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What is IVR and What Can It Do for You?

This article was updated on April 7, 2022

As enterprises grow, so do their communication challenges. Networks take on more and more traffic to accommodate increased customer interactions. Directing callers to the right person gets more complicated as teams grow and departments become increasingly specialized. In the past, this task required a roomful of operators whose sole job was to transfer calls. Now one well-planned interactive voice response (IVR) solution can get the job done far more quickly and accurately. ... So, what is IVR, and how can it help growing companies boost productivity and improve the customer experience?

Illustration of a hand holding a cellphone. An IVR option is being selected on the phone's number pad. Money is floating in the background.

What Is IVR?

IVR is a voice-driven menu system that allows incoming callers to select pathways and be routed to the people who can best meet their needs. But this is not the only meaning of IVR. In addition to skills-based call routing, IVR can be programmed to answer simple questions and enable self-service options, such as letting customers check the status of an order or make a digital payment.

As an advanced feature of modern unified communications solutions, IVR can automate business processes for dozens — even hundreds — of callers at once, reducing customer wait time and freeing up human contact center agents to focus on higher-value interactions.

How Does IVR Work?

With IVR, customers don't have to wait for a representative or press a series of numbers to navigate complicated phone trees. They simply say what they need. The phone system determines who they need to talk to and directs them to the most relevant person.

IVR integration into customer relationship management (CRM) platforms makes an advanced routing feature even more accurate, helping to ensure customers reach the right person right away. It can recognize repeat contacts and direct them to the representative who typically manages their account or to someone whose expertise best matches the products or services they're currently using or may be interested in purchasing.

What Are the Benefits of Using IVR?

With the right unified communications solution and CRM integrations, IVR can direct customer traffic far more efficiently than human operators and enable simple self-service options.

Reducing the friction and frustration associated with getting customers to the right company representative improves both the customer and employee experiences, while boosting productivity and profitability for the business.

Building a Better User Experience

Improving customer service is the top priority for contact centers in 2022, according to a recent survey by CGS. That's because there's a direct connection between customer experience and profitability. In fact, 80% of consumers feel emotionally connected to brands when customer service solves their problem, and 30% are willing to pay more to do business with brands that provide a great experience (up from 24% in 2019).

A better user experience is one of the key benefits of using IVR — from a customer relationship standpoint, so much rides on the way a business welcomes customers to its contact network. If an interaction starts with long wait times and the customer having to restate their needs again and again, even the best agent might not be able to redeem the experience.

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Cutting through a maze of potential options means stakeholders are better and more quickly connected to the exact resources they need. With IVR, even a small company can present a sophisticated customer experience for clients and prospects. Nuance and attention to detail are competitive factors. When a business's telecommunications sound and work just like the experiences at their biggest competitors, it boosts customer confidence and trust.

IVR and Enterprise Efficiency

Another benefit is IVR means farewell to cumbersome switchboards! With IVR, a centralized digital hub does the work that once required a team of operators. Customers can use the IVR to get answers to simple questions, accomplish routine tasks, or be transferred quickly to an agent who has context about why they're calling.

IVR is built on a foundation of automation, helping to increase profitability and positive outcomes for the bottom line. With IVR manning the frontlines, agents can spend their time solving problems for customers — and building relationships and business value along the way. They don't waste callers' time (or their own) transferring calls to colleagues who are better suited to answer certain questions because the IVR ensures they only answer calls relevant to their areas of expertise. And if those calls come to them via a unified communications platform with CRM integration, agents know who customers are and why they're calling before they even start the conversation. This helps them serve customers more quickly and serve more customers.

Expanding the Boundaries of Remote Communication

Remote and hybrid workforces have become the norm across many industries, and unified communications with IVR functionality supports teams as they work from anywhere. IVR enables geographic flexibility, meaning teams can call a selected number from any phone and, with the right credentials, access voicemail, join conference calls, and leave voicemails for colleagues. But that's table stakes, really. An even more powerful advantage lies in IVR's ability to call any external number from a user's baseline work extension — the recipient sees the incoming call as coming from an office line. Company agents can work from wherever but still have the interaction carry the same gravitas as an in-office call.

So, what is IVR? The answer has shifted from the earliest iterations of interactive voice response — the dual-tone multi-frequency technology developed in the 1960's — to the artificially intelligent, integrated solutions available today. At its core, the technology's purpose has always been to give callers access to computer data using their voices. Now that it's faster, more conversational, and more easily integrated with other business software, it also lets enterprises automate processes, streamline business communications, and improve the customer experience.

To learn more about how you can add on and build IVR technology, contact a Vonage representative.

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