What Is IVR?

IVR or Interactive Voice Response is an automated phone system with call routing capabilities. It answers incoming calls and prompts customers to interact with a pre-recorded message or series of messages, taking them to the appropriate business department based on their response.

IVR also has an important self-service function for relatively straightforward processes such as checking an account balance or paying rent and parking fines – all without waiting to be put through to a human agent (who may or may not be the right person to handle the call).

Whether the caller is routed through to an agent or not, IVR shortens hold times and enhances customer satisfaction. The immediate advantage for businesses is that they need fewer call agents to handle customer inquiries.

How Does IVR Work?

Customers are greeted with a pre-recorded voice menu once on the line. After navigating the prompts either verbally through voice recognition or manually with the phone’s touch-tone keypad, the caller is automatically transferred to an agent who can help with their inquiry. A major source of customer discontent is to be put through to the wrong person, or even a succession of agents who are ill-prepared to address their specific issue; one of the functions of IVR is to make this problem disappear with a triage system of questions.

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There are two types of IVR: single-level IVR and multi-level IVR. A single-level message might ask the caller to press 1 for customer service, press 2 for payments, press 3 for technical support, and so on. A multi-level IVR will drill down to the specific issue by asking further questions based on the caller’s successive responses to the prompts in the multi-level menu. The challenge for multi-level IVR is to keep the “phone tree” as simple and direct as possible while probing as deeply as the needs of the business require.

What Is Conversational IVR?

Advances in speech-to-text capabilities, Artificial Intelligence and Natural Language Processing are making it increasingly feasible to phase out multi-level IVR menus with voicebot conversations. The technology in this space is progressing at an astonishing pace, making voicebot interventions much more versatile and effective. With the help of Machine Learning, businesses can continuously analyze and optimize Conversational IVR to improve customer interactions.

As people familiarize themselves with the question-and-answer protocols used by smart speakers in the home, they will increasingly welcome and expect to interact with voicebots in their customer inquiries.

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What Are the Benefits of IVR for the Customer?

The biggest advantages of IVR from a customer’s point of view is reduced holding time and higher first-contact resolution. Simple queries such as a bank balance can be resolved almost immediately, and at any time of day. IVR does not keep office hours but is helpful 24/7.

Customers also appreciate personalization such as a level 1 menu question about the language they wish to speak. Integrations with customer relation management systems can help push personalization to the next level.

With each technological advance, the bar is set higher for customer expectations. IVR menus that are poorly designed, repetitive, or have unsatisfactory outcomes will lead to customer frustration and therefore damage your brand.

What Are the Benefits of IVR for the Business?

A professionally executed IVR system will reflect well on the business and reinforce customer loyalty. Businesses need fewer call center staff while the money saved can be reinvested to upskill existing agents. IVR is not there to cut corners but to increase customer satisfaction.

IVR gives call center staff the time to resolve more complex customer issues, even when call volumes are peaking. This improves staff performance and morale.

IVR also reduces human error. A receptionist or call agent might be overwhelmed with high call volumes, or simply make a manual error in routing a call. An IVR system handles every call with the same logical sequence, eliminating the need for judgment calls which are at the roots of many handling errors.

The only judgment calls essential in IVR are those involved in setting up the system and constructing the sequence of prompts

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