What is interactive voice response (IVR)? a complete guide

Whether you realise it or not, you’ve likely encountered interactive voice response more times than you can count. These are the “press one for customer service, press two for returns” systems that have graced business phone lines for years. Some organisations have painful IVR prompts, but others get it right—leading to faster customer response times and greater efficiency for call centre teams.

IVR helps call centres deflect incoming calls, answer customer questions immediately, and free up agents to handle urgent, complicated matters. In this guide, we’ll detail the benefits of IVR and how you can use it to provide more efficient service to your callers.

More in this guide:

• How does interactive voice response work?
• The benefits of using IVR
• Challenges of interactive voice response
• IVR use cases
• Software related to IVR
• Frequently asked questions
• Enhance your IVR capabilities with Zendesk

How does interactive voice response work?

IVR provides callers with a series of pre-recorded prompts or menu options. Customers can use these instructions to reach the right department or support agent and self-serve.

Customers often call a support line when they need assistance, and IVR can help teams provide better and more cost-effective phone support through automation and streamlined workflows. Standard IVR systems allow customers to use a keypad to answer prompts, while advanced IVRs use voice recognition technology that understands speech.

The standard IVR process works like this:

1. The customer calls the customer support team.

2. The IVR system greets the customer with a set of options, such as which department they want to reach.

3. The customer chooses the relevant option. Depending on the system, this can be through keypad or voice inputs.

4. The IVR uses these responses to route customers to the right agent or department, provide recorded responses to frequently asked questions, or deflect calls by allowing callers to switch from a live call to a text message.

IVR empowers businesses to engage in better call centre management by optimising call routing and helping employees be more efficient with their time. This helps customers get to where they need to go faster and can improve the customer experience (CX).

The benefits of using IVR

Customers have increasingly high standards for support. Luckily, contact centres can use an IVR phone system to meet buyers’ evolving needs and expectations. Here are some key benefits of using IVR for customer support.

Reduces operational costs

Interactive voice response systems reduce operational costs by automating tasks, deflecting calls, and streamlining workflows. Providing customers access to automated self-service options reduces call volume and deflects tickets, freeing up agents to tackle more complex tasks.

Provides 24/7 support

Providing around-the-clock support is a key aspect of good customer service. However, not every inbound call centre can offer live, 24/7 support.

With IVR customer service, you can use pre-recorded responses to common questions, such as listing standard business operating hours or holiday schedules. It can also give customers access to automated transactions like making payments, checking account balances, or scheduling a call back from a live agent. These features can provide flexibility and convenience.

Enables call routing and triage

These days, a single bad customer service interaction can make your customer switch to a competitor. Rather than risking customer churn, an IVR system can prioritise high-value customers and push the call to the front of the line.

Some of the top benefits of IVR call routing and triage include the ability to:

• Prioritise calls from VIPs and high-value customers.

• Route callers to specific agents or departments based on their area codes, priority, sentiment, intent, and language.

• View tickets for callers waiting in the queue.

• Run triggers to change the call priority or routing destination when a customer enters the queue.

• Send callers to the first available agent.

Increases first contact resolutions

Customers want their questions answered quickly without jumping through too many hoops. IVR helps by routing calls to the appropriate agent right off the bat and providing quick answers to FAQs, improving first contact resolution (FCR).

To see this in action, look no further than fabric and quilting retailer Missouri Star Quilt Company. The business used Zendesk IVR and skills-based routing to handle its growing call volume, resulting in a 95 per cent call answer rate and a customer satisfaction rating of 97 per cent.

Streamlines workflows

High call volumes can overwhelm call centre agents, especially during peak times. IVR software offers automated, front-line customer support, deflecting tickets and streamlining workflows. Here are a few ways IVR helps businesses achieve this:

• Voicemail or callback: Prompt callers to leave a message or receive a callback when dealing with long wait times.
• Number or department: Forward calls to a specific phone number when an issue requires specialised knowledge.
• Secondary IVR menu: Use a recorded message to direct callers to your website for information or offer more options.
• Text back: Switch a phone call to a text message to reduce inbound calls and provide digital resources.
• Answer FAQs: Answer frequently asked questions automatically with prerecorded messages and solutions.
• AI-powered quality assurance (QA): Automatically monitor call centre performance in real time, identify churn risk, and make informed decisions to improve your customer support.

Challenges of interactive voice response

To unlock the benefits of an IVR, you need to implement it correctly. Below, we highlight common IVR challenges and some call centre tips you can use to overcome them.

Lack of human touch

The absence of human interaction in IVR systems may make customers feel disconnected or frustrated, especially when dealing with complex or emotionally charged issues. Sometimes, customers just want to reach a real person—and it can lead to poor satisfaction when this is challenging.

Complex menu and navigation

If the IVR menu is too complex or the navigation is confusing, callers may find locating the information they need difficult. This can lead to frustration or even create an angry customer, potentially causing them to abandon the call.

Speech recognition accuracy

Inaccurate speech recognition can misinterpret customer inputs, leading to frustration as callers may need to repeat information multiple times. Because of this, it is important to invest in speech recognition technology that continuously updates language models for improved accuracy.

IVR use cases

Businesses of all sizes and industries can use an IVR solution. While many industries can utilise IVR software, here are just a few use cases:

• E-commerce and retail: IVR streamlines order tracking, product enquiries, and customer support, providing a convenient self-service option for shoppers to access information about orders and products.
• Finance: IVR facilitates balance inquiries, fund transfers, and account management, offering customers a secure and efficient way to handle routine banking transactions.
• Healthcare: IVR systems for healthcare businesses assist with appointment scheduling, prescription refills, and general health information, enhancing patient engagement and easing the burden on administrative staff.
• Education: IVR helps educational institutions by providing information on course timetables, exam results, and administrative details, offering students and guardians a self-service channel for accessing important academic announcements.

Software related to IVR

IVR isn’t the only way you can automate support, deflect tickets, and provide always-on service. Several tools can help you automate support, offer 24/7 service, deflect tickets, and streamline routing.

• Voice software: Voice software is a solution that often includes IVR and can help businesses interact with customers over the phone, voicemail, and text. Some systems have an omnichannel focus, meaning support agents can reference consumer information across channels as they are speaking with them.
• AI agents: AI agents are advanced bots that can autonomously handle customer concerns over any digital channel, like live chat, SMS, and social messaging. They can offer 24/7 support, execute tasks like product refunds from start to finish, and provide instant, accurate, and personalised responses for even the most complex customer requests. Learn more about Zendesk AI agents.
• AI-powered knowledge bases: AI-powered knowledge bases are advanced solutions that can help your customers self-serve—reducing the need for them to contact human support. This software enables you to create and manage helpful content like how-to articles, product guides, and FAQ pages. You can also connect the system to AI agents, which can surface them to customers during support interactions.
• Voice AI: Voice AI allows organisations to establish AI call centres. This technology can empower businesses to answer customer calls with AI agents, help them identify churn risks and outliers with QA, and provide transcripts and summaries after the call.

Frequently asked questions

Enhance your IVR capabilities with Zendesk

With the right IVR solution, your business can provide a powerful automated system that helps streamline workflows and keep ticket queues manageable. With Zendesk, you can stay dialled in with your customers and expertly deliver omnichannel service. Our voice capabilities are fast to set up and come with powerful AI capabilities that can help you resolve calls with automation, monitor quality, and direct and route calls from the same workspace.

Learn more about how Zendesk can upgrade your IVR capabilities.