How Does IVR Work?

This article provides a brief overview of Interactive Voice Response (IVR) technology, and how it can help businesses increase customer satisfaction and reduce operational costs.

People love when they have someone there to help them out, and this support will have a big impact on your company's success. When customers feel supported and valued, it's one of the most important success factors for your company.

When your call volume grows, it's critical to provide a personalised touch. To accommodate your growing consumer base, you'll need to think of practical solutions. Maintaining a high call volume is a desirable problem to have. Things just takes a little delegating to get it done right. An Interactive Voice Response (IVR) system is one method for accomplishing this.

What is Interactive Voice Response (IVR)?

IVR is an automated phone system with call routing capabilities. Simply put, it allows customers to interact with a computer before (or sometimes instead of) conversing with a representative. This technology works in tandem with Automatic Call Distribution, typically found in a call center.

IVR phone systems have become so widely used that you’ve probably found yourself communicating with a virtual assistant over the phone more times than you can count. IVRs manage inbound phone calls by collecting information about the customer inquiry before automatically transferring the call to the right department. It can tailor the conversation even based on the virtual phone number the person dialed.

Typically, customers are presented with a prerecorded voice menu as soon as they call. After navigating the menu either verbally or manually (using the phone keypad), the customer is automatically connected to an agent who can help. We’ll cover some other significant advantages of IVRs in a moment.

How Does IVR Work?

Even the most basic IVR solution saves time and money by trimming hold times and requiring less workforce. That said, more advanced systems deliver an even better experience for the customer.

Basic IVR Systems: There are two primary components of IVRs that enable the computer to understand and process the caller’s requests. One is voice recognition technology, and the other is called Dual-Tone Multi-Frequency signaling (or DTMF). DTMF signaling occurs between the phone and the computer when callers use the keypad on their phone to select menu options. This touch-tone technology allows intelligent call routing to take place without a human operator.

IVR platforms with voice recognition capabilities enable what’s called Directed Dialogue, which means callers can give verbal responses instead of using the keypad to navigate the menu. For example, an IVR menu might say, “For billing, press three or say ‘billing.’”

Advanced IVR Systems:

As IVR technology develops, advanced systems make the customer’s IVR interactions increasingly more natural, faster, and more enjoyable. Among the most customer-friendly advancements is in Natural Language Processing software (or NLP), which is a form of conversational AI.

Thanks to this sophisticated voice recognition technology, the computer can understand and process full sentences rather than limiting the caller’s word choice by recognizing only particular commands. An IVR with built-in NLP can answer open-ended questions such as “what can we help you with today?” As you can imagine, callers appreciate this conversational approach to customer service because it gives them more freedom. It’s also a much faster way to navigate the IVR because callers can get to the point right away.

Let’s explore some of the reasons why an IVR is a game-changer for your business.

Benefits of IVR Systems:

First and foremost, IVRs offer the core advantage of an automatic filtering process. Instead of reaching into a grab bag every time they pick up the phone, agents get an idea of what type of issue they’ll be tackling before they answer. This type of call is based on which menu items the caller selected.

Meanwhile, the caller benefits from speaking with an agent who’s prepared to answer their questions. This means bypassing the time-consuming and frustrating process of being manually transferred by agents from one department to another before speaking to someone who can help. While the customer avoids being put on hold multiple times on the same call, your business avoids the hefty costs associated with unnecessarily long call handling times. In other words, it’s the ultimate win-win.

Increase Credibility:

The first step to improve your customer experience is to implement business phone service with an auto attendant. Overnight, you will increase the trust and credibility of your brand. IVRs are an excellent way to improve brand image because they present a consistent, welcoming, and on-brand greeting to every caller before they reach a representative. This comes across as organized and professional, which boosts credibility in the eyes of customers. It also sends the message that your business is equipped to handle a wide range (and high volume) of customer calls.

Self-Service Customer Service:

Speaking of consistency, an IVR allows you to serve your customers even when agents aren’t available. Callers can access basic information outside of regular business hours or while agents are busy handling other calls via your phone number and an IVR menu. If you think setting up an IVR means throwing all personalization out the window in the name of efficiency, think again. Advanced IVR systems incorporate biometric capabilities that recognize customer numbers and answer accordingly. Anything from scheduling an appointment to acknowledging the caller’s birthday can be accomplished without the assistance of a live agent.

The advantage of your customers interacting with a computer before speaking with a live agent is that a computer is built to collect, process, and store high levels of information. The data that your IVR collects about caller's inquiries is not only valuable for your business strategies in general, but it can also be used to continually improve your IVR setup. IVR systems supplement market research and lower costs by eliminating the need to hire more agents.

IVR Recommendations:

IVRs have emerged as one of the most effective ways for small businesses to lower costs, lighten the load on their staff, and deliver a better customer experience.

Recommendations for Setting up an IVR:

Move your phone system to the cloud. Make that easy to navigate internally and externally. If you have an on-premises PBX, consider moving it to the cloud to unlock massive new functionality—like an IVR. Align your experience for the customer journey. Align your phone system to serve current and future customers so they get in touch with the right people on your team.

Empower callers to reach a live person. Nothing upsets someone more than getting stuck in a phone menu. Provide a helpful path to reach a live agent so your IVR advances your customer experience.

If you’re a business leader, you never stop searching for ways to make improvements. An IVR enhances your brand image in every possible way and also provides a top-notch customer service experience to everyone who engages with your business. If you recognize these items from your checklist, an IVR platform would be a huge step to achieve your business goals.

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