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Interactive Voice Response (IVR) 101: Everything You Need to Know

Simply put, an Interactive Voice Response system, or IVR, is a technology that enables businesses to interact with customers over the phone using a computerized system. This system can be programmed to handle a variety of customer interactions, ranging from simple inquiries to more complex transactions.

What is IVR system?

IVR, or Interactive Voice Response, is an automated business phone system feature that interacts with callers and gathers information by providing them with options via a menu. It then takes action based on the caller's responses via the telephone keypad or voice response.

The caller's choices determine the IVR's actions — it either provides information or, if the issue is more complex, routes callers to a human agent who can better handle their needs.

If you've ever called a business phone number and been greeted by an automated greeting that then interacted with you via a pre-recorded message, you've encountered an IVR.

What is the use of IVR system?

IVR is typically used by businesses or call centers to route calls based on the preferences made by the caller. These options determine whether the caller wants to contact the technical support team, the billing department, or a human operator.

Interactive voice response also delivers information such as promotions, updates, or other critical information or instructions.

One example is informing callers that the system will record their calls and ask them if they want to continue.

Traditionally, it was only used to organize call center queues. IVR systems, on the other hand, have come a long way since their inception. Now, businesses mostly use them to automate simple processes to provide callers with self-service options. This is to handle simple customer needs and inquiries typically handled by call center agents.

There are plenty of uses for Interactive Voice Response (IVR) across industries. Here are some of the significant processes IVR can perform:

  • Inquire about the balance of your account.
  • Account information accessing
  • Change passwords or set PINs
  • Find information (product price, directory, etc.)
  • Completing lead forms and surveys
  • Make small payments or fund transfers

How does IVR work?

IVR, or Interactive Voice Response, is a fancy way of saying businesses can use a computerized system to talk to their customers over the phone. Consider it a virtual receptionist who is always available to assist.

Let's look at how Interactive Voice Response works!

When you call a business that uses IVR, you will hear a pre-recorded or computer-generated voice that will provide you with a list of options. For example, you might hear, "Press 1 for account balance, 2 for account transactions, and 3 for credit card services." This allows you to quickly obtain the required information without waiting for a live person to answer the phone.

But IVR is more than just dialing numbers. It can also understand and respond to your voice. It employs natural language processing and voice recognition to allow you to speak in your own words and phrases. It's like having a conversation with a humanoid robot receptionist!

Organizations often integrate Interactive Voice Response (IVR) systems with other technologies such as CRM, databases, and AI-based natural language processing.

What are the benefits of IVR

This system can be programmed to handle a wide range of customer interactions. It includes everything from simple inquiries to more complex transactions.

One of the most significant benefits of IVR for a contact center is that it can help to reduce the number of calls that need to be handled by live agents. By providing customers with the option to use an automated system, IVR can help to route calls to the appropriate department or agent, reducing waiting time and improving the overall customer experience.

1. Better customer experience

The goal of IVR, or Interactive Voice Response, is to make things easier for customers. It's like having a virtual receptionist always available to assist you.

A long hold time is the number one source of frustration for more than half of customers (57%) when interacting with a business. Furthermore, as hold time increases, so does their likelihood of abandoning the call and becoming a repeat caller, costing your contact center additional time and resources.

Customers can quickly obtain the required information using IVR without waiting on hold. It's also available 24 hours a day, seven days a week, so you can get help whenever needed.

IVR also adds a personal touch by understanding when you speak and responding accordingly. 

IVR exists to make your life easier by providing efficient and convenient service. So, the next time you call a company and hear a pre-recorded voice, remember that it's there to help you quickly and easily get the information you need.

2. Reduced wait time:

IVR, or Interactive Voice Response, is similar to having a virtual receptionist available to assist. When you call an IVR company, you will hear a pre-recorded or computer-generated voice that will provide you with a list of options. This allows the company to route your call to the appropriate person or department, saving you time on hold.

Another aspect where IVR benefits organizations are in data collection, such as account numbers or confirmation of personal information. This can improve call center efficiency by allowing agents to have all the necessary information when they answer the phone.

Overall, IVR technology can be a valuable tool for companies looking to improve the effectiveness of their contact center. IVR can help to reduce wait times, improve the customer experience, and drive growth for your company by providing customers with a convenient and efficient way to interact with your business. In short, IVR allows businesses to manage calls more efficiently and will enable you to get the information you need without having to wait on hold.

3. 24/7 access

Customers can get information and support from IVR 24 hours a day, seven days a week, which is especially useful for businesses that operate in multiple time zones or have customers from all over the world.

This means that if you need assistance late at night or on the weekend, IVR will be there to help. You don't need to wait for the contact center to open or be concerned about being unable to speak with a live agent.

Furthermore, IVR can be integrated with other technologies, such as CRM, improving the customer experience and providing more accurate information.

So, the next time you need help, and the office is closed, feel free to contact the company's customer service line. IVR can assist you 24 hours a day, seven days a week!

4. Improves agent performance

Automating common customer inquiries and routing calls to the appropriate department or agent, IVR, or interactive voice response can significantly improve agent performance. This enables agents to concentrate on more complex issues, resulting in faster resolution times and higher customer satisfaction. Furthermore, IVR can provide valuable data on customer needs and preferences, which can be used to improve agent performance and call center operations overall. Overall, implementing IVR is a wise investment that can significantly increase agent performance and customer service.

5. Better personalization

These days, personalization is one of the most significant aspects of excellent customer experience. IVR provides customers tailored options and routes them to the appropriate department or agent. For example, IVR system can present customers with personalized options and recommendations. This includes directing them to a specific agent who has previously assisted them, using data on customer preferences and past interactions. IVR can also collect information about customer needs and preferences, which can be used to personalize interactions and improve the overall customer experience. IVR is an effective tool for increasing personalization and strengthening customer relationships.

6. Data collection and analytics

IVR systems can be a goldmine for data collection and analytics! Gathering information on customer interactions, such as the options and features they use, can help you understand what your customers want and need. This data is used to improve the IVR system, such as making sure the most popular options are easily accessible. It can also assist in routing calls to the appropriate department or agent, ensuring that your customers receive the most effective assistance.

Furthermore, IVR data can provide a complete picture of your customers when combined with other data sources. 

7. Fewer manual errors

IVR can significantly reduce manual errors by automating everyday customer interactions and providing customers with clear and consistent information. It helps to eliminate miscommunication by using pre-recorded prompts and menu options. IVR also provides customers with accurate and up-to-date information, like account balances or order status, reducing the possibility of errors caused by manual data entry. Furthermore, IVR can automate processes like payments, order placement, and appointment scheduling, lowering the likelihood of errors caused by manual data entry.

8. Cost-effectiveness

IVR is an excellent way to save money for your company! It can help you need fewer agents by automating everyday customer interactions and routing calls to the appropriate department. That means saving more money in the long run! Furthermore, IVR lets your customers receive accurate and up-to-date information without waiting for an agent, saving you time and money.

However, there is more. IVR operates 24 hours a day, seven days a week, and can simultaneously handle a high volume of calls. You don't have to worry about hiring additional staff to cover extended hours. This saves you even more money in the long run. So, if you want to save money for your business, IVR is something to think about!

Get started with IVR and improve your business

Customers may not realize it initially, but IVR systems for service providers are designed to increase efficiency and improve customer experience.

Today, omnichannel support is critical to providing the best possible customer experience. So, any IVR system should be part of the push toward genuine omnichannel service. A modern IVR system can assist you in improving the overall customer experience. It will set you apart from your competition and will more than pay for itself. 

Learn more about how the Live product family can help you support and improve your customer experience strategy.

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