What is IVR and how can it benefit your business in 2022?

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“Hey, thank you for calling us. For inquiry, press ONE. For payment-related information, press TWO. For issues with your account, press THREE. To directly speak to the customer support executive, press FOUR.” 

Have you ever called a service provider and been greeted with an automated voice that says something along the aforementioned lines? Well, if you have, then you know what an IVR is. If you are a service provider and experience a high call frequency then an IVR system is crucial to have, as it helps you build a strong relationship with your customers. A happy customer acts as an ambassador for your brand and promotes your business, thereby attracting more customers along the way. This is how maintaining a strong relationship with your customers can benefit you, big time. In this article, we will cover everything you need to know about Interactive Voice Response and tell you how it can be beneficial for your business. 

What is IVR? 

IVR stands for – “Interactive Voice Response”. It is an automated business phone system that possesses call routing capabilities. When a customer calls a business, the system gathers information about the inquiry of the customer and transfers the call to the department in which that inquiry fits best. So, the customer is greeted with a prerecorded message, and the customer is then required to manually navigate through the options with his/her phone keypad. If the inquiry isn’t resolved through the available options, then the call is routed directly to a customer service representative who then personally takes up the issue. 

If you look closely, you’ll realise that an IVR is a system that is designed to boost the productivity of your customer support team. Just imagine that there are a hundred people calling your business everyday and you have 2 people on your team who handle those calls. How can you expect those two people to respond to every single call? That is when an IVR system comes into play. With this system, the customer spends some time with the menu, and in such cases, customers get to navigate a menu and get answers to their queries without having a customer service executive helping them right from the initial stage. This saves the time of your resources and they can focus on only resolving selected queries that the customers aren’t able to handle through the menu presented to them. 

Based on the choices of the customer, the IVR system routes the call to a specific department. Depending on what the caller chooses from the prerecorded menu, he/she will be directed to the department to have the query addressed. 

Fun fact: By the year 2024, there will be around 8.4 billion digital voice assistants, which is more than the world’s population. 

Use of IVRs 

Since the inception of Interactive Voice Response systems, there have been significant technological advancements, which have further broadened the use cases of IVRs. earlier, IVRs were only used to organize the vast ocean of calls that were received and handled by call centers. At present, IVRs have taken greater form and are now used to automate processes by giving the option of self-service to the callers. This has further reduced the calls that the agents need to deal with manually. 

Typically, IVRs can be used to: 

  • Access account information
  • Search for product information
  • Fill up surveys 
  • Inquire about account balance 
  • Transfer funds  

How to use IVR for payments?

Here are some steps to follow to enable smooth transactions for your customers: 

  1. Direct the customer to the payment line of the IVR system.
  2. Allow the customers to choose from a series of prompts based on the nature of the transaction.
  3. Prompt the customer to enter the reference number.
  4. Have a look-up enabled to check the information entered by the customer.
  5. Present the customer with the payment gateway and prompt him/her to enter the credit card details.
  6. Offer confirmation through voice/text.
  7. Send transaction ID and status of the payment on the online portal.

What role does IVR play in customer experience?

There is no doubt in the fact that a positive customer experience is central to the success of your business. To be able to provide a superior customer experience, you need to have all hands on deck, not just in terms of your resources but also the technologies involved. If any customer approaches you for the first time and is greeted by your IVR system, it is imperative that you ensure to start that relationship on a positive note. Here are some things that can work for you:

  1. Allowing customers to find answers to their own questions
  2. Matching the customer with the correct agent (specific to the required department)
  3. Enabling speech recognition (best for visually impaired customers)
  4. Handling calls even on holidays, week offs, and post business hours
  5. Integrating the system with different apps
IVR Types

Why do you need an Interactive Voice Response System? 

  • To provide 24X7X365 customer service

As a business owner, you must ensure that your customers are attended to at any time of the day, at any day of the year. An IVR system can help you achieve the same, which will ensure round-the-clock service in the absence of human agents. So on your days off or odd timings, the prerecorded audio will be at the service of the callers. 

  • To improve the FCR rate 

First Call Resolution is important to ensure good customer service, thereby ensuring that your customers’ queries are resolved in a timely manner. For the same, you need to develop an IVR flow that directs the customer easily towards the resolution of the query and minimise wait time. 

  • To handle call spike 

If you’re struggling with the high volume of incoming calls, then you need an IVR system to streamline calls. This system will divide the calls into two parts, one wherein the customer is able to resolve the query by himself by navigating through the menu, and the other wherein he is connected to the customer support agent to resolve the issue. In this manner, the queries that can be resolved without the involvement of human interaction will be not of concern to your team as the system handled it. 

  • To automate operations 

With an intelligent system by their side, your agents will be able to take up priority issues, which will not only help them keep pace with the volume of incoming calls and resolve queries. This will help enhance their productivity as well. 


