Everything You Need to Know About IVR Systems


IVR Systems

You’ve probably encountered an IVR system when calling customer service before, and it rattled off your options like this: “For billing, please press 1; for our business hours, press 2; to hear your account balance, press 3…”

It’s among the earliest technologies for customer service that’s still widely used today. It helps support teams provide more efficient and effective telephone assistance at a lower cost. If you want to get a business phone number to do this (and more!), then learn more in this article about the functionality IVR can offer and why they’re crucial to enhancing phone interactions with customers.

What Exactly Is an IVR System?

The term “interactive voice response” (IVR) refers to an automated telephone system that utilizes a dual-tone multi-frequency (DTMF) interface in conjunction with pre-recorded messages or text-to-speech technology to interact with callers and elicit information from them without the need for a human operator.

If the IVR fails to retrieve the desired data, the caller will be directed to the most qualified agent based on their selection from a predetermined menu. IVR software, which integrates computer and telephony technologies, can boost customer satisfaction by easing the flow of calls and decreasing hold times.

These days, IVR programs are developing fast. The evolution of natural language processing technology has increased the variety of phone-based interactions between humans and computers. Newer IVR programs let callers speak their requests into the phone rather than using a touch-tone system. After that, the IVR system will be able to interpret their questions and provide instantaneous responses thanks to speech recognition technology.

Understanding the Nitty-Gritty: How Does an IVR System Work?

As with other types of call center software, such as automatic call distribution (ACD) and customer relationship management (CRM), an IVR system can integrate with or be bundled with these other types of programs.

By allowing customers to get the answers they need without having to wait on hold to speak to a representative, IVR systems boost customer satisfaction. They lessen the number of calls received by contact centers, which in turn decreases wait times and costs.

With reduced wait times and fewer employees needed, even the simplest IVR solution is cost-effective. However, more sophisticated systems offer an even better experience for the customer. Let’s first look at how a basic version of the IVR works, followed by more advanced systems.

Basic IVR

Integrated voice response systems rely on two main components to interpret and act upon a caller’s input. Both Dual-Tone Multi-Frequency signaling and voice recognition technology fall into this category (or DTMF).

When callers use their phone’s keypad to navigate a menu, a DTMF signal is sent from the phone to the computer. With the help of this touch-tone technology, calls can be intelligently redirected without the need for a human operator.

Directed Dialogue is made possible by IVR systems with built-in voice recognition technology; this allows callers to communicate with the system entirely by voice rather than pressing buttons.

Advanced IVR

The evolution of these systems has resulted in more natural, expedient, and pleasurable interactions with IVR for the customer. The development of conversational AI, like Natural Language Processing (NLP), has been one of the most user-friendly innovations.

Nowadays, full sentences can be understood and processed by a computer instead of just single commands. A natural language processing (NLP) enabled IVR can provide free-form responses to questions like “how can we help you today?”

Customers love this style of conversational customer service because it allows them more agency in their interactions. In addition, this is a much more efficient method of using IVR because it allows callers to bypass unnecessary options and get right to the point.

How Can an IVR System Help Your Business?

IVR systems have a wide range of applications. Inbound and outbound call automation and call routing are the most common applications. Since an IVR system can handle all incoming calls, a receptionist isn’t needed. A menu of options and possible FAQs are presented to the caller in this scenario.

The following are some ways in which companies of all sizes can benefit from investing in IVR technology:

  • Money and time are both spared. Answering frequently asked questions or providing oft-requested information (such as directions, business hours, etc.) that does not require critical thinking skills can be automated with IVR technology.
  • The use of IVR means that callers never have to wait for an answer.
  • Maintenance is available around the clock. Interruptions are not a problem for IVR systems, so users can always get the answers they need.

What Kind of Features Make IVR Technology Useful?

IVR is most useful for call centers and other businesses that get a lot of phone calls. Indeed, they would likely not function without an IVR, especially during peak calling times. Ultimately, IVR is beneficial for any company hoping to decrease customer wait times, speed up service, and free up agents to focus on issues that call for human intervention.

The importance of having an IVR is decreasingly dependent on the volume of calls. A large number of customers who contact companies express frustration when they are transferred to different teams, as most people can attest to. To reduce the time it takes to transfer calls and the subsequent impact on your churn rate, implement an IVR system to ensure that calls are routed to the correct department or individual the first time around.

