IVR Systems: The Past, Present, and Future

The evolution of the contact center IVR system

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Contact CentreInsights

Published: January 3, 2024

Rebekah Carter

The customer service landscape is home to many different crucial technologies, and confusing acronyms, from “ACD” (Automatic Call Distribution), to “CCaaS” (Contact Center as a Service). For many, the term most commonly associated with the traditional contact center experience is the IVR.

Even if you’re not a contact center agent or leader yourself, you’ve probably interacted with an IVR before. If you’ve ever had to speak to a robot before talking to a person, or press a number to be routed to the right department, you’ve dealt with an IVR.

While this technology might not seem as exciting in a world filled with generative AI and transformative tools, IVR systems still form a crucial component of the contact center. In fact, by 2032, the market for IVR technology is expected to reach a value of $9.99 billion.

However, the effective IVR solutions businesses use today are a world apart from the ones we once knew. In an age where exceptional customer experience is key, it’s time to rethink the IVR.

The Evolution of the IVR System

An IVR (Interactive Voice System) is an automated telephony solution that interacts with callers on the behalf of businesses, collects information, and routes calls to the right recipient. The early days of IVR systems began in the 1970s, when they were initially used to automate routine tasks like collecting basic information from callers, and connecting them to agents.

While IVR technologies still perform these functions today, they’ve grown far more advanced in recent years. In the past, many traditional IVR systems suffered from significant drawbacks. They forced customers to navigate complex menus, and made it difficult for businesses to create bespoke, intelligent experiences. Now, the digital transformation of the contact center has changed all this.

“As the customer service landscape evolves, so does the role of the IVR system. Intermedia redefines the traditional IVR, providing businesses with improved efficiency, enhanced experiences, and personalized solutions. With features like extensive customization, secure self-service automation, omnichannel routing, AI, and natural language processing, we empower businesses to create tailored IVR journeys. Our forward-thinking IVR system is a strategic asset for businesses thriving in the ever-changing landscape of customer service,” said Larry Brown, Sr. Director of Product Management for Intermedia.

IVR technologies, provided by the right vendors, can transform your entire CX strategy, introducing benefits such as:

  • Improved efficiency: IVR systems are one of the most common forms of contact center automation. They streamline routine service inquires, and help to ensure customers can always reach the right agents for their specific needs.
  • Enhanced experiences: IVRs improve customer experiences, by connecting them to the best agent for their needs as quickly as possible. They can also enhance employee experiences, by reducing the number of low-level queries and tasks agents need to handle.
  • Solutions for personalization: IVR technology can help companies learn more about the customer journey, and deliver more personalized levels of service to customers. This leads to quicker, more meaningful interactions, and better customer satisfaction scores.
  • Self-service automation

The Key Features of a Modern IVR Solution

For virtually every customer-serving business, an IVR is a critical tool for managing and handling customer interactions. However, modern solutions include features and capabilities that make them far more valuable to the CX journey. Such as:

Extensive Customization and Omnichannel Routing

Today’s intuitive IVR solutions don’t have to be one-size-fits-all. With the right software, companies can create their own personalized IVR solutions to suit different requirements. You can build comprehensive IVR journeys for each member of your target audience, and customize everything from the IVR welcome message, to the message customers get when agents aren’t available.

What’s more, companies can determine how their IVR solution will route calls, according to their CX goals. Intelligent routing solutions can allow IVR systems to direct customers to agents based on their sentiment, intent, or customer profiles. You can route customers based on the skillsets of employees, or their availability. There’s even the option to create comprehensive omnichannel routing flows.

This means you can not only distribute calls among your team members effectively, but manage interactions via SMS, video, social media channels, and more.

AI and Natural Language Processing

Traditional IVR systems often relied on “dial tone” systems which required customers to press a button on a phone to choose the service they wanted. Now, AI-infused systems can understand and respond to a customer’s voice. Natural language processing and speech recognition capabilities allow machines to listen to the verbal responses of a consumer, and forward their call according.

More advanced systems can understand longer phrases and more complex requests. This minimizes the risk of a customer accidentally being routed to the wrong department. Some contact center and communication providers offering intelligent IVR systems can also provide access to additional, AI-powered tools. For instance, generative AI solutions can summarize the initial conversation a customer has with a bot and share it with an agent for context.

The same solution can record and transcribe the rest of the conversation automatically, ensuring agents can easily upload valuable information to a CRM or database.

Flexible Contact Center Capabilities

Modern IVR solutions can integrate with a variety of contact center tools and platforms to give companies new ways of engaging, converting, and delighting their audience. For instance, with solution providers like Intermedia, companies can combine intelligent IVR capabilities.

Some IVR systems can be infused with conversational analytical tools, that can provide insights into a customer’s sentiment, or collect data for further analysis into the customer journey.

Reporting tools can even help companies make intelligent decisions about how to better structure their IVR menus, or create agent schedules that address the fluctuating levels of demand on different channels. With end-to-end integration capabilities, IVR systems can even help enhance your customer journey mapping, and profile creation strategies.

Rethinking the Future of the IVR System

Interactive Voice Response, or IVR systems have formed a crucial part of the contact center toolkit for decades. However, its only in recent years that these solutions have begun to transform to meet the changing needs and expectations of companies, and their customers.

With an intuitive, customizable, and AI-powered IVR solution, businesses can not only improve the customer journey and increase satisfaction scores. They can also boost employee engagement and efficiency, enhance productivity, and reduce operational costs.

Artificial IntelligenceCCaaSCRMInteractive Voice ResponseNatural Language Understanding

Brands mentioned in this article.


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