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IVR System - Everything You Need to Know About It and More

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It is hard to keep up with the times these days. New updates and technological innovations spring to life every day, and one cannot simply keep track of all of them.

However, worry not; we are here to help. In this article, you will get to know everything about a type of software called IVR System.

An IVR system can help companies in many ways. But get into that more later. Like other automation tools, IVR will allow you to use software to complete everyday tasks.

Automating tasks will help you to improve the accuracy and consistency of workflows. Also, it will help you streamline manual processes and minimize the amount of labor required to do a particular task or produce a specific result.

IVR System
Photographer: Christopher Gower | Source: Unsplash

You can automate many tasks, like scheduling appointments, responding to and sorting emails, posting to social media, and many more.

And even though companies have been automating tasks for a long time now, more and more automation opportunities arise frequently. Of course, we will not talk about all of them today since all of them cannot fit into one article.

Right about now, you might be thinking - Well, that's cool and all, but I still do not know what an IVR system is or what it stands for. Fret not, as the next section of the article will answer those questions. Also, this article will cover IVR in detail. That way, you will find out everything you need to know about IVR. So, without further ado, let's dive in!

What Is IVR System?

IVR stands for Interactive Voice Response. It is a technology that enables humans to interact with a phone system that is operated by a computer. It is an automated feature for phones that you can use to interact with callers instead of you. With an IVR system, you can also gather information from callers by giving them choices via a menu.

Also, an IVR system performs specific actions based on your customers' answers. Thus, the choices your caller makes will decide the actions of the IVR.

Whether your caller needs more information about something or has a complex issue that needs to be resolved by a live agent, an IVR can handle it.

Thus, you will no longer need to spend your time on basic tasks and only handle customers with more complex issues.

For instance, let's assume that you are calling a company because you need information about a particular product or service it offers. When you call, you will be greeted by an automated greeting. Furthermore, you will interact with whoever or whatever is on the other side of the phone via some pre-recorded messages. That is what IVR does.

At one point in time, you have undoubtedly experienced a phone call with an IVR system, whether you knew it or not. For example, you are calling your carrier or wifi company.

The first thing you hear is some options you can pick from via your keypad. So, you will hear something like - press one for technical support or press two to contact billing and sales. All of that is done by an IVR system.

So, all in all, an IVR system is an automated phone system that companies can set up to answer calls and gather information.

Some Key Terms to Know

Most people can go through life without the need to know how IVR works and the technologies related to it. However, if you are a company or individual who wants to incorporate the software in your business, you need to know some key terms related to IVR. Let's see which key terms you need to know and what they mean.


DTMF stands for Dual-Tone Multi-Frequency. It refers to the technology used on phones with touch screens that help users navigate through a phone menu. DTMF is a system that uses audible tones to represent buttons being pressed on a keypad.

So, whenever a caller presses a number button and makes a beeping sound, it sends a signal to the IVR system to send the caller to another branch of the menu.

In simpler terms, DTMF is the technology that you will use in the menu of your IVR system. It will reroute your callers to their desired destinations, like tech support or the billing department.

DTMF in IVR System

Voice Recognition in IVR System

With Voice Recognition, your callers can speak to the IVR system to get to the department they need instead of pressing a number. The system is able to recognize what the person is saying, turn it into a command, and respond accordingly.

It can be ideal for people who cannot get around smartphones. Or it can be great for people who do not understand how to use a button-based system. Also, it is excellent for people who have problems with their eyesight.

The only problem you as a company can face here is setting up your IVR system in a language that not all of your customers speak. However, you can avoid that problem easily. Namely, you can program the software in a way that recognizes more than one language.

Natural Language Processing (NLP)

Natural Language Processing is a type of voice recognition. It allows the caller to say what they are looking for in multiple ways. With NLP, your callers will not be limited only to the responses that the menu offers.

For instance, instead of waiting to find out which number they need to process to access your customer service, your caller can say something like - I need to contact customer service.

