What Is IVR (Interactive Voice Response) & How Does It Work?

IVR, or interactive voice response, is a technology included in today’s leading voice-over-internet-protocol (VoIP) solutions that greets and acts on information it collects from callers. If you’ve experienced having to “say or press one to speak English,” then you already know the concept behind IVR. It makes use of the information it gathers to direct calls, check the identity of the caller and provide the caller with information or handle other the tasks of callers that do not need a human agent, like change their pin or making payments.

What is an IVR and how does it work?

The IVR is the first feature customers encounter when they call a contact center. The IVR will greet the customer with a recorded message and then present them with a variety of choices. For instance, callers are required to press 1 or say “Service” and be taken to the department for service then press two or “Sales” If they wish to talk to someone in the sales department, and so on.

IVR solutions can support multi-level menus, which means you can gather additional information prior to deciding. For instance, if the customer selects the department for service and a sub-menu asks about the specific product they’re calling regarding. In this is how the IVR could forward the call to the specific team who is responsible for that product.

IVR is often employed in conjunction with automated call distribution (ACD) solutions. ACDs utilize information from the IVR, together with metadata about calls to put callers in an orderly queue and prioritize their calls prior to routing the caller the agent next in line that is most suited to assist the customer as fast as is possible. When used together, they will reduce wait times and boost the number of calls that your agents are able to take in a day.

Important IVR Features

Historically, IVR served as a basic ACD. It would give callers various options and would then it would then route the call based on the input. In the present, IVR is being used to perform a variety of tasks than just handling calls, from giving access to account information to taking surveys , and even accepting payments.


Most of the time customers contact call centers to find the answers to a few questions. “Where is my package?” What’s the balance on my account? When do you have to in business?” IVR enables businesses to answer these basic questions without the need for human intervention and allows agents in bustling call centers to concentrate on larger issues that require human interaction.

The capabilities of Interactive Voice Response for self-service don’t just allow you to answer questions. IVR can be used to allow customers take actions that have traditionally required assistance from another human. For instance, IVR could be used to modify an account’s PIN, sign up accounts, or take requests from clients.


The process of obtaining payment information on the phone can be a hassle particularly when the information is lost in the translation. According to a study from Zendesk customers don’t like repeating themselves. About 40% of customers said repeating themself was among the most irritating aspect of poor customer service. It was the third most requested solution.

IVR payment features eliminate the tedious task of providing the payment details to an agent which then inputs the data in the system for payment. Instead the IVR is linked to an online payment processor and the customer inputs the payment details. This means that there is no necessity for customers to repeat their information, and also reduces the chances that data will be wrongly entered.

Do I need to use an IVR System?

Contact centers and companies which have high call volume will benefit from an interactive voice response the most. Actually, they would not function without it, especially in peak times of call. The bottom line is that IVR is an excellent option for any company that wishes to decrease waiting times, speed up service , and delegate tasks to the IVR so that agents can concentrate on the issues that require human involvement.

Call volume is having little or nothing to do with be concerned with whether you should use an interactive voice response system or not. According to a study by Zendesk 68 percent of customers are unhappy when they’re transferred between departments. The report also revealed that over 50% of respondents indicated that they would switch to an alternative after one bad experience. IVR redirects calls to the correct person at the first try and agents do not have to switch calls several times, which can reduce the rate of churn.

How Do I Set Up an IVR

In the past, IVR was a very complex piece of technology to manage. You’d need to invest in additional IT infrastructure that could support the IVR and an IT expert who was highly compensated to oversee the entire process. This requires scaling this solution when your company expands. This is because increasing numbers of users will require more equipment, which will cost more money and requires more time to setup.

Today things are more straightforward. Cloud phone systems do not require any additional infrastructure. Therefore, there is no need to spend money on more infrastructure or personnel to manage and deploy it. Cloud phone systems are also more simple to grow (up as well as down) because they don’t require new equipment. All you need to do is purchase additional licenses and create those users accounts.

Frequently Answered Questions

What’s the difference between the IVR and ACD?

IVR can be described as an automatic telephone system that welcomes customers and collects data about them through voice. ACD uses call metadata with the information from IVR and places the call into an inbox, gives it a priority and route following a series rules. Although both options are often utilized in conjunction with each but they are completely separate VoIP features.

Do I require VoIP to make use of IVR?

There is no need for an internet connection to use IVR. IVR can be utilized using traditional landlines or VoIP. Remember that IVR is typically offered in conjunction with VoIP services. Furthermore, VoIP providers–especially those hosted in the cloud–make it much easier to set up and manage IVR than with traditional landlines.

What is the difference between inbound IVR and the outbound version?

It is also the most frequently used type of IVR. It is utilized to answer calls from incoming calls like the case of companies who need to ensure that calls are answered 24 hours a day using an auto attendant, place calls on hold or utilizes automatic call routing. Outbound IVR is used for automated dial calls like surveys notification, appointment reminders, and other calls.

What are the features available in IVR Systems?

The most important characteristics of IVR systems are voicemail and voice response technology. touch-tone responses, messages according to the time of the day, and access to accounts using authentication.