The rapid-fire program will allow a customer who already has an online list to order the “new employee list” by phone. The system will allow callers to edit the items and quantities of the list, as they can online. Office Depot also has expanded the system to handle larger orders. Office Depot had set the order limit to 50 items, but found that customers wanted to make larger phone orders. The system was expanded to handle 500 items per order.
The direct link between the speech-recognition system and Office Depot’s backend server was a key deciding factor for Office Depot when choosing the system. Helping to make the decision easier was Office Depot’s compatible infrastructure. Because the system was able to work with Office Depot’s existing hardware, there were no infrastructure costs, Jackowitz says.
Dewey Anderson, NetByTel’s CTO, says NetByTel houses all the system’s hardware. It’s the direct link to Office Depot’s servers that allows for the real-time inventorying. Office Depot bears none of the IT responsibility. It took Office Depot only 16 hours of technical effort to deploy the system. Office Depot already used a completely integrated backend system. Portions of the backend architecture were exposed so the speech-recognition system could talk to the servers as would a web browser. “This has really validated our own infrastructure,” Jackowitz says.
Paying for the system is directly tied to how often it works. NetByTel waived Office Depot’s up-front fee, which Avalone says can be as much as $500,000, in exchange for a pay-for-performance system. NetByTel gets a flat fee each time a call is completed-whether it’s a request for information or a purchase.
Jackowitz says using the speech-recognition system is about 85% cheaper per call than using a live operator. In the short term, this frees the call center to concentrate on customers who need personal attention. Down the road, the system will allow Office Depot to either reduce the call center staff or reallocate them to making out-going sales calls.
Jackowitz says the company would have never attempted automated ordering with its push-button prompt system because push-button systems can be unwieldy. Speech-recognized systems will not likely spell the death of conventional push-button prompt systems, Elliot says. But, because the technology is affordable, speech-recognition will increasingly replace the older systems.
With the telephone integrated to its web site, Office Depot is clearly hoping that the voice-recognition system will prove the old adage that talk is cheap. 
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