IVR: (Interactive Voice Response) What Is It, Services & Benefits

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IVR, which stands for “interactive voice response,” is a type of automated phone system that lets callers interact with pre-recorded messages or text-to-speech technology through a dual-tone multi-frequency (DTMF) interface and offer and get information without the need for a human agent. The interactive voice response decisions are made by the caller’s selections; it may offer information or, if the situation is more difficult, direct callers to a human agent who can better meet their needs. Read further for more explanation of the ivr concept, services, and benefits.


In the 1990s, Moviefone made use of IVR technology in one of its most well-known and effective applications. Movie fans had to ring in and offer their zip code to acquire a list of surrounding theaters, the movies showing there, and their screening times. The internet wasn’t as available back then.

Interactive voice response program development is currently going on. Natural language processing technology has increased the number of ways that callers can now communicate with computers over the phone. Modern Interactive voice response software enables callers to verbally communicate their wants over the phone rather than using a touch-tone system.

Interactive voice response systems improve the customer experience by giving customers a way to get the information they need without calling customer service. Also, it lessens the number of calls that contact centers receive, which decreases wait times and operational costs for companies.

Benefits of IVR

IVR technology aids organizations in their automation efforts and gives them competitive advantages. Among the principal advantages are:

#1. Improved Customer Service

Without clients, no company can prosper. Thus, it is critical to provide a positive consumer experience. According to several studies, 48% of customers say they prefer to call customer service to fix their problems. Furthermore, there is a much higher probability that the issue will be resolved on the first call because they are speaking with the right person.

#2. Client Access at Any Time

Customers can use Interactive voice response systems at any time, while office hours, vacations, and breaks limit and define the availability of people. At any moment, including beyond regular business hours, they can contact your contact center and use your interactive voice response systems.

Customer service is thus available anytime a customer needs it. An IVR system provides unrestricted access to a basic level of customer care, however, a live representative option is still necessary for more complicated support inquiries.

#3. Increased Customization

IVR systems’ high level of customization strengthens client relationships. Individualized greetings for known callers can be set into each IVR system. This is feasible if caller ID data is accessible or if the IVR is a component of a bigger cloud phone system with a CRM connection.

Also, you can record any custom greeting you want and add the prompts needed to transfer callers to the right departments.

#4. Make Your Business Look Better

Even if your business is smaller and doesn’t necessarily receive the volume of calls that necessitates IVR technology, it might still be useful to have. Due to the fact that one receptionist would be unable to handle the volume of calls, an IVR gives the impression that your business is enormous.

#5. Higher Company Profits

The telephone is used for the majority of commercial interactions and deals. Many businesses still use the traditional method, in which live operators answer customer calls directly.

IVR cuts down on staffing costs and frees up your support team’s time by giving you the option of a virtual operator and receptionist. In addition to meeting the needs of your clients, this encourages more efficient resource management.

Also, since the interactive voice response system will work even when there are a lot of calls, you’ll always be able to meet customer needs and make them happy, which will increase customer retention (and therefore profits).

#6. More Productivity

It takes less time to direct callers to the correct departments or staff members to handle their particular needs, which saves time spent talking to coworkers to discover the best solution or moving the caller until they receive what they require. Customer discontent is greatly influenced by time spent waiting on hold or being transferred from one department to another; therefore, you should try to minimize it.

#7. Error-Free

High call volumes deplete call center staff, resulting in long wait times for misrouted users. This may have a significant impact on your customer service experience. When directing a customer to their destination, using the IVR system’s automated routing makes it much less likely that you’ll make a mistake.

Limitations of IVR

IVR technology still has issues that need to be optimized for, despite the advantages it can bring to businesses.

#1. Overly Complicated IVR Menu Options

Interactive voice response technology can make it easier for call centers to handle calls, but it can also annoy callers if the automated messaging system is too hard to use. Long pre-recorded messages may force callers to wait longer than necessary to choose the option they want, which makes customers less happy.

#2. Extended Hold Times

Extended hold times are a concern for many IVR systems, despite technological advancements. When a customer care agent is unable to handle a caller’s request right away, callback functionality can help reduce annoyance by allowing customers to get on with their daily activities.

#3. Impersonal Communication

When clients call a support line, they can already be feeling extremely aggravated by a problem with a good or service. Due to a recording’s inability to understand their current issue, an automated messaging system could make them feel even more frustrated.

High call abandonment rates and dissatisfied customers might result from improperly implemented IVR systems. Businesses should be careful when implementing IVR solutions because bad reviews and complaints from the general public on social media about bad customer service can hurt a brand.

