What is IVR and How to Benefit from Using It? The Ultimate Guide

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Ever thought about how much value automation can bring to your business? Automation has already proven its worth in the customer service sphere. The right solution can increase your profits and make your organization more effective. One such system is IVR (Interactive Voice Response), which helps immensely with increasing the number of returning customers and your ROI.

So, are you ready to learn how can you improve your customer support service by implementing such a system? What does IVR stand for? Let’s dive in!

What is IVR meaning and how does it work?

An interactive voice response (IVR) system, or IVRS in other words, is a phone automated system (automated voice system) that works as an interactive voice menu with various IVR options (menu sections) to choose to get additional information or ask for being linked to a human agent. This works in the following way: a caller presses buttons (0-9,#,*) on the telephone keypad to choose the IVR menu section that relates to the caller’s issue or query. The IVR menu is sometimes called a phone tree because each menu section can have subsections to cover all possible customer inquiries. Also, some IVR solutions have IVR options to recognize the human voice, and this technology is called voice recognition IVR technology, as a part of a more broad technology called Natural Language Processing (NLP).

Here’s how an IVR (Interactive Voice Response) system works:

  • The customer makes a call to your company;
  • The smart IVR system for call center plays a pre-recorded message asking the customer to choose a relevant statement from different options in the IVR menu;
  • Customers can choose the desired option by either typing the corresponding number or repeating the keyword;
  • After the customer selects his desired option, the IVR (Interactive Voice Response) plays the pre-recorded IVR messaging concerning the chosen issue type, or route calls to a customer service representative who is the most relevant regarding the purpose of a call.

Moreover, Interactive Voice Response (IVR) software can not only provide self-service options but also manage call queues and improve the effectiveness of call routing. First of all, Interactive Voice Response (IVR) systems can collect customer data during customer interactions with the IVR software, so this data will be used during the call routing process - the language client uses, the nature of the request, the status of customer (VIP customer, first-time buyer, etc.), and even the status of the request (whether it is a repetitive request or non-resolved one) are delivered by the IVR system to the ACD (Automatic Call Distribution/ Automatic Call Distributor) software to set up intelligent routing rules for this exact call. When it comes to call queue management, IVR software can remind the customer about the estimated waiting time, and queue position of the call, offer IVR options for a callback or the IVR system can offer to switch to a distinct contact channel if needed.

What is the purpose of the Interactive Voice Response (IVR) system?

IVR systems can offer many key benefits for your business. The most common purpose of such a system is to automate customer service, enhance the quality and efficiency of call routing and manage call queues.

This system effectively eliminates the operational costs of a switchboard operator who would answer incoming calls and distribute them between other agents since IVR systems automate such simple tasks completely. IVR systems can also be powerful self-service tools, as IVR options can process numerous customer requests, including common questions, such as changing subscription plans, payments, delivery changes, personal data editing, ordering new goods, and so on. IVR solution can also manage call queues between different call centers (if you use an outsourced call center for non-working hours servicing).

Let’s take one example to illustrate the purpose of an smart IVR system - a movie theater. Supposing, a customer calls a movie theatre to find out the schedule of sessions for a specific day. The system will use the database of a movie theatre to provide the customer with a list of showing scheduling for specific movies. This, in turn, eliminates the call wait times and increases customer satisfaction.

More purposes of the IVR (Interactive Voice Response, IVRS) are:

    • Customer Support Automation. Letting your customers solve their problems without speaking to your agents by interacting with the IVR systems. Moreover, IVRS may provide personalized service using the data from the customer base based on CRM (Customer Relationship Management) system integration.
    • Routing the Callers to the Right Agents. Based on the collected information from the IVR systems, the smart IVR system will route callers to the most skilled agent, who will try to meet their needs and solve their problems. Skilled-based routing is impossible without using an IVR solution because it is the only way to understand the nature of customer queries before talking to a client personally. The parameters for skill-based routing can be chosen based on your needs, they include agents’ experience, specialization (like financial issues, technical issues, and so on), department agents work in, language agents know, results of their Quality Assurance checks (who has higher score can be routed to process VIP clients), and much more.
    • Company Image Improvement. IVR systems are great for startups and smaller companies as they can make them appear much larger than they actually are. You can configure your IVR system to allow people to connect with different departments of your company, which will definitely boost your credibility in your customers’ eyes.
  • Call Queue Management. IVR systems can greatly assist you with managing call queues as they can remind customers about assessed wait times and offer IVR’s callback option as one of IVR options regarding IVR services.
  • Automated IVR calls. Call center IVR systems can send pre-recorded messages as automated calls. You just need to import a contact list and the IVR system will dial each contact with a message you need. Such IVR systems can be used for customer feedback collection, marketing research, customer reminders, and so on. During such IVR call, the IVR solution can offer clients to switch to a real time conversation with a customer service agent if needed.