The following are some additional applications of IVR systems in businesses:

  • The ability to check account balances and make transfers, as well as make and receive office phone calls, forward calls to a call center, place basic orders, and access limited amounts of data. Complex IVR applications can streamline operations in fields outside of customer service.
  • Sales: Customers can use the phone keypad to complete the sales order form in IVR systems. A salesperson will then receive the completed form from the computer.
  • Marketing: IVR systems allow marketers to send out surveys to determine product demand.
  • Charts for medical treatment. Using an IVR system, doctors can transcribe notes and patient records and have a copy sent to the office.

Setting Up an IVR System: Is It Difficult?

Traditional IVR systems were notoriously difficult to work with. If you wanted to implement an IVR, you’d have needed to invest in new IT hardware and software and also needed to hire a highly paid IT professional to oversee it all. This necessitated scaling the solution as your business expanded, as adding new users necessitated purchasing and installing additional hardware.

But that was in the past. With a cloud-based phone system, there is no need to add new hardware or hire more staff to handle setup and management. These solutions are also much simpler to scale (up or down) because you don’t have to deploy additional hardware; instead, you can just buy more licenses and create accounts for the additional users.

Modern IVR can be up and running with just the purchase of the necessary licenses and some configuration. Configuring your IVR does not require any knowledge of code or development. Virtually all VoIP service providers let customers set up their own IVR menus and logic through a graphical user interface (GUI) or by filling out forms.

But if you find that to be too much effort, you’re in luck. Yet another option for leveraging IVR with minimal effort is through the use of managed service providers (MSPs). So that you can concentrate on running your business, many MSPs that provide VoIP as a service will also host, set up, and maintain the solution, including your IVR.

Best Tips for Choosing an IVR Service Provider

Before committing to an IVR Service provider, it’s important to determine if you actually require such a system. If your company or organization is any of the following types, an IVR System is a necessity:

  • Organizations that have several satellite locations
  • Businesses serving customers in multiple locations
  • Companies that have a digital footprint, including websites, social media profiles, and online business directories
  • Multi-departmental businesses that focus on sales, support, and marketing
  • Online merchants
  • Providers of a wide range of services
  • Institutions like hospitals and government offices

This is just a quick checklist to see if an IVR would be beneficial for your company. Your business needs and analysis will determine the ultimate course of action. The following are some considerations to keep in mind when selecting an IVR Solution provider:

1. A System with Several Layers

When deciding on an IVR system, a multi-tiered solution should be your top priority. If the system is to function properly, it must have multiple tiers or levels. An interactive voice response (IVR) system can be integrated into an automated receptionist.

To reach sales or support, for instance, you might be prompted to press 1 or 2. If a caller presses 1, they will be connected to a second-tier IVR that can be used for sales or support.

2. Text-to-Speech

Do you know the costs associated with IVR recording? It isn’t cheap! Therefore, choose an option that allows you to convert text into speech. If your IVR menu ever needs to be updated due to a shift in strategy, having this resource on hand will be invaluable.

You can’t afford to have new IVR recordings made every time you make a small adjustment to the process. In order to make instantaneous modifications to your IVR system, it is wise to implement a text-to-speech conversion feature.

3. Activatable Call Buttons

Click-to-call is an extremely helpful feature for commercial enterprises. It’s useful for business owners who want to boost their website conversion rates. You can make it easy for people to call you from your website by installing a click-to-call button. Calls to the company are free of charge, so prospective clients have no reason to refrain from making contact.

Because click-to-call is such a high-end feature, not all IVR service providers will offer it. Whether or not this component is included in your solution’s package is something you should verify with the service provider.

4. Elaborate Reporting

Every professional communication platform needs a reliable reporting system. This also holds true for your IVR system. Call analytics must be completed before any next steps can be taken. An effective call reporting system will allow you to monitor the efficiency of your call center staff. You can also see where most of your incoming calls are coming from and make choices based on that.

5. Trial Runs

The best way to avoid making a bad software purchase decision is always to try it out first. If you go with a cloud-based IVR service, you can give it a test run before you commit to buying it. The lengthy setup process for an on-premise IVR makes this impossible.

The majority of cloud IVR service providers have free product trials that can last anywhere from 7 days up to a month. You can evaluate the software’s performance and decide whether to make a purchase after the trial period ends.

6. Dedicated Assistance

You should be able to count on personalized assistance in the event of a software problem if you choose to purchase such a product. Ideally, you’d choose a service that provides support via multiple channels (phone, chat, email, etc.). Because your IVR system will be fielding numerous calls every day, having access to a reliable and quick support system is crucial.


So, that was IVR technology for you! It is an insanely diverse and useful tool that can take your company to new heights, especially if you’re just starting out. Now that you know everything you need to make a decision about getting IVR for your company, you should do some research before choosing the right solution for your needs. It is an easy piece of technology that you will get used to in no time. Get what you need today!