22. April 2021 Blog

CloudTalk Insider #3: IVR

Wondering what exactly an IVR system is and how one can help your company? Look no further. In this article, we’ll look at what Interactive voice response systems really are and how you can use them to delight both your customers and agents.

"For sales press 1, for customer support press 2, or for business press 3". 

"Please input your customer ID on the keypad and press hash." 

"Please stay on hold, you are being connected to an agent." 

"Sorry, all of our agents are currently busy. Please stay on the line and your call will be answered as soon as possible. Alternatively, press 1 to leave a message or press 2 to have an agent call you back when they’re available." 

Is there anyone here who isn't familiar with such messages? Doubtful. It's getting rarer and rarer for companies to answer calls straight away without the help of a virtual assistant, an Interactive Voice Response system (IVR). In essence, IVR works just like a typical office receptionist: it greets incoming callers, answers simple questions about hours or delivery status, schedules appointments, and routes all calls to the right people.

A human receptionist can only answer one call at a time though, and  only during the hours that the office is open. There are also multiple things that might get in the way of doing the job efficiently - we’re only human after all. An IVR system, on the other hand, can handle many customers simultaneously, so a high amount of calls at peak times are not a problem.

But that’s not all. An IVR menu can also immediately route all calls seamlessly to the right department or agent 24/7, without ever needing a break. We all know how much callers hate being transferred from agent to agent and repeatedly explaining their issues. That’s why an Interactive Voice Response system is exactly the tool that can help both small local companies and large enterprises alike respond to customer demands for swift customer support, and provide an excellent experience for all callers.

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How exactly does an IVR system work?


The primary technology behind Interactive Voice Response is dual-tone multifrequency (DTMF), which means touch tones from your telephone. Whenever you press one of the buttons on your phone’s keypad to respond to an IVR prompt, it creates a sound at a specific pitch. Through that pitch, the Interactive Voice Response system recognizes which option the caller picked and reacts accordingly. Besides touch tones, IVR solutions nowadays also use voice recognition technology that allows callers to use spoken commands instead of just pressing keypad buttons. 

The newest addition to those technologies is Artificial Intelligence (AI). By using speech recognition together with call history and caller information, an IVR system can accurately determine a user's reason for calling and answer them immediately without the need to go through several options. Let's say the caller wants to check their order delivery status - with a regular IVR menu, they would need to listen to multiple options before finding out which one allows them to do that. AI can make this process far simpler, as the caller just needs to state their reason for calling (e.g. “check delivery status"), and the system will automatically give them the desired information.

What can IVR help you with?

An Interactive Voice Response system’s main job is to route all incoming calls to the most suitable agent or department, as such reducing the need to transfer calls. If you have ever called a company and were told after asking a question or explaining your issue that you have the wrong agent or department, you will know how frustrating this can be.

For 72% of consumers, explaining their problems to multiple people is a sign of poor customer service. With IVR, companies can decide which calls should go to which (groups of) agents, and therefore ensure that each caller will be immediately directed to the right person for their needs. It will also direct all incoming calls to the first available agent in a given group, thus reducing the hold time and improving the caller's satisfaction as well.

IVR can also take some workload (and stress) off your agents' shoulders by answering simple questions or issues. For example, if a caller only wants to check their bank balance or ask about office hours, do they really need to wait in line just to get connected to a human agent? Not necessarily, as those types of questions can be quickly answered by a virtual assistant to leave your agents with more time for complex customer issues. The system can make your agents feel more confident as well, because skills-based call routing means that they will be directed questions or issues relevant to their specific knowledge or experience. Such problems can often be solved on the first call unless they are particularly complex.

What are the benefits of using an IVR system in your business?

Considering how much time we've spent talking about how such solutions can help with routing calls, you might think that's the only benefit of an IVR system as that's the only thing it can do. But the truth is quite the opposite - having an IVR system in your company can provide you with far more. Let's have a look at the biggest benefits:

  • Providing great customer support - with IVR, even small local companies can build a professional brand image and offer exceptional customer support to their clients. For example, you can set different options to be used in the menu so that callers can interact with it in their preferred language and get routed to an agent who can also speak it, greatly improving caller satisfaction. 
  • Increasing agents’ efficiency - as IVR can be tasked with answering simple questions, that frees up some time for agents and lets them focus on more complicated customer questions or issues. Agents can also be more confident when answering calls, as skill-based routing ensures they have the necessary experience and knowledge to help the callers who are directed to them. 
  • Boosting first call resolution - clients hate being transferred from agent to agent or having to call several times just to get their issues resolved. In fact, 67% of customer churn occurs because a company fails to resolve an issue during the first call. With the help of IVR, callers can immediately be connected to the right person and get a solution to their issue on the first call, naturally improving that metric. 
  • Reducing operational costs - an IVR system acts as a virtual receptionist that can swiftly direct even a large volume of callers to the right department or agent, 24/7. Not only does that mean businesses can save money on hiring additional personnel, but agents’ productivity also increases since they can focus on resolving complex customer issues and providing excellent customer support. 
  • Lead generation and increasing sales - many companies nowadays use IVR greetings or a wait time window to inform customers about new products, ongoing promotions, or offers for loyal clients. But that's not all they can do - an IVR system can also qualify callers for specific campaigns based on the answers they give and, this way, estimate how likely they are to buy a product or use a service.

What are the main features of IVR?

To work to the best of their capabilities, modern Interactive Voice Response systems contain various features and tools that are responsible for gathering data about callers and either guiding them to the most suitable agents or allowing them to find the answers to questions themselves. Let's have a look at some of the most useful features: 

  • Skills-based routing - with this feature, call center managers can automatically send a customer to an agent who has the relevant skills and knowledge to solve a specific issue. For example, a caller who needs to speak to an agent in English will be directed straight to an agent who can answer their questions and speak English fluently. 
  • Ring groups - sets of phone numbers or extensions that ring together whenever one of them is dialed, for example, when someone calls sales. This helps with decreasing waiting times for customers, as the first agent available can answer the call.
  • Queue callback - this is a handy feature for peak hours when call queues may be long. Rather than being kept waiting in line, callers can ask to be called back by an agent and then hang up. The agent will then call the customer back when their turn comes or when an agent is available to make the call. 
  • Intelligent reconnect - various things can happen during a call, including accidental disconnects or technical issues. Intelligent reconnect allows customers to call the same agent without going through the menu and explaining their problem to another person, thus giving them a far better customer experience. 
  • Multi-level IVR - an IVR menu can be designed to have several levels and prompts, allowing callers to be routed more precisely. After someone calls a company and reaches its IVR menu, they will be guided through a series of prompts and then routed to the agent that can best assist with their issue. This type of menu is ideal for companies with multiple products or services or those who want to route callers precisely. 
  • Customized greetings - a great way to show your company's professionalism is to set up personalized greetings that your callers will hear when reaching the IVR menu. For example, you can create different messages to play when a customer calls outside business hours, during holidays, or at peak times.


If your agents are overwhelmed with the number of calls they have to answer and redirect to other agents, or spend too much time answering basic questions while other callers have to wait in line, then an Interactive Voice Response system might be just what you need to boost both your agents' productivity and your customers' happiness. As IVR keeps working 24/7 without taking breaks, you can be assured that not a single customer will be left waiting without help.

And after implementing some of the most useful IVR features inside our CloudTalk app, your company can enjoy higher first call resolution and customer satisfaction rates. The job satisfaction of your agents who will be able to focus on what's really important - providing excellent customer service to each caller - will also be significantly improved.