Interactive Voice Response (IVR): What It Is and How It Works

Just like many others, Interactive Voice Response is also one of the modern-day innovations. With the help of AI, IVR systems have made work easier, helping both customers and companies around the world. Today, in this blog, let’s find out what IVR is and how it works.

Table of contents: 

1. What is an Interactive Voice Response System (IVR)?
2. How IVR Works?
3. Benefits of IVR
4. Key features of an effective IVR system
5. Common Use Cases of IVR in different industries

What is an Interactive Voice Response System?

Interactive voice response is an automatic telephone system. Basically, it delivers pre-recorded voice prompts to callers, who can then make requests verbally or by means of menu dials. Depending on the customer’s response, IVR routes the call to an appropriate agent, leading to quicker resolution. However, not all calls are transferred to an agent. Some are handled directly by the IVR, which is designed to answer frequently asked questions, ultimately improving customer satisfaction and retention.  

How Interactive Voice Response Works?

An Interactive Voice Response System presents callers with a series of pre-recorded voice prompts that require input based on the inquiry. In turn, he or she will be directed to a department based on their inquiries for resolution.

Today, the automated voice response system has become an integral part of contact centers or call centers because it enables the management of high call volumes in an efficient manner. You may not have noticed that during some time in our lives, we all have interacted with some IVR system. 

Let’s understand this with an example:

Suppose your phone is unable to receive incoming calls even after you have recharged it. You would now call a contact center (call center) to deal with this issue. When you call them, you would receive a machine-generated voice prompt, asking you to “press one for technical support and two for billing inquiries.” By pressing one on your phone, IVR would direct you to the department responsible for technical support. You can then speak directly to a live agent who would help you resolve your issue in the shortest time. 

5 Benefits of IVR

There are many benefits of IVR. Whether it’s streamlined call processes or reduced manual errors, IVR system helps contact centers manage their workload, leading to enhanced customer satisfaction. 

1. Streamlined Work Process: By categorizing a large volume of calls and directing them to specific departments, the IVR system streamlines the overall workflow of the organisation. Additionally, its in-built ability to address frequently asked questions enables it to handle simple queries, freeing agents for more complex issues. 

2. 24/7 Availability:  One of the most useful advantages of IVRs is their 24/7 functionality. Unlike humans, IVR systems can be always functional, meaning a customer can get help at any time of day or night, and even out of working hours. 

3. Reduced Human Errors: Unlike traditional call centers, where human agents would route callers to different departments, an IVR system is driven by automation which eliminates the possibility of human mistakes. With fewer manual errors disrupting the call process, customers find it easy to connect with agents, resulting in quick and effective resolution.

4. Reduced waiting time: Thanks to its scalability, IVR system can manage multiple calls simultaneously, allowing callers to resolve their queries as early as possible without waiting for prolonged hours. The IVR’s quick issue-solving capability helps contact centers manage frustrated customers efficiently, leading to elevated customer satisfaction. 

5. Low Operational Cost: IVR systems help businesses reduce operational costs by automating routine tasks. By replacing human agents with automation, organizations cut down on their labour costs, such as salary and training expenses, leading to lower operational cost and higher profit. 

3 Key features of an effective IVR system

1. Multi-Language Support: Language support is integrated into IVR systems in order to provide solutions in multiple languages to cater to a mix of diverse backgrounds. By allowing callers to communicate in their desired language, IVR systems ensure that the language is no barrier to effective communication and service. 

2. Analytics and Reporting: The analytics and reports feature in an IVR system allows companies to analyze and track customer interaction. Analysis of available data, including total calls received, wait times, resolution rates, etc., helps the IVR to extend better solutions by studying customer behavior, thus reducing wait times in troubleshooting and leading to better services. 

3. Multi-Channel Integration: Different modes can now function with IVR over several channels, such as email, SMS, and even social networking. This integration allows customers to switch channels without repetition of the same conversation. It is user-friendly and more efficient for the customer to complete their call in satisfaction. 

3 Common Use Cases of IVR in different industries

Interactive Voice Response has become a crucial part of almost every sector. Whether it’s healthcare or finance, every industry relies on an effective IVR to efficiently manage its wide customer base. 

Below are some of the most common use cases of IVR systems: 

1. Appointment Scheduling in Healthcare Sector: The IVR system finds wide usage in the healthcare sector. Interactive voice response helps to book, reschedule, or even suspend appointments over the phone or by text without coming to the hospital. The IVR system also helps hospitals send reminders and test reports to patients, leading to an efficient work process. 

Additionally, during emergencies, such as Covid-19, IVR systems enable hospitals to send informative voice prompts to people, providing precautionary steps and what to do next.

2. Order Tracking in E-commerce: By integrating IVR systems into their processes, companies like Amazon and Flipkart allow customers to track their shipping progress. Customers can now call and enter their order numbers, to get real-time delivery updates, ensuring a streamlined and transparent tracking experience.

3. Customer Support and Inquiries: Managing multiple calls and frustrated customers throughout the day is a tiring task, which is why IVR is so popular in customer support sectors. Interactive Voice Response systems categorize callers based on their queries and route them to the right representative. In addition, the IVR provides self-service options for simple issues, freeing agents for more complex problems. By leveraging IVR solutions, customer support centers can streamline operations, ensuring improved services and solutions.

The introduction of IVR systems has revolutionised the way businesses operate in different sectors. From streamlining hectic operations to reducing manual errors, the interactive voice response solutions have enabled organizations to optimize their potential, leading to effective and efficient workflow.