Thank you for calling….This call may be recorded….

Do automated PBX systems save companies money? Let’s take a close look at that myth, because that’s what it is.

Automated PBX systems became popular because they made it possible for businesses of all sizes and types to eliminate at least one employee. They justified this staff position elimination based on the salary and benefits of that position, or positions if it is a large company.

Computers and robots do not get pregnant or call in sick, some managers proclaimed! So that qualifies as a justification to deny a livelihood opportunity? Is this a great country or what?

I am not a luddite, and this is not a rant against technology. But over the last few decades, we are hopefully learning that technology can be unwisely deployed, and I am going to present a mathematically based argument that automated PBX systems are an example of quiet failure that is not acknowledged by hardly anyone yet. I hope I can make a few readers rethink that.

According to Indeed.com, a popular online job posting site, in the community this writer resides this position receives an annual salary of $34,250 per year. Add a 31% employee benefits cost on average to that salary and this brings a total annual cost to a company of $44,900.00.

Hello, again, internet! How much does an automated PBX system cost for a company with 100 employees? When I searched for this answer, I learned that a typical investment is about $75,000.00, amortized over five years that results in an annual cost of $15,000.00 per year. On the surface, this would suggest an annual savings to the company of about $30,000.00 per year! And that is if only one staff position is eliminated.

How much does the business quietly lose in sales because the caller was not able to connect to a live person? Before I get to that, let’s review a benefit comparison between those two options.

There is only one perceived benefit that the corporate bean counters favor. That being lower cost, and that is not even necessarily correct. The problem with the supposed efficiency argument is that the efficiency measurement is focused on the wrong side of the ledger. Are you thinking efficiency to the company, or efficiency to the caller?

The company thinks they are buying efficiency because they believe the call is being routed to the correct destination without the assistance of a human. But the caller must often listen to a maddingly long menu of options to reach that destination. And another important consideration that I have not mentioned yet is that some company PBX systems provide the option to dial “0” which still provides human contact. So, after all that trouble and expense, there still needs to be a human call attendant.

Net benefit for the robotic PBX: not much.

What are the benefits of a call being answered by a human? Many, and each one stands alone as justification. The positive public image the company gains by having a warm voice on the other end of the line accrues much good will over time. The efficiency is greatly improved in both directions, meaning the caller and the call receptionist.

The call receptionist can be trained to be a fount of helpful information for the caller and sometimes eliminate the necessity for passing the call along to another member of the staff. If that is not the case, the call receptionist will prevent the frustration of the caller accidentally selecting an unhelpful forwarding number necessitating having to go through the entire process again. The call receptionist can promote positive impressions of the company by having a warm and pleasant phone demeanor that makes the caller feel good about the contact. In summary, the call receptionist can contribute to making the caller a company advocate, save the caller and staff a lot of time, improve the potential of the caller becoming a profitable customer, and consequently reduce cost and increase profits.

Net benefit of having a human receive calls: customer good will, potentially greater sales and profits.

When we look at the comparisons between the robotic PBX and a skilled human, one is inclined to ask, “What were we thinking when we decided we believed this is a good application of technology and automation?” The short answer is, we weren’t.

Now, let’s look at the unrecorded loss potential created by automated PBX systems. That is not easy to tangibly verify, but the hypothesis supported by some estimates should be revealing and even disturbing.

I formulated some illustrative numbers earlier in this essay. In summary, a theoretical savings of $150,000 spread over five years per discharged staff member was estimated. The reason for using a term of five years is the probability that a company will likely need to reinvest in new PBX technology in that time frame, aside from considering the possibility of enough growth to require system expansion. Let’s match that hypothetical savings amount against a possible loss of sales that may come from callers being frustrated and put off by the robotic PBX they are expected to interact with.

Let’s presume that Apex Company, who manufactures and sells $100 widgets at the business to consumer level. They sell directly to an individual end user. These individuals call a toll-free number to talk with someone in the company about the product. They have questions to be answered before they make a purchasing decision. They do not have a specific contact name or number which makes it necessary for them to call the published number. When they do, they hear:

“Thank you for calling Apex Manufacturing. We are pleased to hear from you and are dedicated to providing you with excellent service.

This call may be recorded for training purposes and to improve our service to you.

If you know the extension of the party you are trying to reach you may dial it at any time.

For an employee directory dial 1.

For information about our products dial 2.

For business hours dial 3.

For information about our policies and procedures for delivering products dial 4.

For accounts payable dial 5.

For human resources dial 6.

To check on the status of your order dial 7.

To request a catalog of our products dial 8.”

I’ll stop at 8, but it would be easy to keep going. And no matter which number the caller selects, it may take them down another rabbit hole of choices. I have even experienced these systems getting stuck in a closed loop. There often is no option to leave a message, and even when there is, the call may never be returned.

My question for you to ponder is, how many instances are there in which the caller just hangs up?

Let’s estimate 30 times per business day a caller abandons their effort to reach someone.

Next, let’s assume that 50% of those callers intend to make a purchase of at least one unit at the earlier mentioned price of $100.00.

This totals the loss of $1500.00 per day in sales.

This amounts to income losses of $360,000.00 per year.

The company thinks it “saves” $150,000.00 over five years by eliminating the staff person.

But over that same five-year period, lost sales totals $1,800,000.00.

In this example, the company will likely never know they forfeited that much income due to getting rid of someone who answers the phone. If that person were still on the job, would all those lost sales have been realized? Let’s admit we cannot know that for certain. But what if half of them would have been realized because a pleasant and competent employee had taken that call and made certain the caller was immediately and pleasantly served?

I believe that this story portrays an example of technology being poorly deployed and the promised benefits of it are grossly overstated. Not every company in America has surrendered their business viability and reputation to this misuse of technology, but far too many of them have. It has taken an immeasurable negative toll on the entire notion of customer service.

Would you like to see a return of pleasant human voices on the other end of the phone line when you need service or to meet a personal need? I know I would.