What is IVR and How to Benefit from Using It?

Ever thought about how much value automation can bring to your business? Automation already proves its worth in the customer service sphere. The right solution can increase your profits and make your organization more effective. One such system is IVR, which helps immensely with increasing the number of returning customers and your ROI.

So, are you ready to learn how can you improve your customer support service by implementing such a system? Let’s dive in!

What is IVR and How Does It Work?

Interactive voice response or IVR is an automated telephony menu system that interacts with your callers and directs their queries to the most skilled agent. The system uses a dial pad to identify callers, collect the necessary information, segment them, and finally, route them to the person who can solve their issue.

Modern interactive voice response can gather input from your callers through voice recognition software. You can configure the responses in the form of voice, email, callback, fax, and other methods.

Here’s how an IVR system works:

  • The customer makes a call to your company;
  • The IVR system plays a pre-recorded message asking the customer to choose a relevant statement from different options in a menu;
  • Customers can choose the desired option by either typing the corresponding number or repeating the keyword;
  • After the customer selects his desired option, the IVR routes the call to the most skilled agent in your company.

What is the Purpose of an IVR?

IVR systems have many applications for your business. The most common purpose of such a system is the automation of outbound and inbound calls and call routing.

This system is an effective way to eliminate the costs of a switchboard operator who would answer incoming calls and distribute them between other agents since IVR automates this task completely.

Let’s take one example to illustrate the purpose of an IVR - a movie theater. Supposing, a customer calls a movie theatre to find out the schedule of sessions for a specific day. The system will use the database of a movie theatre to provide the customer with a list of showing times for specific movies. This, in turn, eliminates the call wait times and increases customer satisfaction.

More purposes of the IVR are:

  • Customer Support Automation. Letting your customers solve their problems without speaking to your agents.
  • Routing the Callers to the Right Agents. Based on the collected information from the IVR, the system will route callers to the most skilled agent, who will try to meet their needs and solve their problems.
  • Company Image Improvement. IVR systems are great for startups and smaller companies as they can make them appear much larger than they actually are. You can configure your IVR to allow people to connect with different departments of your company, which will definitely boost your credibility in your customers’ eyes.

Benefits Of Using an IVR System

Automation is a powerful thing, and it provides many benefits. IVR system is great for both large and small companies as it reduces costs and increases overall productivity and profit.

Here are some of the benefits of using an IVR system for your business:

  • Operation Automation. You can now leave all of the mundane activities out of the work routine of your agents. With the IVR, customers can obtain the right information more efficiently and get through to the agents that have a high success percentage when it comes to solving their problems.
  • Increase in First Contact Resolution. This system will always direct callers to the most qualified agent who will meet their demands. There will be no need to transfer the call between agents
  • Personalized Interactions. Even though you use a machine for serving your customers, that doesn’t mean you cannot put in some personal touch in this system. You can easily set up a personalized greeting or message that seamlessly transfers your callers to live agents. Your customers will have a feel of real human interaction.
  • Unlimited Customer Access. IVR systems are working non-stop, 24/7, all year round. When your team is on holiday or break, the IVR will keep working in full force to serve your customers.
  • Greater Customer Satisfaction. If your customers get their problems solved in the first run, this leaves an awesome first impression and further strengthens the relationship between them and your business. With IVR, you eliminate long waiting times and empower your customers by helping them solve their inquiries on their own. This will make your customers feel more in control, which increases their satisfaction.
Learn how IVR system for call center works in Voiptime Contact Center solution

Disadvantages of Interactive Voice Response System

Of course, like every other system, the IVR has its disadvantages. Some claim that the system is too detached, serving as a barrier between customers and live agents from your team. Others call it the main culprit behind fewer jobs for call center agents.

The system also has its limits when it comes to answering specific caller questions. The IVR cannot answer every specific question since it only operates within the solutions that were pre-recorded. This treatment can leave the callers confused and frustrated, which might also affect your ROI.

Due to these disadvantages, many companies enhance or completely replace interactive voice response systems with automated speech recognition technologies. These technologies have a big advantage; they allow callers to articulate their requests instead of typing numbers from the dial pad.

Of course, all the disadvantages of the IVR system will be minimized as it will evolve over time like every other technology.

Tips and Best Practices to Improve Your IVR

You can always improve your IVR to get better conversion rates from your callers and increase your ROI dramatically. Here are a couple of things you can do. 

  • Research Your Market. Before implementing the IVR, you should make a user persona for your specific customers. These are the people who are most likely to use your automated system, so keep in mind their needs.
  • A Simple Menu is Essential. Make sure to keep your IVR menu options concise - a maximum of four options. Also, make it simple and less time-consuming for your callers by limiting the level of options to at least two levels. Don’t waste time trying to automate more complex requests; transfer these requests to your specialized agents.
  • Improve the Customer Experience of Your IVR With a Survey. It is essential to know the level of satisfaction your customers feel when using your interactive voice response system. Make a survey to obtain feedback from your customers on what they think is great, and what you should improve in your IVR. Keep in mind that most complaints will probably be subjective, so don’t let them mislead you.
  • Implement Natural Speech Recognition. This technology can dramatically improve your service by providing a conversational response to your callers. You should definitely consider adding it to your interactive voice response system as it will add an additional tonal dimension to your IVR system.
Check our article with the most common mistakes the companies make with IVR and ways of preventing them


An interactive voice response system can provide a lot of benefits to your business. First, it will save time and money for your business, as you will eliminate routine work and solve problems for your clients with greater efficiency.

What’s even better, you can make sure that your customers will finish the call with a smile on their faces. You will also notice that your ROI will increase after implementing such a system.

Lots of businesses still don’t use IVR, even though the benefits are obvious. You can use it to gain a competitive advantage, but keep in mind that such a system has its drawbacks too!

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