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What is IVR [Video]

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All of us have used IVR system more than we can think. Still the question, What is IVR remains unanswered entirely. IVR is used to handle huge of calls at a little cost. IVR is used for automatic call distribution as well as serving the caller by providing required information with minimal human effort, thus reducing the costs. Interactive Voice Response has been around for many years now and has many applications and is used in many Industries. IVR has almost replaced the phone receptionist or phone attendant. This is the reason in olden days there always used to be a post of phone receptionist in offices; an automated attendant now takes this care in IVR system.  Most of the Call centres use IVR for Customer Support; Even offices use IVR very extensively. This article tries to explain everything you would like to know about IVR, to make maximum advantage of IVR systems in your organisation. There are lots of IVR solutions available on the market; this article will help you to select the right IVR Service Provider.

IVR Full form is Interactive Voice Response.

How IVR works  

Generally, IVR is used to handle inbound calls, but nowadays it is used as outbound IVR also. Caller expresses his/her intent by pressing the keys on the phone, and the IVR system (or IVR server) receives what is known as DTMF codes. Based on this DTMF codes IVR generates a response which can be another voice response or some action like transfer to some phone extension. Modern IVR systems also log all the IVR actions and responses in the IVR system so that it can be analysed later for improving the IVR service.

What are IVR components

Generally speaking IVR is comprised of voice and DTMF tones, however, if we go into detail IVR system has mainly five elements.
  1. An incoming number which receives incoming calls from people. It may be a toll-free number or a regular number.
  2. DTMF codes are the response which caller gives to the system after calling. DTMF code (also known as touch tones) is generated when the caller presses Keys on the phone.
  3. Voice responses are the series of responses which are played when a particular key is pressed. This can be pre-recorded voice, or some computer voice is generated in real-time based on some information received from software. (Example knowing bank balance from an IVR system).
  4. IVR Custom actions are the actions that are taken by IVR system on the receipt of DTMF codes. These actions can be as simple as transferring to some extension or changing some information in the IVR software itself.
  5. (Optional) CRM or customer relationship management system is the software which can be used to customise IVR in real-time, give a response to caller accordingly and also take necessary actions inside CRM. Example: you enter Customer ID and PIN, and CRM informs you about the balance in your account. Another example can be getting order status by using IVR.

Types of IVR

IVR can be classified in many ways, one of the parameters is complexity.
  1. Simple IVR

    Press one for sales, two for Support, three for Accounts and nine for the receptionist is one of the simplest forms of IVR. Once you press your IVR selection, the phone line is transferred to the desired extension. Simple IVR is where you have only one level of choice or options.
  2. Multi-level IVR

    Multi-level IVR has more than one levels of options. In above example (1) if you also add language selection, then it becomes multi-level IVR.
  3. Advanced IVR

    In Advanced IVR the call distribution rule is more complicated and not just voice responses and call routing. In this case, the calls may be routed on the basis of CLI (Caller Line Identification) and lookup to CRM system. Example: Transfer all Platinum Customers to Team A and other customers to Team B. This is typically used in a contact centre.
  4. Customised IVR

    This is similar to Advanced IVR, but it includes more complex actions and call distribution. Here the role of CRM software is much more prominent. This is done using the technology called Text to Speech TTS.  

Inbound and Outbound IVR

When we talk of IVR, we think of inbound IVR, where a caller calls a number and then the IVR system takes some actions based on their inputs VIA DTMF codes. However, in recent times there has been a very widespread use of outbound IVR. In outbound IVR, outbound calls are made automatically by the IVR system, the IVR system plays some voice file and prompts the users for input. Outbound IVR may or may not require inputs. For example, you get a reminder call for premium payment from your Insurance company or a reminder call for your Car Service which is due. There is no input required from your side; You just listen to the information and the IVR system acknowledges the same to the CRM software. In other cases, IVR system after informing you about the Car Service due, IVR system may prompt you to press some key to talk to Customer Care Executive.

Advantages of IVR

The popularity of IVR itself is a significant proof that has lots of advantages.
  1. Cost Reduction: The most significant advantage is, of course, cost savings. The Cost reduction happens because the calls landing to humans are drastically reduced, if not eliminated.
  2. Non Office Hours: IVR can work out of office hours also. Calls received outside office hours can be responded by the IVR System. Escalated calls can be handled on next working day.
  3. Prompt service. Imagine a person calling bank just to know what is his balance. What is this call is handled by Human, it will take a lot of time to respond to Customer. Customer will have to wait for the response. IVR System can do this in almost real-time without any delay.
  4. Work from Home: Many companies use this to support their customers. Customers call the Customer Care number, where they are greeted with the IVR message, and then if required the call is transferred to the Agents who might not be sitting in the office.

Disadvantages of IVR

Let’s be frank, none of enjoy waiting for more than few minutes and answering those stupid questions which IVR keeps on asking us. Take an example of calling any of the Telecom operators; you have to wait for 15-20 minutes before you ACTUAL QUERY gets solved. This is the most significant disadvantage of IVR system. However, if proper planning is done for IVR, then this challenge can be handled. 

How to make IVR System interesting

Interactive Voice Response calls can be made more interesting by using the IVR system smartly, rather than over-doing it. There are many ways to achieve this. One of them is to understand the customer behaviour and use CRM & IVR integration intelligently. Most importantly, transfer the call to an agent before the customer reaches annoyance limit, by reducing the waiting time. This is especially required in Customer Service.  

IVR Usage

  1. Marketing – IVR to Enquiry.
  2. Customer Support Management. – IVR to Ticket.
  3. Call centres  
  4. Banking and insurance
  5. Medical
  6. Telecom companies

IMR interactive message response

This is not an interactive voice response, because there is no voice response. But the concept and technology are similar, where you use Messaging (SMS) platform to interact with the users. Take an example of online contests (like KBC), where you answer questions with some particular keywords and the IMR system does the rest of hard work.

Future of interactive voice response  


We are talking of IVR based on DTMF tones input as a response from the Callers, but there are usage scenarios where the voice is used as input from the caller and IVR system uses NLP (Natural Language Processing). This applies lots of AI (Artificial Intelligence) and ML (Machine Learning). This might look fascinating, but it has its challenges
Imagine a Siri like IVR system, where you literally talk to the system instead of typing codes


Also known as interactive video response system. Just as voice interaction, you can even talk to a live artificial person, and it will respond to your queries. Here the advantage is that the Computer can also understand your gestures, mood and personality and answer the questions accordingly.
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  1. Abdul Rehman June 14, 2019

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