Benefits Of Using an IVR System

Automation is a powerful thing, and it provides many benefits. IVR systems are great for both large and small companies as it reduces costs and increases overall productivity and profit.

Here are some of the benefits of using IVR systems for your business:

    • Process Automation. You can now leave all of the everyday activities out of the work routine of your agents. With the IVR systems, customers can obtain the correct information more efficiently and get their inbound calls linked to the agents that have a high success percentage when it comes to solving their problems that really need agent intervention.
    • Increase in First Contact Resolution rate. The IVR systems will always direct inbound calls to the most qualified agent who will meet their demands. There will be no need to transfer the call between agents, which also improves the customer experience at any stage of the customer journey and reduces the chance of call abandonment and customer churn.
    • Personalized Interactions. Even though you use a machine for serving your customers, that doesn’t mean you cannot put in some personal touch in the IVRS system. You can easily set up a personalized IVRS greeting or message that seamlessly transfers your inbound calls to live agents. This means clients will be greeted by their names, the IVRS system will understand their preferences, including language, previously contacted agent, statuses of orders, and so on.
    • Unlimited Customer Access. IVR systems are working non-stop, 24/7, all year round. When your team is on holiday or break, the IVR (Interactive Voice Response, IVRS) will keep working in full force to serve your customers.
    • Greater Customer Satisfaction. If your customers get their problems solved in the first run, this leaves an awesome first impression and further strengthens the relationship between them and your business. With IVR systems, you eliminate long waiting times and empower your customers by helping them solve their inquiries on their own. This will make your customers feel more in control, which increases their satisfaction.
  • Customer Data Collection. You can collect customer data with IVR systems both during their calls as the IVR software recognizes the nature of request and other vital parameters and also during automated calling campaigns handled by the IVR solution to gather feedback or process customer surveys, such as CSAT or NPS.

Learn how IVR system for call center works in Voiptime Contact Center solution

IVR advanced features

Let’s describe the main IVR system features as a list, to save your time:

Sophisticated Voice Recognition Technology - a feature to understand what caller is saying and direct calls based on key words said in customer requests, like “I need a refund for order number…” where the system will recognize the word “refund” and direct a call to correct department

Dual-Tone Multifrequency - a technology that allows to lonk phone keypad buttons to IVR menu sections, it is also the most popular technology for use in IVR systems now.

Automated calling - pre-recorded messages sent as automated calls to all customers from the pre-downloaded contact list

Customer data collection - the IVR system collects customer data during interacting with a caller, so it can help you route calls by learning such vital info, as customer’s native language, location, nature of request, customer status, etc.

Call queue management - cloud-based IVR systems can manage queues by offering callbacks, switching to different contact channels, reminding clients about wait times, and so on.

Payment integration - customers can pay for some services by using IVR system.

CRM integration - the IVR system can send customer data to CRM software, or use the data from the CRM interchangeably.

Disadvantages of Interactive Voice Response System (IVRS)

Of course, like every other system, the IVR systems have some disadvantages. Some claim that the IVR system is too detached, serving as a barrier between customers and live agents from your team. Others call IVR systems the main culprit behind fewer jobs for call center agents.

The IVR system also has its limits when it comes to answering specific caller questions. The IVR systems cannot answer every particular question since IVR software only operates within the content pieces that were pre-recorded. This treatment can leave the callers confused and frustrated, which might also affect your performance rates but only in a case when the design of the IVR menus is outdated and isn’t based on real customer questions. To say the truth, the IVR menus that were designed without a wise approach and pre-design research of the target audience are the main reason for hate of IVR systems.

Due to these disadvantages, many companies enhance or completely replace interactive voice response systems with automated voice recognition technology. These technologies have a big advantage; they allow callers to articulate their requests instead of typing numbers from the dial pad.

Of course, all the disadvantages of the IVR system will be minimized as it will evolve over time like every other technology. Nonetheless, the IVR solution with its IVR options can be really beneficial and a win-win solution for both businesses and buyers.