Artificial Intelligence (AI)

In general terms, artificial intelligence is the intelligence that machines demonstrate. The opposite of artificial intelligence is natural intelligence, i.e., the intelligence that animals and humans demonstrate.

With artificial intelligence, the computer, or in this case the IVR system, gets smarter and performs its tasks more efficiently as time goes by. Companies apply artificial intelligence to IVR systems to make phone menus easier to use and understand. In turn, it boosts customer satisfaction and enhances customer experience.

AI in IVR System

TTS in IVR System

TTS stands for text-to-speech. It is a system that allows businesses to automate their customer service by using voices that sound human. TTS can take the words on a computer or other device and turn them into audio.

For instance, companies write out entire phone menus and possible outcomes first. Then, the computer system or IVR system recites the text to the customer when it is appropriate.


VXML or VoiceXML is a programming language used to build a wide range of voice applications in IVR. It is considered an industry standard now because of its ability to automate interactions with customers more easily.


TCP stands for transmission control protocol. IP stands for Internet Protocol. The combination of TCP/IP allows computers to speak to each other over the Internet. They can do so because the protocols pull together data groups and put them in the proper location. IVR systems use TCP/IP to move information from the caller to the system so that the system knows what to do next.

Moving Information

Call Flow

Call Flow in an IVR system refers to the options a caller selects on their journey to reach the department they need within a business. Think of it as the whole process your callers go through when they interact with your IVR system.

So, for example, a caller might first press 2 to reach your customer support center and then press 1 to get help with an existing order they have.

Types of IVR System

There are multiple kinds of IVR systems you can choose from, but first, we will start with the most basic ones. Namely, IVR systems are broadly categorized into two categories - outbound and inbound IVR.

Outbound IVR System

Outbound IVR is used to distribute communications to customers proactively. It allows companies to engage customers through multiple channels automatically. It includes automated voice calls, SMS messages, social media posts, and emails.

Outbound IVR occurs when a company sends a pre-recorded message when it receives a call from a customer. An outbound IVR system effectively conveys personalized communications to customers via their preferred channels.

Outbound IVR systems can also be used to alert people about existing appointments or to convey emergency notifications. Marketing companies also use outbound IVR systems to automate calls to reach out to customers by using an autodialer to route responders to live agents.

In other words, the system auto-dials customers, and when they respond, it transfers the call to a live agent who continues conversing with the customer.

Source: Unsplash

Inbound IVR System

Inbound IVR allows incoming voice dialers to navigate through a phone menu, receive the information they need, find the right person to help, and perform automatic transactions and lookups.

It captures user input in the form of decoded DTMF tones or speech recognition. So, an inbound IVR system is the one that callers use when they call your company and choose which option is right for them via a keypad or speech recognition.

In addition to these two categories, you can use other types of IVR systems. These include conversational, self-service, agent-assisted, and visual IVR systems.

Conversational IVR System

A conversational IVR uses Natural Language Understanding (NLU) and is powered by AI. It allows callers to take charge of the conversation and steer it in the direction they want. It makes the conversation flow more naturally without the need for human intervention.

Conversational IVR can capture the exact sentences and phrases that callers use and provide companies with significant insights into what their callers want and expect to receive when they contact the company.

The system is also capable of improving its proficiency based on the inputs it gathers. What's more, if the system is unable to understand what a caller is saying, it can transfer the call to a live agent without the caller noticing.

The AI system then stores the inputs of the conversation for analysis so that when a caller asks a similar question in the future, it can answer it without any human intervention.

Conversational IVR system

As the system collects more and more input and data, it becomes even more competent to handle calls by itself. And with time, the system becomes more conversational, allowing companies to have more seamless call routing processes.

Self-Service IVR Systems

Self-service systems are a self-servicing solution that aims to improve customer experience. It is a system where customers can find their own solutions without speaking to a live agent. They do so by selecting what they need from a pool of self-help prompts.

