What Is an Interactive Voice Response (IVR) System?

Uncover the basics of IVR technology and its role within customer service experiences

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What is an Interactive Voice Response (IVR) System?
Contact CentreInsights

Published: February 25, 2022

CX Today Team

IVR is one of the sturdiest, battle-hardened elements within the contact center ecosystem. Customers dial in, hear a pre-recorded message, follow the IVR navigation menu, select their preferences, enter a call queue, and pass through to a live agent.

However, the customer does not always reach an agent. Sometimes, the contact center deploys a self-service mechanism within the IVR to automate their query. More often, the IVR messaging answers their question.

All of this sounds simple. Yet, it is tricky to get the deep, nested structure of the IVR correct. In addition, self-service design and IVR messaging involve many layers of hidden complexities.

Get this wrong, and customers will experience a miserable beginning to their customer service journey. However, operations that get it right will enjoy the many benefits of an efficient, streamlined contact center.

Interactive Voice Response (IVR) Definition

IVR stands for interactive voice response. It is an automated telephony system that plays recorded messages to customers, tracks their responses, and passes them through to agents.

Customers respond to the messages by pressing a number on their phones. Following their selection, the IVR detects why customers call and routes them to an agent whose skillset aligns with that.

However, over time, the IVR has become more sophisticated. Self-service features, call-back options, and visual interfaces for smartphones are some of the most interesting IVR innovations.

Thanks in part to these advancements, the IVR remains a stalwart contact center tool. In fact, as market analyst Technavio estimates, the global IVR market will rise by $2.61 billion between 2020 and 2025. Such growth is mightily impressive, considering the long history of the technology.

IVR Functionalities

The modern IVR system offers many functionalities. Typically, these include the ability to:

  • Relay pre-recorded messages to guide customers through pre-set navigation options
  • Track metrics such as how long customers have to wait, queue position, etc.
  • Personalize customer greetings based on caller ID information
  • Match a customer’s preferences with available agents
  • Record customer responses for polls and post-call surveys
  • Process speech data for analytics to understand customer sentiment and grievances
  • Reduce customer frustration by playing soothing hold music and relaying announcements
  • Allow customers to register their preference for a call back if there is a long wait
  • Automate simple, transactional queries through self-service (integrations are crucial here!)
  • Deflect smartphone calls to digital channels such as online self-service and live chat

A final, cutting-edge functionality is to share personal messages with customers. Integrating the IVR with the CRM facilitates this, allowing contact centers to relay birthday messages, reminders, and more relevant announcements to individual customers.

How to Set Up an IVR

While some contact centers still harness on-premise solutions, most have migrated to the cloud. As such, this majority will likely follow the steps:

  1. Log into the contact center software as an admin and navigate to the IVR module.
  2. Set up navigation/routing options for each dial pad button.
  3. Type a message to be converted into audio and/or input any greeting music you want to play.
  4. Repeat the process for each navigation/routing option to set up multi-level IVR.

Depending on the vendor, this process may vary. Some may also provide a PSTN-based IVR solution.

However, many providers will also promote voice bots as a replacement for the IVR. Such technologies have an exciting future and will likely become more commonplace in contact centers over the next five to ten years.

Discover more about the promise of voice bots by reading our article: The Future of Voicebots: Much More Than an IVR Alternative

 

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