What is IVR (Interactive Voice Response)?

Interactive Voice Response (IVR) is a technology that allows the caller to quickly and easily navigate to the right person via the phone's keypad. It creates a better customer experience and lowers the cost per call. Find out all about the technology and the advantages of IVR.

What is IVR?

A voice response system or IVR (Interactive Voice Response) is an automated telephone system that combines pre-recorded messages or so-called text-to-speech technology with a dual-tone multi-frequency (DTMF) interface. In simple terms, this means that customers who call can get help without having to speak to an employee. The phone system recognizes the keys pressed on a physical phone or virtual keypad, allowing a customer to navigate through menu options and thus end up in the right place.


Have you ever dialled a bank's inbound call number? You probably got voice instructions on navigating through the dial pad. That is a classic example of how an IVR system works. Pressing a particular item on the menu redirects you to another item. The IVR can offer an automated message or route the number to a recipient. 


According to a study by Salesforce, 75% believe they get the fastest response time if they call a company.  That's one of the many reasons why 61% of customers still prefer to speak to someone over the phone when they need help. 

8 advantages of using IVR

1. IVR enhances mobile customer experiences

Interactive voice response systems provide a customised customer experience because the caller can easily connect to the right contact person simply by pressing a button instead of being routed through several people. Some voice response systems are so user-friendly and self-service-focused that customers can solve problems independently. If the problem can be solved effectively, the customer will likely be loyal to the company. A study by Forbes shows that 58% of customers are willing to pay more for great customer service, which says a lot. 


2. Routing the caller to the right agent or department

Different agents specialise in various services, and talking to one caller agent might not be helpful. Traditionally, a call would be passed among multiple callers before reaching the right one. Not many clients love the traditional method as it is costly and time-consuming.

IVR systems are programmed to help you connect with the right agent or department. It gets your customers to the agents most qualified to meet their needs. For example, a business banker performs different tasks from a teller. Therefore, calling a teller to inquire about issues with business banking might not yield the best results.

Customer service representatives often specialise in different parts of the company's services, so not everyone can help with every problem. Customers who are passed on between different people before they end up in the right place are usually more dissatisfied with the treatment. For example, if you call the bank for help with business services, you don't want to end up with junior employees without the proper experience.

That is where voice response systems come in: they can be programmed so the caller can navigate to the right person or department. These 3 smart keypad options, for example, make it easier if you're using IVR.

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3. Expanded call capacity with interactive voice response

Companies that use IVR systems can handle more calls than those that work traditionally. These features open up a world of automated responses that allow customers to solve their problems without speaking to a human. Automation of responses opens up your call agents to a broader call capacity.


Some simple queries, such as opening time, price inquiry, etc., don't need the help of a call agent. Well-programmed voice response systems make things easier for both customers and companies.


4. Creating a better company image

How companies handle incoming calls is hugely important to the customer experience. An interactive voice response gives callers a great first impression of your business. If you have a small business or a startup, voicemail can help you appear more extensive than you are. It also shows that your company takes customers seriously by being reliable and available. Also, the automated responses solve customers' queries without contacting an agent. The business sets itself high on the customer's pecking order with prompt solutions and responses.


5. Unlimited customer access with IVR

With interactive voice responses, your customers can reach your business conveniently. The best thing about IVR is its 24/7 availability. Whether it's office hours, weekends, or holidays, customers can access responses without needing employee availability. The IVR systems are always available at the customer's disposal, which they love. According to Smart Insights, 88% of customers frequently use IVR to solve their queries.


6. Empowering call agents to perform at their best

Voice response systems are not only great for customers who get by with automated assistance but also an advantage when they need to talk to a real person. The system gives the staff time to focus on the calls they receive and solve the problems faster and in the best way possible.


Because well-programmed voice responses connect customers to the person with the right skills, staff can respond with reassuring expertise to callers. When it comes to accessibility for customers with disabilities, such as impaired vision or hearing, voice response is a flexible and vital solution.


7. IVR improves first-contact resolution

A PBX without IVR risks sending customers the wrong way or even disconnecting them. A lack of organization can be disastrous in large companies with a lot of staff. Interactive Voice Response that intelligently connects customers to the correct contact on the first try simply brings happier customers.


Reducing time-to-resolution, how long it takes to solve a customer issue, is an integral part of contact centers. IVR systems use intelligent routing features to connect customers with the most capable agent on the first attempt. This connection reduces the time taken to confer with different agents. IVR ensures the customer query is solved faster with minimal wait time and consequently higher customer satisfaction, meaning you not only reduce time-to-resolution but first-contact resolution.


8. Lowering the cost per call

Typically, calling business numbers is more expensive than ordinary mobile numbers. The pinch of the high call rates befalls on customers, some of whom end up disconnecting calls due to a lack of adequate airtime. Dropping calls means that some customer queries might end up unsolved, which might hurt your business.


An IVR sends calls through in less time compared to the traditional method. Also, linking up callers with the right agent means less time will be spent on the line. Customers save even more when they get solutions through automated responses. Learn more about how IVR reduces your costs.

The Bottom Line

If you want to revolutionise your workspace, look for an efficient interactive voice response that best suits your business. By doing so, you will be setting the pace for effective customer care. The call center is integral to your business, and investing in the best technology makes it even better.

Frequently asked questions

1. How does IVR integrate with other customer service technologies?

IVR systems integrate with other customer service technologies through APIs and webhooks, allowing for seamless connections with Customer Relationship Management (CRM) systems, live chat tools, and other communication platforms. This integration enables the sharing of customer information across platforms, ensuring a coherent and personalised service experience, and allows IVR to direct callers to the most appropriate service or support channel based on their needs.


2. What are the latest advancements in IVR technology?

The latest advancements in IVR technology include the integration of artificial intelligence (AI) and natural language processing (NLP) capabilities. These technologies enhance voice recognition accuracy and enable more complex interactions with callers, allowing IVR systems to understand and respond to a wider range of queries. Additionally, some IVR systems now feature predictive analytics, which anticipates customer needs based on historical data, improving the efficiency of call routing and personalisation of services.


3. How do businesses measure the effectiveness of their IVR systems?

Businesses measure the effectiveness of their IVR systems using several key performance indicators (KPIs), including call resolution rate, average handling time, customer satisfaction scores, and call abandonment rates. Analyzing these metrics helps businesses identify areas for improvement, such as menu navigation clarity or the need for additional options. Surveys and feedback collected directly from customers after their IVR interactions also provide valuable insights into the system's performance and customer satisfaction.

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