And if the customer cannot find a suitable solution for them, they can opt to speak to a live agent. Companies from many different industries use self-service IVR in their daily operations, including survey companies, banks, pharmaceutical companies, call centers, and more.

Agent-Assisted IVR

An agent-assisted IVR system enables agents to pre-record phrases to initiate a dialog with a customer without the customer knowing that an agent is involved. It enables companies to maximize the performance of their automated self-service by bridging an agent into an automated session when the agent is needed.

Agent-assisted IVR can help you decrease customer frustrations caused by complex menu options and structures. It increases ease of use and creates a more user-friendly environment. Also, it adds an elegant error handling process and a consistent caller interface to your IVR system. It can be an ideal solution for companies with an older target audience.

Visual IVR Systems

Visual IVR is a support platform that offers fast services. It guides inbound callers to a web-based support experience. With this type of system, your customers will not have to call you when they have questions or issues. Instead of calling, your customers can click their way through your IVR and find various documents that will help them with their issues.

Your customers will have access to your knowledge base and try to find what they need there. Thus, they will not have to pick up the phone whenever they have questions. They can find what they need on your website through your IVR system!

Visual IVR

Benefits of IVR System

Now that we covered what IVR is and the types of IVR systems available, we can move on to the benefits the system offers. As we mentioned, automation tools have been around for years.

However, modern IVR systems can help your company provide the best and most efficient services and increase its overall competitiveness. Also, utilizing the services that IVR systems offer can help you stand out from the crowd. But let's dive deeper and see which other benefits you can take advantage of by using an IVR system.

24/7 Customer Support

Providing a sound customer support system is vital for any company. A well-rounded and efficient customer support service is challenging to have. Also, customers these days expect 24/7 support from companies, which can be a challenging task to accomplish.

However, an IVR system can help you with all of that. It will ensure that all of your customers are attended to at all times.

Also, it will make sure that your customers will receive help immediately, even when a live agent is not available. The IVR system is a piece of software, so it does not need to sleep or take breaks. Thus, the system is online at all times and ready to take action when needed.

24/7 Customer Support

IVR Systems Can Handle a High Volume of Calls

An IVR system can help you connect with many people simultaneously as it can handle multiple phone calls at the same time. In turn, your callers will not hang up due to long waiting periods and will want to engage with you again in the future.

Also, you will not lose any potential business opportunities due to lack of communication or delayed communication.

With an IVR system, you can rest assured that every caller will receive a response and the help they need. It does not matter if you have one or one hundred callers; an IVR system can handle all of them efficiently.

Call Routing

IVR systems have a call routing feature that allows companies to provide a better customer experience to their customers. The feature enables you to instantly direct calls to available agents and improves operational efficiency. What's more, the call routing feature reduces wait times which furthermore increases customer satisfaction.

Call Recording

Another great benefit of IVR systems is their call recording feature. It allows companies to record conversations as they happen and gather information about what callers usually ask when they call. Also, it allows you to see which issues are most common and take appropriate actions to resolve them. With this feature, you can meet customers' expectations quickly and deliver better results overall.

An IVR System can record calls

An IVR System Can Help You Generate More Leads

In addition to recording calls, the IVR system can also collect tons of data and analyze it. Thus, it can generate leads about what your customers want and expect from you. That way, you will ensure customer loyalty and show them that their voices are heard. In addition, you will increase the level of your conversion rates.

IVR Use Cases

Choosing the ideal IVR type for your business largely depends on your call volume and how you want to use IVR in your business. However, there are some common use cases for IVR that might help you decide what you want to use IVR for in your business.

Customer Service IVR

It is surprising to see how many businesses do not offer adequate customer services in this day and age. Also, many expanding businesses have trouble with providing strong customer service to their customers.

This is where IVR systems come in. You can use an IVR system for providing customer support. Doing so will reduce wait times and reduce your costs because you will not have to hire people to field questions and route calls.

