What is an IVR (Interactive Voice Response)

At the simplest level, an IVR (Interactive Voice Response) is an automated interface that allows you to interact with callers to gather data, and potentially resolve an issue without having to direct that caller to an agent. For example, if they just want to know their account balance.

Before I go deeper into WHAT an IVR is, I think we should start with the WHY. Why should you use an IVR in your contact center? Some core advantages of an IVR in a contact center environment include:

• More accurate definition of customer needs and therefore refined routing, which increases customer satisfaction and reduces the need to requeue or transfer calls. Here’s an example: I recently bought a hall tree – online. While I was browsing the website, I had a question around delivery. When I called the 1-800 number on the website, I was first prompted to select the reason for my call. Selecting the “delivery” option brought me to a customer service rep that had the correct skills regarding delivery. Not only that, though: apparently, they recognized that I was calling in from Canada, so I got an agent that had worked on international delivery before.
• Automation of basic data gathering, with the ability to pass collected data thru to the agent. This shortens call handle times and frees up agent resources to handle more complex interactions. Back to the hall tree: when it was delivered, and I had succeeded unwrapping it from its humongous packaging, it turned out that – while it looked exactly as I had envisioned it to look, it unfortunately must have gotten damaged “en route”. Very disappointing. So, when I grab my phone, I find a text message from the company, asking whether everything had gone well with delivery and a clickable number to call in case anything was wrong. I dial the number and find that the agent I am connected with is completely up to date on everything: she knew what I had ordered and where I am and after commiserating with me a little, immediately gave me a number of options on how to deal with this situation. Based on the customized SMS I had received, the agent had access to all my data as soon as I called in. 
• The ability to automate some basic interactions, reducing agent churn and increasing availability of those automated interactions to – ideally – 24/7/365. In my hall tree saga, I had decided to try again and have them send me a replacement, which I received a couple of weeks later. That one was in pristine condition – so instead of calling in, I simply used the online option in the SMS to confirm successful delivery – no need to bother one of their expertly trained agents. I did, however, post a glowing review on their customer service on the website – they really handled this “by the book”.

And that is just the tip of the iceberg on how an IVR can add simple things that make a big difference to your caller’s experience.

At a more technical level, an IVR is an automated system that interacts with callers for gathering information and offering the caller options to select from to convey the reason for their call. IVRs are often used in Call Centers, where collected customer data and menu selections are used in an Automatic Call Distributor (ACD) to route incoming calls to available, appropriately skilled agents.

Basic IVRs often use DTMF (Dual Tone – Multi Frequency) to accept entry, a method that is also used to dial telephone numbers. Widely used for telecommunication signaling, it enables a caller to execute some basic interactions with a telecommunications platform by using their telephone keys. Examples for this type of basic interaction include menu selections (“Please press 1 for Sales, 2 for Service”) or simple data gathering (“Please enter your five-digit customer number, followed by the number sign.”).

Today, simple IVR as described above is still used in many call centers. However, Voice Portals offering more sophisticated functionality such as Text-To-Speech (TTS), Automatic Speech Recognition (ASR), and mobile app integration are increasingly replacing the somewhat limited and not very customer friendly DTMF approach. Together with other tools, such as database integration, this enables the automation of more complex interactions and / or natural interaction with the caller. Boundaries between voice and digital channels are blurring, for example in a Visual IVR where interactions that were originally intended to be voice calls are transformed into a web-based interaction when the caller uses a smart phone. In the future, Automation and Artificial Intelligence are expected to play and even larger role, both in the traditional front-end by turning the former IVR into a fully automated interaction platform that intelligently learns to increase its own scope, as well as on the backend, as a supporting tool for the agent.