IVR Meaning & Definition

Interactive voice response (IVR) is a telephony technology that filters phone calls based on callers’ responses through either vocal feedback or selecting numbers on the phone’s digital or analog keypad. Businesses adopt IVR primarily to automate phone calls, give their representatives more time, and collect customer data through the calls. IVR is programmed to recognize voice responses: for example, if the automated system asks a question and then requests yes or no, the caller will then respond with either yes or no, and the system transfers them accordingly.

An IVR system is helpful for allowing customers to access bank information, for example, or organizing insurance calls based on account number and type of request. IVR is also useful for collecting information, such as through a telephone survey, in which a user is prompted to answer questions by pushing numbers on the phone’s touch screen or keypad.

Advantages and disadvantages of IVR

IVR helps businesses to organize their phone call systems and more efficiently funnel callers through the system. The automation also provides additional time for human representatives or agents to spend on more specific requests and tasks. A good IVR platform will allow a company to customize their automated voice prompts and make them more personable. IVR can also be used for training. If a company sets their phone system to record calls, service representatives and agents can study them to better understand effective calls and customer service, and the company can use them to improve the customer experience.

However, IVR has caused frustration for customers as much as it benefits phone representatives:

  • Some IVR systems don’t respond well to customer voices, and callers may be frustrated because they have to repeat themselves to be heard.
  • IVR systems sometimes go through too many steps, which may cause customers to leave the call early and can be confusing if the steps aren’t clearly delineated.
  • Using IVR significantly slows a phone call.
  • IVR can be prime ground for fraud if caller identities aren’t authenticated.

Companies should avoid a lot of steps in their IVR system, customize the message for personality, and ensure that every step is concise. They should also provide the option of talking to a human representative; many automated menus may not include all the options that a customer needs. To combat fraud, if your IVR system offers bank, health, or insurance information (or any other sensitive data), employ authentication procedures so that you provide the information to the right person.

Jenna Phipps
Jenna Phipps
Jenna Phipps is a contributor for websites such as Webopedia.com and Enterprise Storage Forum. She writes about information technology security, networking, and data storage. Jenna lives in Nashville, TN.

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