What is IVR / Interactive Voice Response?

Interactive Voice Response or IVR Technology, is a telephone technology that allows customers to interact with the company’s host system through configurable voice menu options, in real-time, using DTMF tones, without the need for human intervention. IVR systems allow you to record customized greetings and prompts for a personalized customer experience.

ivr system graph

How does an IVR system operate?

Interactive Voice Response or IVR Technology, is a telephone technology that allows customers to interact with the company’s host system through configurable voice menu options, in real-time, using DTMF tones, without the need for human intervention. IVR systems allow you to record customized greetings and prompts for a personalized customer experience.

Where are IVR systems used and how?

IVR systems can normally handle and service high volumes of incoming calls making them very popular with contact centers. It is generally used to route calls to the right department, via an IVR menu for example press 1 for sales, 2 for support or wait to speak to an operator.

The technology has also advanced to automate simple tasks and processes. This is widely used in banking, flight-scheduling information, and televoting. Using telephone banking as an example, by pressing certain buttons, you can access your account balance, transfer funds or check exchange rates without ever speaking with a customer service agent.

What’s more, IVR systems can also be used by global companies offering callers to speak to agents in different languages. For example, press 1 for English, press 2 for Spanish, etc.

What is a phone tree?

A phone tree is an IVR menu with many “branches” of pre-recorded messages. A particular option chosen will direct the caller to a secondary set of options, tertiary and so on, depending on how far you program your IVR. It is important to find the right balance. It is never good practice to over complicate the phone tree.

Advanced IVR technology - NLP

Advanced IVR systems use Natural Language Processing (NLP) to enable customers to interact with menus using natural speech recognition. Helpful for customers who are sight impaired or have difficulty navigating the IVR menu via touchpad. NLP uses Artificial Intelligence (AI) to turn speech into structured data, being able to recognize various languages, accents and nuances.

Benefits of using an IVR system

An IVR system is designed to boost the competence of any business by increasing flexibility, simplifying processes, and reducing costs, at the same time as improving customer satisfaction.

With IVR software, businesses and call centers can:

  • Reduce operational costs – by reducing human contact center agents and receptionists.

  • Improve customer experience – callers get the specific information they need 24 hours, a day even outside business hours, with less waiting time.

  • Reduce human error - incoming calls follow the same logical sequence, no chance of routing to the wrong department or customer service agent.

  • Resolve issues faster – callers are immediately directed to the sales team or department most capable of giving the right answer.

  • Upgrade company image – small businesses can appear to have a much larger workforce.

Setting up your IVR

3CX has a built-in IVR which allows you to easily record and configure IVR prompts.

If your IVR system will require a complex configuration and you also want to include advanced features like speech-to-text and voice recognition, then the 3CX Call Flow Designer is the perfect solution. The call flow designer will allow you to set up more complex phone trees using a drag and drop interface.

Further reading