An inbound IVR system will be enough to satisfy general customer service needs. However, if you think that you will also need outbound IVR services in the future, it would be best to choose a provider that offers both inbound and outbound IVR services.

Payment Collection & Processing

Many companies use IVR systems to automate payment transactions and collections. In addition to outbound collections calls, an IVR system allows customers to call into companies, obtain billing information or account balances, and make payments.

Keep in mind that IVR systems that offer payments processing are usually more expensive than those that do not. However, the cost of getting such a system might turn out lower than hiring individual customer service representatives who will only handle payments.

Payment collection and processing

Communication and marketing

You can use outbound IVR systems for marketing purposes. For example, you can use an outbound IVR system to alert potential customers about a sale or a new product. Also, you can communicate with your customers through an IVR system.

IVR System Mistakes You Should Avoid

Setting up your IVR system is easy and does not take much time. However, there are some practices you should avoid regarding your IVR system. Let's find out which mistakes are those.

IVR System Mistakes You Should Avoid

Too Many Options

IVR systems should be designed in a way that allows customers to resolve their issues efficiently and quickly. You should avoid putting too many options and too much information as it will take more time for customers to find what they need.

As a general guideline, you should limit your menu options to around five before breaking options off into sub-menus. Also, each option should provide quick responses and contain the necessary information only. In the case of IVR menus, less is more, and your callers will be thankful if you don't overwhelm them with too much information.

IVR System With Poorly Organized Information

The most efficient way to organize information in your IVR system is by putting the most frequently accessed information first.

For instance, if most of your calls are rerouted to tech support and only a small percentage goes to sales, then you should list tech support before sales on your IVR.

Repetitive Hold Music or Message

If there's something worse than long waiting periods, it's definitely being stuck on hold while listening to the same message or sound over and over again. It can drive customers to hang up and never call you again.

You should ensure that your music is not on a constant loop and that your promotional messages don't repeat every 10 seconds. Also, you should remind your customers frequently that their call is in the queue and that they will receive a response as soon as possible.

No Call-Back Option

Call-back options are great for many reasons. For example, there might be instances when your automated system cannot answer a question or connect a caller to a live agent. In cases like that, you should always have a way for your customers to schedule a call back from your company.

That way, all of your customers will be satisfied, even the ones with highly complex issues. Also, having a call-back option in your IVR might boost your customer satisfaction rates and your overall sales in the long run.

No Information About Wait Time

When you put customers on hold or in a call queue, you should inform them about how long they are going to wait. Even if you don't know the exact wait time, you should give them a close estimate so they can plan their time accordingly.

Also, you can make the wait time information an ongoing message; just make sure it doesn't repeat every 10 seconds or so. The main thing you need to remember here is that you should always provide an estimated wait time to the callers you have on hold.

Who Can Help You Implement an IVR System?

Many companies can provide you with the software you need to set up an IVR system. For example, you can set up your IVR system with Ideta.

Ideta's chatbot is a versatile and well-rounded tool that can help you with many things, including an IVR system. With Ideta, you can get a bot that will answer your calls for you and do all of the activities mentioned above, like gathering data and rerouting calls when needed. What's more, for one price, you will get a bot that can not only answer calls but be used as a live chat and a customer service tool.

Getting a bot from Ideta can help you begin your IVR journey and improve your customer satisfaction and overall sales.

Final Remarks

After diving deep and discovering everything there is to know about IVR systems, it's clear that having an IVR system can help companies in many different ways.

Not only will the system improve your customer service and satisfaction, but it will also decrease your costs.

You won't need to hire extra staff for specific tasks since your IVR system is able to carry out many tasks on its own.

Lastly, automating tasks with an IVR system will save you a lot of time and ultimately make your job a little bit easier.

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Written by
Bruno Mirchevski

Bruno is an Entrepreneur and Marketing Enthusiast. He has extensive experience with SEO, loves how Google works and the potential it has to offer.‍ Website : Twitter : Linkedin :

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