Tips and Best Practices to Improve Your IVR System

You can always improve your IVR system to get better conversion rates from your callers and increase your ROI dramatically. Here are a couple of things you can do.

Research Your Target Audience

Before implementing the IVR software, you should make a customer persona for your specific customers. These are the people who are most likely to use your automated system, so keep in mind their needs. What does this relate to? First of all, you have to learn out your customers’ main problems by measuring the most popular customer queries which are handled by your customer support teams. This is the way you design your IVR menu: put more popular customer queries higher, like for most popular customer issues you should use the first IVR menu sections, which are linked to buttons 1,2, and 3. Moreover, you should also measure customer opinion about your IVR menu and how it meets customer needs.

A Simple Menu is Essential

Make sure to keep your advanced IVR menu options concise - in most cases, the IVR menu of options for nine buttons is too much, but some enterprises may need more IVR menu sections to answer customers' simple questions. So, the rule is simple: try to shorten your IVR menu as short as possible. Also, try to make sure that each main IVR menu section does not have too many subsections in it. Try to shorten the duration of pre-recorded messages too. Don’t waste time trying to automate more complex customer requests, just transfer these requests to your specialized agents.

Improve the Customer Experience of Your IVR With Customer Surveys

It is essential to know the level of satisfaction your customers feel when using your interactive voice response system. Make a survey to obtain feedback from your customers on what they think is great, and what you should improve in your IVR system. Keep in mind that most complaints will probably be subjective, so don’t let them mislead you. Nonetheless, collecting customer feedback concerning IVR systems is vital, at least because the Interactive Voice Response (IVR) systems have gained too much negative reputation because of poor designs made without listening to customers’ opinions. You have to closely measure customer sentiment regarding the Interactive Voice Response systems you utilize, to make changes in design when needed.

Update the design and content in your Interactive Voice Response (IVR) systems

It isn’t a secret that customer issues and popular questions may change sometimes, and that’s why you have to improve and update your IVR systems on a regular basis. For instance, let’s imagine that you are a software developer, and at the early beginnings of your business customers had some issues with setup, so you made “Setup Issues” the first section in the IVR menu. But now, when you have improved your knowledge management systems and provided customers with video manuals, it is no more a problem. So, IVR systems need an upgrade to meet current customer needs.

Let clients skip the Interactive Voice Response systems

The most annoying thing about IVR phone systems is that clients can’t bypass the IVR phone system even when they just don’t want to do anything with it. Yes, there is a huge segment of buyers who hate the IVR technology, and overall IVR telephony, no matter what IVR service you offer. Phone IVR systems contact centers use aren’t always great, and that’s why customers don’t want to use them sometimes, so just provide an option to avoid the IVRS if possible. Yes, it may cause a higher unload on inbound lines and agents, but isn’t customer experience the main priority?

Avoid advertising in your Interactive Voice Response system

Another thing that annoys clients is too much advertising in your IVR technology. Customers hate when you make them listen to ads, especially when they call the IVR call center to get assistance or help. IVR call center technology isn’t designed to sell goods, it is for servicing customers. Try to design your IVR contact center menu to answer customer questions, not to get another advertisement platform for free.

Implement Natural Speech Recognition

Interactive Voice Response (IVR) technology can greatly improve your customer service by providing a conversational response to your callers. You should definitely consider adding it to your interactive voice response system as it will add an additional tonal dimension to your IVR technology. To be honest, the voice recognition system (speech recognition technology) is maybe one of the most effective and modern IVR technologies ever provided, and we can state that this IVR technology will become the only available IVR technologies in the nearest future.

Check our article with the most common mistakes the companies make with IVRS (Interactive Voice Response Systems) and ways of preventing them

Conclusion

An interactive voice response system (IVRS) can provide a lot of benefits to your business. First, it will save time and money for your business, as you will eliminate routine work and solve problems for your clients with greater efficiency.

What’s even better, you can make sure that your customers will finish the call with a smile on their faces. You will also notice that your ROI will increase after implementing such a system.

Lots of businesses still don’t use IVR, even though the benefits are obvious. You can use it to gain a competitive advantage, but keep in mind that such a system has its drawbacks too!

IVR system can’t be beneficial without a powerful contact center software tool that will help you to handle both inbound calls and outbound calls, handle workforce management and get deep insights into your performance metrics.

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Eugene Siuch

Content Manager and Copywriter

Focused on customer service measurement and improvement, SaaS marketing and industry insights, and researching different methods of staff motivation and performance management in the field of customer service providing.

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