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Interactions banks $6.3 million more for call handling service, plans growth in Franklin

Posted by Scott Kirsner  July 19, 2010 07:30 AM

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interactions.jpgIVR is an evil acronym: it stands for interactive voice response. Most times you call an 800 number with a question about your credit card bill, or a problem with your laptop, you're dealing with an IVR system that asks you to speak a phrase or punch a key to get one step closer to an answer — if all goes well.

According to Mike Iacobucci, chief executive of Franklin-based Interactions Corp., people forced to interact with an IVR system report being satisfied about 18 percent of the time. That's one of the reasons that Paul English, co-founder of the travel Web site Kayak.com, created his GetHuman site: it's a list of short-cuts on major IVR systems that will connect you quickly to a live human being.

Interactions wants to bring a human back into the equation — but they don't actually want the human to have a real-time, back-and-forth conversation with you. Instead, they use human beings listening to snippets of speech as a kind of air traffic controller, ensuring that you get the information or answers you are looking for. It's a way of applying human understanding to your needs, while keeping the cost of handling the call low. The company, previously headquartered in Indiana (and originally founded in New Jersey in 2002), moved to Franklin, Mass. after Iacobucci was hired as CEO last year. Iacobucci replaced founder Michael Cloran. (Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out.)

Today, the company is announcing a new round of funding (a $6.3 million series D), bringing its total raised to $36 million.

"We're trying to create a really human-like conversation at a call center or on a Web site," says Iacobucci, who was recruited to the company by Boston-based Sigma Partners, one of Interaction's investors.

When he joined last January, Iacobucci says the company had a few early customers, but was struggling. "We totally redesigned the software and infrastructure," he says.

How does it work? Human operators (the company calls them "intent analysts") sit at a computer wearing headphones. They hear snippets of speech from a caller — "some jerk stole my wallet this morning and I need to cancel my credit cards" — and without responding verbally, click on the screen to direct the caller to the right pre-recorded voice response. For security and efficiency reasons, the same intent analyst doesn't handle the entire call; that way, they don't hear both your phone number and Social Security number, for instance, and while you are speaking your account number or listening to a response (like the address of a service center near you), they can be directing another caller to the right information. Iacobucci says many of the intent analysts are young, and they tend to be avid gamers with fast reflexes. They earn a higher hourly rate based on their speed and accuracy. Iacobucci says that some surveys have found that callers report a higher satisfaction rate when they've dealt with Interactions' system than speaking with a traditional live operator.

You can listen to some sample calls on the company's Web site.

Iacobucci has been hiring executives and building out the office in Franklin, including a CFO (Joesph Gildea), CTO (Yoryos Yeracaris), and head of professional services (James Nolan). He expects that Interactions will employ as many as twenty people in Massachusetts this year, in addition to offices in Carmel, Indiana and Austin, Texas.

As far as off-shoring the call analysis to bring down costs, Iacobucci writes in an e-mail: "...We've tested in low-cost labor markets overseas. But to date we've found a good, available workforce in the States (we've created jobs here), and our clients like — and some are requiring — U.S.-based labor. It's an option down the road as we expand."

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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