March 6, 2021

A complete guide to Interactive Voice Response: How your business can use IVR to make every customer call count

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What is IVR?

IVR, or Interactive Voice Response, is a self-serve technology that lets callers navigate through a phone system before talking to a human operator.

We’ve all run into, “Press one for support, press two to speak to sales.” The computerized voice that routes you to the right department based on your selection from the phone keypad is powered by IVR. IVR systems help businesses and call centers handle more phone calls for every operator by automating the initial few levels of questions.

Interactive Voice Response systems have been around since the 1970s. That is a lot of time for some interesting developments to take shape in this field. IVR uses DTMF tones—a signal generated when you press the numbers on your telephone keypad.

IVR started with DTMF inputs and voice output. The next generation IVR incorporated speech input and output. There are also options like using artificial intelligence (AI) for IVR, which allows callers to talk without being limited by a menu.

When callers dial a particular number and are greeted by IVR, it is referred to as inbound IVR. Outbound IVR is used for call blasts, or to collect surveys, or other phone call outreach your company might do on a large scale.

How does an IVR system work?

If you want to purchase an IVRS for your business and are wondering if you need to invest in any bulky or new equipment, those days are long gone!

Cloud-based IVR providers simplify IVR for businesses. The technicalities involve computer telephony integration (CTI) and a host of components, such as:

  • PSTN or internet-based VoIP for phone call routing,
  • A telephony server that acts as a gateway between the IVR software and the database,
  • An application server that plays the IVR options,
  • A database containing real-time information that can be accessed by the IVR to provide contextual support to the callers.

Sound complicated? Well, application servers do the heavy lifting behind the scenes so all you have to do is create a custom phone tree and route callers intelligently. From your caller’s viewpoint, they dial into a number and are greeted with a pre-recorded voice giving them a few options asking them to choose one.

Why does your business need IVR?

A business should work with IVR for first call resolution and hassle-free call dispatch. The cost of not having an IVR system in place is losing a customer to frustration. IVR also:

  • Creates a better customer experience: Your customers have the choice of self-service or talking to an operator. Either way, they can find a resolution 24/7.
  • Paints a professional picture: Small businesses with no luxury of hiring fully-formed sales or support teams can use IVR to project themselves as a big establishment. Your clients don’t have to know you’re a solopreneur!
  • Saves time and costs: IVR makes the coveted trifecta of time-savings, cost reduction and increased efficiency possible. Customers want answers, and they want it now. By providing them with self-service IVR, you have happy customers who bring in more business. IVR costs less than $1 while operator-based costs per caller are between $6-$12. That’s tangible cost savings.
  • Improves customer engagement: Integrating your customer relationship management (CRM) software with IVR helps explore beyond basic personalization. You can pull out their past calls, transaction history, etc. for additional context. Click to call, where customers can connect with your operators while they’re browsing your website or app, is another instrumental feature for improving CX.
  • Facilitates localization: Companies with a global footprint find localization for market expansion difficult. Adopt IVR to learn about the customers in a new country with the help of phone polls, surveys, marketing campaigns and tailor the local messaging accordingly.
  • Empowers easy scalability for businesses: Cloud-based IVR solutions are flexible for scaling with your growing organization. For example, Twitter uses SIP trunking to scale its corporate phone network in many countries at a time. SIP protocol is the foundation of modern communications such as voice calls, video calls, etc. over the internet. A SIP trunking provider connects voice over internal protocol, or VoIP, systems with the phone network, removing the need for a traditional landline or mobile phone services.
  • Integrates with your existing system: If you’ve already invested in a phone system, fret not; IVR systems can be implemented alongside your existing solution—so you can have the best of both worlds!
  • Enables quick process improvement: Discern real-time analytics to understand areas with scope for improvement like calls missed, agent performance, etc. This will help you understand if your team is being over-leveraged or understaffed.

How enterprises use IVR: Use cases and examples

Traditionally, businesses use IVR for routing calls to the right department or executive. Marks and Spencer was looking to implement an agile IVR solution to enhance their customer experience. With the help of IVR, they reduced the time it took to handle an average call by 10 seconds, which resulted in more direct and meaningful conversations with their customers—and enabled them to handle 1 million inbound calls in a month.

Skill-based routing: Set rules and route calls to operators based on their expertise, specialization, SLAs, and priority. ING uses TaskRouter to configure their IVR for a customer-first call center and respond to caller needs efficiently.

Marketing campaigns: Businesses have a hard time tracking their advertising dollars for offline campaigns. Scorpion, an internet marketing agency, uses call tracking for their customer’s campaigns to attribute calls to the right source and measure ROI. They also notify the customers about incoming leads by adding SMS in the mix.

Lead connecting: A marketplace business can use IVR to connect a service provider and service seeker to ensure monetization doesn’t veer off the platform. Homeyou connects contractors, roofers, painters, and other professionals with homeowners seeking these services. With local numbers to connect them, the call experience is controlled and the plumber never knows the homeowner’s phone number. This arrangement builds trust and is respectful of the customer’s privacy.

Surveys: Survey Monkey runs surveys to gather data in every field you can imagine—politics to pharmaceuticals. They saw the scope to improve and revamp laborious telephone surveys. What was once a tedious process involving days or weeks to deploy took just a few hours for Survey Monkey after moving to IVR for conducting their phone surveys.

Appointment reminders: Arkansas Children’s Hospital uses IVR to remind patients about their appointment the next day and confirm if they’ll make the appointment. It’s a simple ‘yes’ or ‘no’ IVR sequence which has helped decrease the no-show rate by 2 percent, thus saving $250,000 for the hospital.

IVR best practices: How to create an IVR experience your customers will love

  • Have a clear welcome message. Make that best first impression.
  • Keep the IVR menu simple and succinct. Use fewer levels and options.
  • Make it easier for the caller to speak with an operator. Making them jump through hoops results in exasperation and bad user experience.
  • Remember the caller’s preferences. For example: if they chose Spanish as their preferred language, ensure they hear Spanish in their subsequent calls.
  • For outbound IVR calls, leverage the power dialer system to ensure there’s no pause between the time the call is answered and the operator is available.
  • Use pleasant hold music and apprise the callers of typical wait times.
  • If you want to promote a new product or service while the callers are on hold, be mindful and do so in a non-intrusive manner.
  • Ensure that IVR is a part of your omnichannel experience.

An IVR system is a key component of a modern business call center. They save time not only for customers but also for the operators, and in turn for the business. IVR helps offer personalized interactions that meet customers’ rising expectations and deliver consistent experiences to the callers.

For more information about building IVR for your phone system, read on.

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