GO AHEAD They’re Listening

If a tree falls in a forest and there is no speech recognition software around, does the impact of the tree on the ground make a sound?

The question is not just a whimsical update of an old cliche. With the advances in speech recognition software and hardware, call centers can use “virtual” operators for most of the mundane calls. Some programs can even include upsells.

E*Trade Group Inc., for example, uses voice recognition for its online investment services. According to Michael Welton, manager of international and IVR (interactive voice response) products, the reasons E*Trade went for speech recognition were twofold.

“It’s cool,” Welton says, “and some people are touch-tone impaired.”

He adds that speech recognition is a good fit to the Web. “It’s another way to have quick access. You hit the account, find out your balance, and trade.”

It also seems to be attracting “a new breed of customers” to the Palo Alto, CA-based company.

The typical E*Trade customer, Welton explains, either owns a personal computer, has one at work and is in the 30- to 50-year-old age range. Voice recognition systems also attract customers who do not own or are not comfortable with personal computers or touch-tone telephones.

Most of E*Trade’s investors find out about the telephone service from their Web site (www.etrade. com). There are also ads inserted with statements sent to customers. The speech recognition option has been available since last December.

Welton explains the system is speaker independent, which means the machine can “tolerate” different pronunciations of the same word.

If for some reason the machinery does not recognize a word, it will “ask” the customer to restate what he or she said. After a couple of tries the customer will be prompted to use the touch-tone pad, but a recording of the unrecognized word will be kicked to a special file. The word or phrase will later be identified and mapped back into the recognition engine so that the machine will recognize the word or phrase the next time. Welton claims the voice recognition system has an accuracy range between 95% and 96%, the same as a flesh-and-blood human being.

The dialogue is directed. Therefore, Welton points out, being polite is not necessary. “The system has no attitude,” he says. “It doesn’t get tired of you.”

Customers, however, have yet to get used to the speech recognition system. So far, the system accounts for 20% to 30% of telephone orders in any one day. (Telephone orders are about a fifth of a day’s total transactions.)

Welton adds that there is a higher use of speech before and after working hours, and more touch- tone during working hours. His analysis is that people don’t want others to overhear their transactions in the office. He also guesses that people will place orders over their cell phone driving to or from work. The system has difficulty with speakerphones.

Welton believes the numbers will build. Customers, he explains, don’t trust speech recognition systems yet. Using the analogy of ATMs in the ’70s-who then was going to trust a hole in the wall?-he suggests that in a short time it may be the preferred mode. At the moment, customers do have the option of transferring out, and five or six a day do.

Right now, E*Trade is using the system for its brokerage and investment services. Welton suggests that the system could be applied to other areas where speech recognition makes sense: for example, moving money or applying for loans.

E*Trade is not the only company using speech recognition interactive voice response. Call Interactive has launched a new service that allows telecommunications companies to get third-party verification for requests to transfer long-distance carriers.

In response to practices and FCC regulations that have grown out of the public’s reaction to such selling methods as slamming and cramming-switching a consumer’s phone service provider without his or her clear consent and adding services without a consumer’s clear consent, respectively-companies that prospect to provide such services now must obtain authorization through a third party. To save time and money, the third party Call Interactive provides is an automated attendant.

According to vice president of marketing Richard Nelson, the system’s script is written so that the customer feels in control. He or she is asked a few questions and, depending upon the answers, can have the new service accepted or declined or can opt out in favor of a live operator.

Nelson feels the automated attendant not only saves money, but also trouble. “The consumer finds it easier to hang up on a machine than on a live operator.”

The system was launched too recently, he explains, to tell what the consumer reaction is. However, some credit card companies are very interested in the results. Credit card companies, it seems, see third-party verification as a way to respond to government and consumer protectionist charges that they lead customers into getting more credit than they can carry.

Nelson also notes that such speech recognition IVR systems do not necessarily mean the end of upselling, traditionally a strength of the live teleservices operator. The system, he explains, can be programmed to transfer likely customers to a live operator or replay pre-recorded messages about special offers itself.

But while many firms obviously seize speech recognition IVR technology for monetary reasons, other companies have different reasons. Interim Personnel and Eicotech Corp., run by Zone Diet creator Barry Sears, find touch-tone trees-allowing callers to press one for option A, two for option B, etc.-effective.

Interim is a 52-year-old firm that has positioned itself as a “human resource solutions company,” according to vice president of marketing Richard Gorman. In addition to finding or placing temporary and full-time clerical and light industrial workers, Interim provides professionals with legal, accounting and financial services, and information technology skills and qualifications. Other services include team and career counseling, outplacement, and staff and vendor management. There are 733 offices in North America, Europe and Asia. Last year, earnings were $1.8 billion.

Fort Lauderdale, FL-based Interim uses interactive voice recognition to pre-screen people responding to its direct response television spots. Prospects across the country answer a series of questions about salary, work, interests and the like by means of a touch-tone tree developed and maintained by FirstCall Communications.

After the information is downloaded and processed, a live operator calls back to complete the application process. The system has handled some 27,000 calls since October, and all callers have to use the touch-tone IVR. Interim’s Web site (www.interim.com) provides the only alternative.

Gorman observes that technical people tend to gravitate toward the Web site, but the majority use the touch-tone IVR. He does not rule out the possibility Web sites may make IVRs of all types irrelevant, if not obsolete, in a few years.

“Who knows what the Web will look like?” he asks, adding that Interim will go wherever the technology is.

For Eicotech, IVR is a quick and cheap way to capture names and addresses. Although an infomercial is being tested, most people learn about Eicotech from its passing mentions in Dr. Sears’ three books, “The Zone,” “Mastering the Zone” and “Zone Perfect Meals in Minutes.”

Despite the lack of “traditional” marketing, Eicotech acquires 500 new customers a week.

The typical customer is female, in her 40s, health and fitness oriented, and not touch-tone phone impaired. Less than 1% of all Eicotech’s callers request a live operator because of the lack of a touch-tone phone. However, two out of three callers request a live operator out of personal preference, says Paul Pruett, operations manager for the two-and-a-half-year-old Marblehead, MA-based company.

In contrast, the Web site (www.eicotech.com) gets 100,000 hits a day, which Pruett describes as “consistently active.” Nevertheless, only 10% of Eicotech’s business is on the Internet.

Pruett also observes that IVRs do not equal the end of upselling in inbound or out-bound telemarketing.

“Our plan is to let people know about our specials and other products in the process of placing the order,” he notes. “We’ll address the issue if it appears to be a problem.”

In addition to Sears’ books and general information, which is free, Eicotech offers Zone Perfect Nutrition Bars and, for the past few months, Zone Perfect Meals.

While IVRs may not promise as balanced a solution for businesses as the Zone Diet promises balanced nutrition for health-conscious customers, advances in technology and increases in consumer acceptance are making interactive voice recognition a viable option for many direct marketers.