A single, simple question.

Recently, I called my bank to ask a single, simple question about my mortgage. Predictably, I was greeted by an automated recording, which proceeded to do all of terrible things we’ve come to expect of voice-activated phone systems (known in the industry as Interactive Voice Response, or IVR). After repeating my request multiple times, spelling out my account and social security numbers and sitting on hold for just over 10 minutes, I was transferred to a human being, in the wrong department, who began by asking for my account number. Thirty minutes later, after navigating yet another IVR system with an equally infuriating interface, I finally found myself in touch with a human who could answer my question.

This kind of experience is so commonplace it hardly bears mentioning—we’ve all had dozens or even hundreds like it—and yet IVR systems persist as an almost universally despised service touchpoint. They’re a great liability to almost any service-oriented brand, which also makes them an opportunity: if a company wants to improve or maintain their brand experience and build customer loyalty, there’s hardly a better first step than getting rid of automated phone systems altogether.

For an example of how this can work, consider my other bank. This is a bank I’ve been with for decades and truly love. I can call this bank on the phone at any time during business hours and get an actual human being within one minute. Not only has this practice earned my loyalty, it prompts me to refer them to friends on a regular basis. As a form of new customer acquisition, it’s extremely cost effective.

Every other option is better.

This used to be standard operating procedure, of course. Long before IVR existed, all phone service was handled by humans. After listening to your needs, these humans would transfer you to the appropriate department if they could not solve your problem themselves. But in the mid ‘90s when the technology became more cost effective, it quickly became an aspirational target for practically every corporate call center.

Companies implementing IVR sought to kill two birds with one stone, saving money operationally while making it ‘easier for the customer’ by directing them to right location, instead of shuffling them from person to person. And while the companies may have seen monetary savings, the more important part of the equation failed.

Image (cc) via Flickr user Tesscha Makkala

Today, consumers have other options, and they’re all superior. With this incredible tool called the World Wide Web, I can take care of almost any informational transaction that previously required in-person or phone support. In today’s world, it’s more than likely that a customer on the phone is calling because a) they can’t access the internet or b) there is a problem. Neither is a situation that can be solved with an automated response.

If companies that use IVR recorded customer interactions for ‘quality assurance’ the way they record human phone interactions, they could learn an awful lot. The level of anxiety and frustration that customers experience before actually encountering a human makes the actual conversation that much more difficult, and tends to put the service representative in a defensive mode as soon as they pick up the phone.

In 2009, MadTV ran a spoof of a man talking to an automated voice system so advanced it verges on psychic, yet still manages to do nothing more than frustrate and insult him. It’s an extreme expression of a common perception: if the technology is so good, how can it still be so useless?

There are even specific websites dedicated to avoiding IVR systems. DialAHuman is one example, a crowdsourced website that provides detailed instructions on how to shortcut automated systems to gain access to a live service rep. For some companies this is straightforward—simply press ‘0’ or say ‘representative’—but for others, it’s not. Fidelity Net Benefits, for example, requires that you press 1 and then hit the # key 17 times.

“Making you talk to a machine is nuts.”

Many companies are working to rectify this. Ally Bank (launched in 2009 by GMAC) launched a campaign in 2011 called “People Sense” that used improved live access as an example of “doing what is right for the customer.” The campaign’s flagship ad addressed the frustrations of talking to an automated voice system head on, culminating in a stark statement: ‘Making you talk to a machine is nuts.’

In 2012, Ally ran another ad stressing the importance of 24/7 human support, in contrast to the automated systems used by larger competitors. The results have been heartening. “Our customer satisfaction scores and deposit growth show that our approach is resonating with customers,” said Diane Morais, an Ally Bank deposits executive. “As some banks are restructuring their fees or eliminating products and programs, Ally Bank is committed to providing our customers with the features and services they want and depend on.”

Another example is the ‘Jake From State Farm’ campaign, highlighting the importance of human interaction at your fingertips. Launched by insurance company State Farm in 2011, it was a switch from discount-focused direct response ads to one focused more on its roots, service. The fact that both campaigns have run for so long demonstrates their resonance with customers and ability to generate positive financial returns.

Companies need to operate efficiently, of course, but must also recognize that some efficiencies have unforeseen costs. To begin with, they should consider how customer frustration impacts their bottom line, not just when it results in a cancellation or missed sale, but also in the more common case of negative word-of-mouth, through conversation or social media. The converse is also true: a moment of crisis that’s quickly and humanely resolved can turn casual customers into brand loyalists. Many will happily advertise on your behalf. Missing this opportunity means leaving money on the table.

A channel of last resort.

Many companies have made great strides in the past few years to make service representatives more accessible via online text or video chat, which is a welcome improvement. In some circumstances and for some customers, though, there’s still no substitute for the telephone. With the growing use of hands-free headsets, many people (myself included) leverage morning and evening commutes to ‘take care of things’, and this means talking on the phone. Some other customers are visually impaired. Millions of people have no reliable internet access, either because they live in underserved rural areas, haven’t caught onto the technology (elderly users especially), or simply can’t afford it. Together, these “exceptions” constitute a large fraction of your potential market, making the telephone a key consumer touchpoint that you can’t afford to shortchange.

The good news is that web- and mobile-based automation for common transactions is getting better everyday, and most customers are happy to use it. The return on investment of this kind of technology is tremendous, and a digital interface that’s designed to be frictionless earns goodwill and brand loyalty every time customers use it.

Unlike in the past, customers making phone calls today either have a problem to solve, or have no other choice. Chances are they don’t want to be talking to you, and this is what ultimately makes IVR so damaging and inappropriate—it’s designed for an era when customers called in by choice, not as an option of last resort. Today, you’re much better off embracing phone contact for what it is: one of the only opportunities you have for person-to-person interaction, and a unique brand-building opportunity. More than ever, it deserves a human voice.