IVR services : to charge or not to charge?

Worldwide usage of various self-service systems is rapidly increasing. The trend can be seen in various types of self-service, ranging from ATMs and vending machines to customer support. These services are offered either for free or for small fees. For example, ATM usage is usually free for customers of the bank at hand, while customers of other banks have to pay commission for every transaction they perform.

This simple rule of thumb that most companies tend to follow is not always sufficient to determine whether and who to charge for self-service usage. There are other factors that have to be taken into account, such as what the specific service is about, how much it costs to implement and maintain it and how valuable it is to the customer.

I will refer to a recent situation I recently became aware of as an example. Company A has a competitor, the company B. Company A is deploying a customer care system via telephone which includes both a self-service component for simple, streamlined issues and agents to deal with more complicated situations and fill in any gaps. The managers of the company decided to not charge their customers for IVR usage and start charging a call as soon as it is connected to a live agent (fixed and low amount of charged money – independent of call duration).

The specific implementation is mostly referring to customers that have already been associated with company A, as the system is designed to provide information to these people and allow them to perform some actions. However, a part of the system is providing information for the company’s products. This part could be interesting both for current customers of the company (who might wish to buy an additional product or maybe upgrade their current product) as well as potential new customers.

Company A can distinguish whether a caller using the IVR is a current customer or not. They decide that if the caller is not a customer, they should apply an extra charge for using this system, as most companies do for non-customers. There is a controversy here though: when a company wishes to attract new customers, they typically spend money to do so, via advertising and marketing campaigns. In this scenario, potential new customers that wish to learn about the products are charged for this.

This could very well be a very short-minded decision. Suppose a customer of company B is not very satisfied with their services and considers switching to company A. During their first interaction with company A, where they inquire about the products and their prices, company A charges the customer for this. Is that giving a good impression? To me it would definitely not. Is this policy actually helping in a larger effort to attract new customers? Certainly not. Is the minimal amount charged on each potential customer going to provide more revenues in the long run than getting a few more customers? This question is very hard to answer, because the potential benefits of getting a new customer are not always tangible and the decision making process for consumers is too complicated anyway.

Decisions like this one are not always easy to make. And while in a scenario that each company has a few hundreds or thousands of customers, such “trivial” issues might not have a significant effect, the situation is not the same when the consumer base is several millions.