Benefits of IVR

If you are a small business, then having an IVR system by your side can benefit you in a lot of ways mentioned as under: 

a. Enhanced ability to handle excessive calls 

Customer support is an important component of providing excellent customer service, but that cannot be done at the expense of overloading your agents with a large volume of calls. You need to have a meaningful solution in place to reduce the burden on the part of your agents, avoid missing calls, and bring in efficiency in operations. Nothing is worse than a scenario where your agents are bombarded with calls that they cannot handle. That’s simply sacrificing the quality of customer service and risking your reputation. An IVR system is a solution to avoid such a scenario. 

b. A better brand image 

Imagine you are a customer and you dial a business, inquiring about some payment-related information. But the toll-free number you called connected you to the technical department. Now the agent on the other side handles only technical issues and not payment-related issues. Naturally, he will give you another number to dial. What has happened here is that your issue hasn’t been resolved. Now you have to dial another number and talk to another agent, explaining the issue again. Imagine the frustration. Had there been an IVR system in place, you would have easily been directed to the concerned department and had your query resolved. An intelligently developed IVR system demonstrates how you, as a business deal with your customers. That automated voice is what creates an impression on your customers, it is the voice that makes sure that all their needs are being taken care of. 

c. Real-time engagement with your customers

An IVR acts as a powerful customer engagement platform, allowing you to keep your customers close. A well-designed menu that offers seamless navigation to the customers to self-resolve their queries and allows them to connect to agents in the case of complex issues, ensures that your customers are involved with your business one way or another. 

d. Increased customer satisfaction

If you provide services in the form of a self-help tool that can easily solve issues and resolve queries without the involvement of a customer support agent, you are offering a seamless experience to your customers. When the customer can reach out to the concerned department by pressing a couple of buttons, then it means that your IVR system is guaranteeing customer satisfaction. Avoiding hassle is what everyone aims at, and you’re doing exactly that by transforming your customer engagement processes. 

e. Reduced human error 

It is true that to err is human, but you as a business cannot ruin your relationship with your customers. With a well-equipped IVR system, all the calls will follow a sequence of programmed audio messages that will play as the customer calls your business and chooses the preferred option. With a human agent, the chances of making wrong judgment calls are higher which is where IVR can take up the responsibility.  

How does an IVR system work? 

IVR process

What is an IVR Menu?

The IVR menu is the response system that assists customers in navigating the IVR experience. Based on the way it is programed, the menu can either offer navigation through the touch tone dialpad or voice. It is also known as a phone tree that has multiple branches, depending on how deep the IVR has been programmed.

Challenges faced by businesses pertaining to IVR

  1. An overly complex menu: One of the most common mistakes that businesses make is creating a menu that is unbelievably lengthy and highly complex. Why would a customer want to go through a lengthy process to have his query resolved? To ensure a seamless process, businesses must simplify the menu as much as possible to avoid confusion and frustration on the part of the customer. 
  2. The absence of an agent early on: Not all customers have the same mindset. While some people don’t mind pressing a few buttons and exploring their options, some customers do not want to go through that process and want a live agent to address their issue right away. So, when such customers are greeted with a pre-recorded voice the moment they dial a business, they are thrown off at that very moment. 
  3. Lengthy hold times: Another issue that persists is a lengthy wait time. This can happen when calls are routed to live agents, but those live agents are busy dealing with other customers. No one likes to wait in queues as it is time-consuming and simply unnecessary. 

Best practices for IVR and things to avoid

To make sure that the customer engagement experience is seamless, here are some of the top tips that you can follow. This is more directed towards making certain improvements in the design of your IVR system. 

  1. Offer a language option other than the primary language. This will make the customer more comfortable while going through the options and will thereby enhance the customer experience.
  2. Always provide the customer with an option to chat with a live agent. Sometimes the customer might not feel like navigating through the menu and might want to directly connect with the representative. Make sure you provide such an option.
  3. Humanize the IVR experience for the customer as much as possible. Make sure that the voice assistant doesn’t sound like a robot. Add a bit of human touch to those pre-recorded audios. 
  4. Announce call recording only in the case the call is being transferred to an associate. Do not make such announcements repeatedly during the call. 
  5. Simplify the main menu options and keep them for a duration of 30 seconds. This will make the IVR experience for the customer more efficient. 
  6. Only give instructions when the customer makes an error during the process. Do not include instructions unnecessarily as it will only confuse the customer. 
  7. Make sure that the information given by the customer is already recorded so that he/she doesn’t have to repeat everything when connected with a live agent. 


> What is an IVR Call Flow?

It is the projected inputs and prompts that you want your customers to make before they reach an agent. It assists the callers to reach their preferred department. 

> Who can use an IVR?

An IVR is an ideal solution for every small business. Irrespective of the industry, any business can use IVR. Right from identifying accounts to providing product assistance, from confirming appointments to routing sales calls; businesses can benefit from IVRs big time. 

> What is a smart IVR?

A smart IVR is a system that adapts to the real-time responses of the callers. As opposed to a linear menu, the smart IVR offers a more natural communication with the customer. 

> How much does an IVR cost? 

Typically, an IVR solution costs between $0.02 and $0.10 per minute.

> What purpose does an IVR serve? 

Reducing the volume of live calls for the agent, reducing average handle times, and enhancing customer experience are the three core purposes that IVR serves. 


All in all, an IVR system is an excellent investment to make if you are looking forward to reducing costs, resolving issues quickly, and improving customer engagement and satisfaction. If you don’t have an IVR system yet, then it is time that you design one and transform your customer engagement journey. 

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