Inside the Confusion Index

Posted by: Steve Hamm on April 29

Business process outsourcing is a tough businesses. You take over somebody else’s mess, straighten it out, improve processes with Six Sigma, etc., add a sprinkle of technology—and then the customer relentlessly squeezes the profit margin out of you. The hybrid American/Indian BPO specialist 24/7 Customer is trying to escape the commodity service trap. Its answer: algorithms.

24/7 does call center, online support, and back-office work. Over the past year and a half it has been gradually building up an exertise in data mining analysis. The main project concerns on-line chat. Working with a leading Net retailer that specializes in overstock merchandise (whose name can't be uttered), 24/7 came up with a system for turning confused shoppers into buyers, which it calls the confusion index.

The company analyzed shopper behavior on the site to see which products caused the most confusion. It mapped out the geographical locations where people who tend to get confused live. And it charted the times of day when the largest number of people tend to get confused. (One sure sign of confusion is when a shopper looks at an item, reads reviews, goes to checkout, but then returns to get more info about the item.) Armed with this information, and more, they set up a system for keeping watch real-time over what's happening on the site, spotting people who are confused, and assigning employees with the appropriate expertise and just the right selling skills to approach confused customers via an online chat offer. "We match the 'hot' agent to the 'hot' customer," says 24/7's chief marketing officer, V. Bharathwaj.

As a result of this work, 24/7 has been able to more than double the client's conversion rate for turning shoppers into buyers. It now has six additional clients for this type of service.

It's also applying algorithms to outbound phone sales operations, a process it calls "predictive dialoging." It analyzes potential customers according to attributes such as demographics, past purchases, and location--and targets them with the right offer at the right time of day. It also matches each potential customer up with an agent who has the right gender, personality, and sales approach.

24/7 has created a lot of intellectual property around these services. Instead of turning it into a software product and licensing it, the company packages the software capabilities with its services. "It's IP plus services. We own the results," says Bharathwaj.

This is the kind of innovation that any BPO company is going to have to produce if it hopes to build a profitable business over the long haul.

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