How Does an IVR Work? 

When a customer calls a contact center, the IVR is what they see first. A prerecorded message will welcome the caller and then provide them with a list of menu options, according to the IVR. As an illustration, users will be instructed to push 1 or say “Service” to be connected to the service department, 2 or say “Sales” to speak with someone in the sales department, and so on.

You can gather more data before taking action with the help of interactive voice response solutions that allow multilayer menus. For instance, a sub-menu can ask about the specific product the customer is contacting about if they choose the service department. This enables the IVR to route the call to a certain team that deals with that product.

Automatic call distribution (ACD) solutions are frequently used in conjunction with IVR. Callers are prioritized and placed in a queue by ACDs using data gathered from the interactive voice response and call metadata before being sent to the next available agent who is best able to assist the client as soon as feasible.

What Is IVR Examples? 

connect your Ivr to your internal systems to help customers handle simple requests on their own. The IVR automation benefits both parties: customers receive speedier customer service, and you save time by freeing up your support team. Ivr can assist you in automating frequent tasks, as seen in the following examples:

  • Check the balance of your account. IVR provides customers with the most recent account balance.
  • Verify the status of the order. To check on an order’s status, customers submit specifics.
  • Search for products. Telephone callers ask for product information.
  • Pay a bill. IVR apps don’t require call center agents to get account information or receive credit card information.
  • Change or set PINs. The PIN for their account or card can be set up or modified by the customer.
  • Consider surveys. At the end of a call, modern IVR systems allow for consumer feedback.

What Is IVR Verification? 

IVR verification is a biometric authentication method used during phone calls, primarily with call centers. It adds an extra layer of security to a channel that mostly depends on people and is therefore vulnerable to fraud caused by social engineering. Fraud can happen without IVR verification by using stolen client information to answer security questions. One of the few, if not the only, biometric techniques available to call centers is IVR verification. Voice recognition is easier for customers to use than identification based on what you know, and it takes less time to talk to customers, which makes call center procedures better.

Where Is IVR Used? 

IVR systems have several applications. Automating inbound, outbound, and call routing are the two uses that are most frequently made use of. The following are other ways that organizations can use IVR systems:

  • Simple order input transactions, 
  • Call center forwarding, 
  • Office call routing, 
  • Selective information lookups are some of the services offered.

The use of IVR systems to streamline procedures in other areas is also possible, albeit in more complex ways.

  • Sales. Using the use of a phone keypad, IVR systems let clients fill out sales order forms. After that, a salesman receives the finished form from the computer.
  • Marketing. IVR systems can be used by marketers to send surveys to customers to determine their interest in a given commodity or service.
  • Medical reports. With an IVR system, doctors can have a copy of the transcribed records emailed to the office while also transcribing patient notes.

What Is Another Word for IVR? 

IVR is sometimes referred to as a voice response system or phone menu.

How Do Banks Use IVR?

Banks use IVR in the following ways:

  • IVR is a tool used by banks to stop fraud. One of the main worries in the banking sector is mobile security. Clients virtually request sensitive data including account passwords, credit card information, and more.
  • IVR is a tool used by banks to deliver critical updates. Some of the exchanges between bank employees and customers are unpleasant. For instance, it may be challenging for both parties to inform customers that they have an overdraft.
  • IVR is used by banks to respond to routine inquiries from their clients. Consumers constantly want to speak with banks. People frequently forget their passwords, accidentally lock their accounts, or have second thoughts about their loans.

Those who like phone calls would appreciate the opportunity to contact and promptly resolve their issue. Nevertheless, having live representatives on site isn’t economical, as we’ve already stated. The ideal choice is automated voicemail.

  • IVR is used by banks for surveys at the end of calls. It is essential to measure client happiness and service in order to improve them. Organizations can learn from surveys what they are doing well and what needs to be improved.

Banks can use an IVR system to ask their callers a brief but valuable survey on their experience at the end of the call.

  • IVR is used by banks to provide secure and urgent information.

Timing is of the essence for anyone who has misplaced or accidentally blocked a credit card. Banks can use an IVR menu to direct their clients to their solutions rather than having them visit the branch or wait a long time on the phone to talk with the appropriate employee.


A good IVR software solution can help customers feel happier as well as improve contact center operations and KPIs. An efficient interactive voice response system can help minimize hold times by assisting consumers in self-serve task completion and information retrieval, especially during periods of heavy call volume. IVR technology can help direct calls quickly and efficiently to the right call center staff to handle a customer’s inquiry in situations where they need or request to talk with a person.


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