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What is IVR?


IVR stands for Interactive Voice Response. IVR systems allow callers on inbound calls to interact with a phone system via touchpad and, in some cases, speech. These systems use this interaction to collect information about calls and direct callers to the appropriate services. They can also provide answers and information in a variety of formats.

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How does IVR work?

IVR solutions consist of a number of different components, including telephony equipment, software applications, databases, and the infrastructure to support these structures, which include servers and a TCP/IP network. They can be installed in-house, or call centers can subscribe to hosted IVR services.


These systems feature a menu of options for callers to choose from, and pre-recorded messages for use with different call situations. When a caller contacts a contact center, the IVR system plays those messages as needed, allowing callers to respond. Keypad signal logic is also implemented to interpret caller input (and in more advanced systems, speech recognition software helps with the same task, letting customers speak directly to a computer).


To provide suitable information and/or direct calls appropriately in response to caller input, the systems also need to have access to relevant and stored data. Thus, they are often coupled with CTI systems to help them pass calls to human agents, who can then see relevant caller data on their screens.

What is IVR used for?

Interactive Voice Response is most commonly used to automate inbound and outbound calls, removing the need for a switchboard operator and letting human employees focus on calls that require more critical thinking. This often means that callers can quickly get access to common information without needing to wait for an available call agent.


Examples of IVRs put to this use include:


  • Balance information and transfers for bank and stock accounts;
  • Office call routing;
  • Simple order entry transactions;
  • Selective information lookup.



However, there are a number of other ways that IVR solutions can be used:

  • Filling out sales order forms;
  • Sending out marketing surveys that can be answered by phone;
  • Transcribing doctors’ notes and patient records and sending copies to the office.


What are the benefits of using IVR?

The chief advantages of IVR systems are threefold:

  • They save time and reduce costs,
  • They provide greater customer satisfaction,
  • They allow for some measure of round-the-clock service.


By eliminating the need for human workers to do the rote tasks of answering common questions and routing calls, IVRs can save call centers money. Similarly, because such systems can provide commonly requested information to a large number of callers at once, IVRs reduce hold times and call queues so that customers spend less time on the phone. As a result, call center agents use less of their time on simple tasks and are thus free to focus on those situations that do require human capacity for critical thinking.


Whereas human employees must have time for rest, meals, and leisure, automated IVR systems remain online 24/7. So even when a business is closed, customers can obtain the necessary information and answers to requests—and, in cases like the above-mentioned bank and stock transfers, they can even perform certain operations themselves without even needing to speak with a call service agent.



Do IVR systems have any disadvantages?


For all the benefits IVR systems enable, there are some drawbacks. After all, they remain machines with a limited repertoire of possible responses and capabilities. As a result, they can feel a little impersonal, no matter how good a voice actor you hire to perform the pre-recorded messages. However, as AI and voice recognition technologies advance, it is likely that we will see increasingly flexible, responsive IVR systems that are appropriately catered to the customer journey.


IVR can greatly improve the quality of your business’ customer service. Through this technology, contact centers can appropriately assign complex calls to human agents while routing more routine requests to automated messaging. These measures reduce wait times and can boost unique and positive customer experience.

Contact centers may integrate IVR systems into their work operations in order to reduce costs and boost customer experience. Through IVR, call centers can decide whether to allocate routine calls and requests (bank balance information, review transactions) to a voice messaging system while escalated cases may be handled by experienced human agents to ensure customer satisfaction.