IVR and the benefits of using Interactive Voice Response

Learn the meaning of IVR and how an effective IVR helps you better serve your customers.

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What is IVR and why do you need it?

Your customers should get the service they need at their first contact to customer service. Connecting them with the agent best equipped to handle their issues helps increase first call resolution and the efficiency of your customer service. This is where IVR and its modern equivalents come in.

IVR is short for Interactive Voice Response. In its simplest form, IVR is an automatic response that a customer gets when they call your contact center enabling them to give information about themselves – such as their preferred language – that then helps you direct them to the right agent.


“You’d be amazed how much time we save when the system itself handles the call results, transfers contacts automatically between call lists, and lets us see client’s calendar availability on the same screen. It might feel like a few seconds here and a minute there, but adding them up throughout the day makes a huge difference, which in turn is extra revenue.” – JC Phoner (read the full case study here).


Data paves the way for better customer service

Data plays a key role in matching the agent and the customer, but how is this data extracted? Part of the data can be collected in the Automatic Call and Message Distribution process via the integration of CRMs and other data sources. However, some of the necessary data is best collected directly from the customers.

The traditional way to collect customer data is to apply an IVR, which lets the customer provide information that helps the contact center categorize their customers. By stating whether their issue is about, for example, technical support or billing, the customer can be directed to the right queue straight away without wasting time.

In addition to collecting customer data, the IVR is also crucial in relaying information to the customers. Customers can even solve the simplest issues themselves with the voice response. For example, if there is an issue or error that the company is resolving at the moment, an IVR can convey the message to thousands of customers without having to use agent resources.

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IVR features and benefits that help your customer service

Having a high-quality IVR has both tangible and intangible business benefits ranging from concrete performance improvements to a heightened team spirit.

Enables exclusive service tiers

When you want to go the extra mile for your premium customers, an IVR allows contacts to identify themselves and receive premium service. You can even send them to a VIP queue, so they don't have to queue at all.

Improves first-contact resolution and customer experience

One of the most important factors in achieving first-contact resolution is matching the right customer and the right agent. IVR is an integral part of the automatic call and messaging distribution process. Some information can be gathered via CRM integration and other tools, but collecting information from customers themselves plays an important part in, for example, determining the reason for contact.

Provides 24/7 service

Even if there are no agents available around the clock, customers can solve simple issues or leave a call back request through an IVR or a chat decision tree. This provides a cost-efficient option for contact centers to offer customer service at all times.

Simplifies reporting

First-contact resolution simplifies reporting. When a customer is bounced from one queue and agent to the next, the report for that contact gets complicated.

Supports strategy through data collection

Every time a customer provides information to the contact center, the data can be stored, analyzed and used to improve the whole customer service operation. For example, the contact center can look at the data to find seasonal changes that have to be considered when planning queues and staffing.

Reduces operation costs

Accurate distribution makes the whole operation more efficient. When your agents solve issues fast, your staff expenditure is reduced.

How to create an IVR

The easiest way to create IVR is to use a customer service software. The creation of an IVR is typically not difficult, but involves the creation of an IVR call tree.

IVR call tree and IVR language
An IVR call tree defines the potential stages that your customer goes through when calling your customer service.

For example, when working in a multilingual country or business, the first phase of your call tree might be to define the IVR language for the rest of the call by asking the customer for their preferred language of service. Let’s assume you are offering in two languages.

Next, you’ll ask what their issue is about. For example in the case of a telecommunications operator, you might ask whether they are contacting about cellular connections or landline internet.

Finally, you could ask whether they need help with technical matters or with invoicing.

With these choices, your IVR call tree now already has 8 branches. These eight branches can now direct the callers into eight different queues.

IVR Scripts and IVR Prompts

For each stage in your call tree, you of course have to define the message that the customer will hear and how they will respond. This is known as an IVR script, which consists of IVR Prompts ie. messages. The prompts can either be recorded (typically as an MP3) human voice or you can just type in the message you want to hear and a robot will read it out loud.

Speech enabled IVR and conversational IVR
Customers typically respond by dialling keys on their phone using the touch-tone menu (e.g. dial 1 for service in English). However, in certain cases you might want to use a speech enabled IVR, also known as a conversational IVR.

A speech enabled IVR lets your customer respond by talking on their phone instead of typing. The system then uses natural language processing to convert the speech to text. Using a conversational IVR is good service for example when customers would otherwise have to type a long series of numbers (such as a loyalty card number).

The best IVR service provider

Whether you are small business or a large multinational company, in today's omnichannel world, concentrating on calls alone isn't enough. 66% of people contact customer service using at least three channels, which means that you need a contact center software that can integrate data from all channels. That's why the best IVR system is one that enables data collection from other channels as well.

The best IVR flows allow flexible data collection

Decision trees in chatbots can perform the same function as an IVR for customers who opt not to to call by phone. A good IVR flow builder allows you to carefully plan the customers' journey through the IVR system. These are some of the features a good IVR flow builder should include:

  • Multi-level menus for accurate customer distribution
  • Omnichannel approach with both voice and text to satisfy customer needs
  • Announcements or greetings at any point in the menu for flexible interaction
  • Option to distribute to a specific queue or directly to an agent for improved first-contact resolution
  • Callback option for flexible service
  • Forwards and redirects for efficiency.
  • Try an easy and efficient IVR for yourself

    Interested in optimizing your contact center with a flexible IVR that you can easily customise yourself? Get a free trial or find out more about LeadDesk's Customer Service solution. If you'd like to find out more about the whole automatic call & messaging distribution process, take a closer look at our full guide on the topic.

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