Interactive voice response (IVR) is an automated phone system that allows your customers to choose from voice menu options and interact using voice and number pads. When customers call an organization’s customer service number, they hear a recorded voice asking them to choose from a series of options, like language or department. The IVR system then directs the caller to the appropriate representative or lets the customer complete tasks themselves. By combining computing with phone technologies, IVR software reduces call center wait times, improves customer service workflows, and increases customer satisfaction.
What are the use cases of interactive voice response?
You can use an interactive voice response (IVR) system as a cost-effective way to service high call volumes. IVR technology can resolve frequently asked questions and complete basic tasks without a live agent. Customer representatives can prioritize complex interactions even when call volume is high.
Here are other use cases where IVR is a good solution.
Automatic call distribution
You can use IVR solutions handle call volume automatically. For example, an IVR system can give customers the option to wait in a queue, request a callback, or choose an automated service. It can also distribute calls uniformly across representatives for improved efficiency.
Caller identification
Several customer services workflows, like finance or healthcare, require caller identification before the representative resolves the call. When people are responsible for this, it can take longer and also introduce potential security risks.
Instead, the IVR solution can obtain caller line identification data—such as passwords, PIN codes, account numbers, or biometrics—to authenticate the caller. Then, it routes the call.
Customized service
You can use an IVR system identify and segment callers for improved customer service.
For example, a system can move premium customers or urgent inquiries to the front of the call queue. It can direct inquiries to the right department or representative. And it can collect information from the customer and present it discreetly to the agent to improve the agent’s service delivery.
What are the key benefits of interactive voice response?
Interactive voice response (IVR) systems bring several benefits to an organization’s call centers.
Better customer service
IVR solutions provide self-service options, so your customers can resolve common issues themselves. They also obtain relevant data and route calls efficiently, which increases the first contact resolution rate. In addition, call filtering and segmentation reduce wait time and help you provide efficient service at scale.
Reduced operational costs
IVR systems reduce costs for you by easing the workload of customer service agents. You can use IVR systems to extend service outside business hours like nights, holidays, or weekends without additional costs.
Large organizations can reduce costs by using a single IVR system to handle call flow for multiple applications. You can customize IVR menu options for each application to scale in a cost-effective way.
Increased security
Advanced IVR systems identify and authenticate customers, which adds additional security measures for sensitive use cases. They limit access to confidential data until a customer identity is validated.
Customer service representatives can also switch between directly working with customers and using automation for confidential requests. For example, instead of asking the customer for a password, they can transfer them to the IVR software for password checks. The system verifies PIN codes and passwords without human involvement.
Improved analytics
IVRs keep a log of call detail information for performance reports, auditing, and analytics. This helps you can enhance future interactions. You can analyze the call logs to improve IVR menu options, shorten communication paths for frequently asked questions, and identify customer service barriers.
For example, if many customers hang up the call after three or four IVR interactions, you can consider redirecting them to a live agent sooner.
How does interactive voice response work?
Interactive voice response (IVR) works by using computer-telephone integration (CTI) technology.
Sophisticated computing components, like natural language processing, combine with telephone technology that can interpret and understand dual-tone multi-frequency (DTMF) signals. DTMF signals are the two simultaneous low and high-frequency tones that every number on a telephone keypad emits. For example, number one produces both a 697-Hz and a 1209-Hz tone.
The software combines this telephone technology with computing to make IVR work.
Here are some of the components in an IVR system.
Telephone network
The IVR integrates with a regular public switched telephone network (PSTN), so incoming calls route over phone lines. It also works over a voice over IP (VoIP) network, so you can receive calls using the internet.
TCP/IP network
The IVR uses your regular corporate network to connect with the IVR application server or contact center software. You can also use cloud-based IVR, which routes calls between your phone system and the cloud over your network infrastructure.
IVR application server
The IVR application server contains the software for functions like DTMF signaling recognition, text-to-speech, speech-to-text, and other voice recognition technology. This server also includes software that communicates with your core application.
For example, if customers call in to check their flight status, the IVR server communicates with your flight application to answer the call automatically.
Cloud contact center solutions let you access this IVR functionality as a fully managed service.
What are the types of interactive voice response workflows?
Your call center administrators can design interactive voice response (IVR) interactions or call flows from within the IVR software. Traditionally, call flow design used an XML-style markup language. However, modern IVR systems have a graphical user interface with drag-and-drop functionality for easy setup.
There are three main approaches to IVR menu design.
Touch-tone replacement
Touch-tone replacement focuses on dual-tone multi-frequency (DTMF) signaling alone.
Prerecorded messages prompt the caller to respond by pressing the appropriate number on the phone keypad. For example, the prerecorded message may say, “Press one for English or press two for French.”
Touch-tone keypad selection use cases are limited to numerically mapped options. Users can’t freely interact with the system by answering questions verbally.
Directed dialogue
Directed dialogue-style IVR menus provide a set of predetermined responses to the user.
For example, the system may ask the user to say “flight status” or “flight time.” The IVR system continues the interaction only when the user speaks one of the valid responses. Otherwise, the IVR prompts the user to repeat their words or repeats the automated greeting.
Natural language
Advanced IVR systems use speech recognition and natural language processing to understand user requests.
For example, the system prompt could ask, “What can I do for you today?” And the caller may reply with “I am looking for flight status information” or “I am looking for the cheapest flights to Japan.” The IVR system has the required grammar set and capability to extract critical information from various customer response permutations and combinations.
Despite the more significant data processing, IVR systems based on natural language are more efficient as they resolve calls within a few short options.
