Interactive voice response, or IVR, is an automated telephone system technology that enables callers to receive or provide information, or make requests using voice or menu inputs, without speaking to a live agent. IVR is powered by a pre-recorded messaging or text-to-speech technology with a dual-tone multi-frequency (DTMF) interface.
If the interactive voice response system cannot retrieve the information that the caller is asking for, the programmed menu options can provide assistance in call routing, sending callers to the appropriate representative for help. By integrating computer and telephony technologies, IVR software can improve call flow and reduce wait times, leading to higher overall customer satisfaction.
Moviefone was one of the most famous and successful uses of IVR technology in the 1990s. Since the internet wasn’t as accessible then as it is today, movie-goers would call in and provide their Zip Code to get a list of available movie theaters near them with their respective movies and show times. While Moviefone is a product of the past, its underlying technology is still leveraged, primarily within call centers, to provide customer support and reduce the call volume for customer service representatives.
Today, IVR software is still evolving. The development of natural language processing technology expands the range of ways callers can now interact with computers on the phone. Instead of using a touch-tone system, more advanced IVR software enables callers to verbalize their needs on the telephone. Then, through speech recognition, an IVR system can understand and respond to their inquiries in real-time.
IVR systems improve the customer experience by providing self-service options for customers to access the information that they need without the assistance of customer support. It also reduces the call volume for contact centers, lowering wait times and operational costs for businesses.
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IVR may be used with both public switched telephone networks (PSTN) and also with voice over IP (VoIP) networks. An interactive voice response phone system typically consists of the following components:
From here, one of three types of IVR systems is typically constructed.
Interactive voice response technology offers competitive advantages to large and small businesses, and improves their automation efforts. Some key benefits include:
While interactive voice response can offer benefits to businesses, the technology still has limitations that need to be resolved and optimized for. Organizations should monitor the metrics of, at least, the most-used options: average hold time and success rate. Challenges include the following:
Poorly deployed IVR systems can lead to high call abandonment rates and negative customer sentiment. Since low customer service satisfaction can harm a brand via negative reviews and public social media complaints, businesses should be thoughtful in their deployment of an IVR contact center solution.
Interactive voice response solutions have been utilized across a wide variety of industries. Below we’ll delve more deeply into these use cases.
Banking: IVR can be leveraged for a variety of tasks within banking and finance, such as providing account inquiries, including account balances and loan application statuses, as well as enabling transactions, activations and changes to investment portfolios.
Customer service: Customer service call centers straddle across multiple industries. Organizations can configure centers to handle a high volume of inbound calls using automated menus and pre-recorded messages to handle customer queries and complaints. Some IVR solutions include a callback option where customers are in a queue and receive an outbound call when an agent is ready to help them.
Education: Research1 has shown that educational institutions can implement IVR to assist parents in retrieving a status update on their child's performance and attendance in school. Parents can register with the system and then input a username and password to access key information on future calls.
Government: Constituents call government offices for important information or with requests. Much of this can be automated with IVR, such as confirming polling places and times, licensing and permits, taxes or unemployment insurance. In addition, requests can be routed to the correct department for discussion.
Healthcare: IVR technology has a number of practical uses within healthcare, such as pre-treatment questionnaires, patient satisfaction surveys, lab and appointment scheduling, post-discharge follow-up, lab results and patient monitoring. This research2 also highlights how it can increase overall patient satisfaction by reminding patients to adhere to their medication schedule.
Hospitality and travel: Bookings, cancellations, and customer service contacts can speed and improve customer service for airlines, hotels, railroads and vehicle rental agencies. By determining the reason for the call—booking, change of plans, delay—customers can be routed directly to the correct department.
Retail and e-commerce: Customers can now verify delivery and return status quickly and easily. Self-service or live chats for retail can answer many customer questions, but then telephone calls can also be routed to a live agent for discussions.
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