ATKearney is performing an active watch on emerging new business models in the digital economy. We publish a periodical newsletter for executives highlighting key changes on the move in the media, telecom and consumer industry. It is each time illustrated through a start up example.

1. IMAGINE THE FUTURE
Leveraging innovative business models
24/7 Virtual Agent’s Customer Care
- Newsletter # 6, 2009 -
Context
Lea is the perfect customer care agent. She’s polite, willing to help,
and answers each customer’s question with endless patience. Lea can
handle several thousand customers at the same time, 24 hours a day.
But Lea is not real. Lea is a virtual agent, created by VirtuOz for a leading
online travel agency. Virtual agents interface with Internet users through
a written conversation (chat). By understanding, reasoning and asking
questions to grasp every nuance in meaning, virtual agents aim to deliver
a nearly human interaction.
Innovative technology (example of VirtuOz)
Virtual agent interface
1 Customer request 2 Request understanding 3 Request answer
“Your order
“I have a will be
delivered
problem tomorrow
with my
order
563Y.”
morning.
Did I
answer your
Key Highlights
question?”
A customer chats
with the virtual • Agent “analyses” sentence through • Companies need to manage
agent Natural Language Processing (NLP):
- Syntactic (grammatical) customer interactions more
“Good • Virtual agent
Morning. Do - Semantic (meaning), including proposes a solution effectively, while keeping
you mean alternative and contextual wording
• Virtual agent ensures
that you did
not receive • Agent searches for matches in a database the proposed answer support costs under control
your order?” and proposes reformulated answers to
reach mutual “understanding” meets customer
expectations
• Agent selects a possible answer • Virtual agents “interact” with
customers online via chat and
instant messenger interfaces
Example of VirtuOz value proposition for its clients
to deliver support and sales
information, 24/7. A powerful
• Follow-up • Navigation to site
combination of artificial
• Cross-selling Lead • Help filling forms intelligence and natural
• Up-selling
Loyalty
Generation • Push propositions
language processing
Customer technology (NLP) creates a
Experience nearly human interaction
• After sale • Online quotes
• Customer satisfaction Support & Acquisition & • Sales orders • Virtualagents can reduce
• Problem resolution Assistance Sales • Simulations
operational costs, increase
customer satisfaction, drive
incremental revenue, and
create a differentiated
Business opportunities customer experience
• New customer care channel for: • Over the long-term, this
- Large B-to-C transactional companies with high visitor interaction on natural language processing
their website or into their call centers (e.g., financial institutions, technology paves the way for
telecom operators, e-retailers, travel, hospitality) the upcoming semantic web
- Complex organizations’ websites (e.g., public administrations) (web 3.0) and universal
translator solutions
• New approach to customer care with potential tangible results:
- Enhances customer experience vs. traditional online help
(satisfaction rate: 75%)
- Reduces users’ emails for more answers by 50% (calls up to 20%)
- Increases shoppers’ conversion rate (e.g., +30% for an insurer)
- Increases company's knowledge of customer in real-time

2. VirtuOz profile Application
• Company launched in 2002 in Paris
• Founders: A. Lebrun, C. Cauchois, L. Landowski, P Levy
.
• Offices: San Francisco, New-York, Paris, with 60 employees
• Venture funding: $11.4M equity raised in Q4 2008
• Key customers: e-Bay, SFR, L’Oreal, GDF SUEZ, SNCF, La Poste,
FNAC, PayPal, Neuf-AOL, Coca-Cola
• 30+ virtual agents worldwide available in 7 languages
• 6 million dialogues per month on the VirtuOz hosted platform
A.T. Kearney interview of VirtuOz - Alexandre Lebrun (CEO) & Nicolas Blanc (Sales & Marketing)
• What is VirtuOz’s value proposition for companies?
“Our intelligent virtual agent solutions are powered by a combination of artificial intelligence and natural
language processing technology, which enables a two-way dialogue with customers that seems human-like.
70% of users say “Thank you” or “Goodbye”!
Our main asset is our pool of 30 installed virtual agents. Our agents ‘learn’ from every interaction and get
‘smarter’ over time.
Our unique ‘pay for success’ revenue model mitigates client risk; they only pay for dialogues that are resolved
satisfactorily. Customer success is part of VirtuOz’s DNA.”
• What is the future of virtual agents?
“VirtuOz solutions extend beyond support and service to include agents that can be used for marketing and
guided selling, which drives incremental revenue.
The demand for virtual agents will continue to increase as companies realize their potential. Our virtual agents
manage millions of dialogues per day with a resolution rate that exceeds 85%.
We are currently developing new virtual agents with voice recognition abilities for call centers and hotlines.
They will be able to identify customer needs and segments, and drive them to the most efficient channel.”
Example of alternative offers
Artificial Solutions noHold next IT Corporation
• Founded in 2001 in Stockholm • Founded in 1999 in California • Founded in 1999 in Washington
• Offices: 5 across the world • Offices: 1 (in California) • Offices: 1 (in Washington)
• Employees: 70 • Employees: 10 • Employees: over 110
• Revenues: $4M • Revenues: $5-10M • Revenues: <$10M
• Clients: e.g., IKEA, Airbus, RATP, • Clients: e.g., Logitech, Acer, • Clients: e.g., US Army, Merrill Lynch,
Swedish customs Cisco (Linksys) Air Alaska
About A.T. Kearney
A.T. Kearney is a global strategic management consulting firm known for helping clients gain leading results through a
unique combination of strategic insight and collaborative working style. We serve the largest global clients in all major
industries from our offices located in 35 countries. We have developed a leading Communications and Media practice
with more than 600 dedicated professionals worldwide, focusing on addressing strategic and operational issues of the
Telecom, Media and High Technology industry.
For further information about the A.T. Kearney CHT practice please visit: www.atkearney.com
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This newsletter represents our best independent judgment based on information made available to us at the relevant time. No responsibility or liability will be accepted as to the accuracy or completeness of featured statements.