How Interactive Voice Response (IVR) Works

by Dave Roos
Browse the article How Interactive Voice Response (IVR) Works
Many companies are switching from
staffed receptionists to interactive
voice response
Photographer: Fred Goldstein |
Agency: Dreamstime
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IVR allows callers to enter prompts so they're immediately directed to the
right department.
Tim Boyle/Getty Images
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Introduction to How Interactive Voice Response (IVR) Works
Meet Emily. Emily works for Bell Canada, answering phones for the customer service department. She's
New Brunswick, got her degree from Carleton University and enjoys listening to music in her spare time
"Emily" is the name of Bell Canada's interactive voice response (IVR) system (her bio was provided b
When a customer calls with a question about their bill or to talk to a support specialist, they'll talk to Em
pre-recorded voice, Emily guides them through the menu options, using speech-recognition software to
difference between "billing" and "support." If the customer wants to talk to a "real" customer service rep
zero. Emily won't be offended.
It's hard to think of a customer-oriented business that hasn't made the switch from live operators to IVR
credit card company, you can use the IVR to pay your balance or report a fraudulent charge. Airlines us
reservations and check the real-time status of flights. Pharmacies use IVRs for refilling prescriptions. An
uses IVRs to route calls to separate extensions or to access the company phone directory.
Large and small businesses have adopted IVR technology because it saves money that would otherwis
breathing (expensive) employees. An IVR system's effectiveness is rated by the percentage of callers w
operator. The lower the percentage, the more successful the system. Of course there are some IVR sys
the option of speaking to a live operator. But even among IVR fans, that's considered bad practice.
So how do these automated phone systems work? Are we actually talking to a robot or just a smart piec
to learn more about the technology behind IVR systems.
IVR Systems
IVR systems are an example of computer-telephone integration (C
way for a phone to communicate with a computer is through the tone
on the telephone keypad. These are known as
Each number key on a telephone emits two simultaneous tones: one
high-frequency. The number one, for example, produces both a 697-
that's universally interpreted by the public switched telephone netwo
A computer needs special hardware called a telephony board
understand the DTMF signals produced by a phone. A simple IVR sy
computer hooked up to a phone line through a telephony board and
software. The IVR software allows you to pre-record greetings and m
can select using his telephone keypad.
More advanced IVR systems include speech-recognition software th
communicate with a computer using simple voice commands. Speec
has become sophisticated enough to understand names and long str
perhaps a credit card or flight number.
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With interactive voice response, callers are routed to the right department
or can obtain simple information.
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On the other end of the phone call, an organization can employ text-to-speech (TTS) software to fully automate its outgoing messages. Instea
possible responses to a customer query, the computer can generate customized text-like account balances or flight times and read it back to
automated voice.
Many of today's most advanced IVR systems are based on a special programming language called voice extensible markup language (vxm
components of a VXML-based IVR system:
Telephone network -- Incoming and outgoing phone calls are routed through the regular Public Switched Telephone Network (PSTN) or ov
TCP/IP network -- A standard Internet network, like the ones that provide Internet and intranet connectivity in an office.
VXML telephony server -- This special server sits between the phone network and the Internet network. It serves as an interpreter, or gate
interface with the IVR software and access information on databases. The server also contains the software that controls functions like text-to
recognition and DTMF recognition.
Web/application server -- This is where the IVR software applications live. There might be several different applications on the same serve
service, one for outgoing sales calls, one for voice-to-text transcription. All of these application are written in VXML. The Web/application serv
VXML telephony server over the TCP/IP network.
Databases -- Databases contain real-time information that can be accessed by the IVR applications. If you call your credit card company a
current balance, the IVR application retrieves the current balance total from a database. Same for flight arrival times, movie times, et cetera. O
can be linked to the Web/application server over the TCP/IP network.
[source: VoiceXML Review]
A company or organization can choose to purchase all of this hardware and software and run it in-house, or it can subscribe to an IVR-hostin
service charges a monthly fee to use its servers and IVR software. The hosting service helps the organization customize an IVR system that
provides technical support should anything go wrong.
Now let's talk about some of the most common uses of IVR systems.
Common IVR Applications
One of the most common uses for an IVR system is to route calls wit
the past, you'd hire a receptionist or a switchboard operator to answe
route the callers to the right extension. An IVR system is especially u
customer-service calls. The system can present a caller with a list of
questions about the nature of the call. If possible, the system itself ca
frequently asked questions and route the rest of the calls to trained s
IVR systems are ideal for retrieving simple, real-time information from
times are a good example. Each week the movie listings are updated
This database can also be used to populate the movie theater's Web
made to the theater, the caller can look up movie times in the databa
keypad commands. The same system can be used for checking acc
recent credit card purchases, checking flight schedules, refilling pres
scheduling car maintenance, university class registration. The list go
IVR systems are also useful for sales. A sales department can set up
callers can fill out using their telephone keypad. When the form is co
then fax or e-mail a copy of the form to a member of the sales staff. A sales department could also use the IVR as a virtual brochure highlight
product or service with an option for speaking to a live representative at any time.
Marketing departments and political pollsters can use the outgoing call features of IVR systems. A political campaign could set up an outgoing
a poll that voters can fill out over the phone. A marketer could gauge a customer's interest in his products or services. For those interested in
pitch, they could press a key to talk to a sales associate.
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IVR systems can be used to answer simple questions so employees can
focus on more difficult problems.
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IVR systems can also be used as electronic notification systems. Let's say your organization has employees who work from home and are ba
The IVR system can be programmed with employee contact information: home phone number, cell phone, fax number, pager, e-mail address
to be routed to that employee, the IVR system will try each and every contact method in succession until a connection is made.
An interesting use of IVR technology is for transcribing medical records. Doctors currently record their patient records and send the audio to a
service. But with powerful voice recognition software, a doctor could call up the IVR system, record his notes and have a transcribed copy of
faxed to his office.
So what are the advantages and disadvantages of using an IVR system instead of live operators? Read on to learn more.
Advantages of Using IVR Systems
The biggest advantage of IVR for small and large organizations is to
Answering phone calls takes a lot of time, and not every phone call d
a trained employee. IVR systems can take care of most of the freque
an organization receives (office hours, directions, phone directory, co
questions, et cetera) and allow customer service reps, salesmen and
to concentrate on the harder stuff.
If a large company is able to shave even a second off the average le
with a live operator, it can save them hundreds of thousands or even
[source: Human Factors International].
IVR systems have the advantage of making callers and customers fe
attended to, even if it's just by a machine. If you have a simple quest
quick answer from a computerized operator than to wait ten minutes
a human being.
Another advantage is that IVR systems don't sleep. They don't take l
go on vacations to the Bahamas. An IVR system can be available 24 hours a day to field questions and help customers with simple tasks.
An IVR system can make a small company look bigger. Let's say you work from home as a consultant. By using a hosted IVR service to answ
already appear like a larger organization. You can get tricky by adding several menu options for different departments, all leading to separate
IVR hosting plans even set you up with an 800 number to look more official.
Subscription IVR hosting plans make it easier for businesses and organizations to use these automated phone services. This is a big advanta
only large companies with big telecommunications and computing budgets could afford the hardware, software and staff to run in-house IVR
Now check out the next page to learn about the disadvantages of IVR systems.
Disadvantages of Using IVR Systems
The greatest disadvantage of IVR systems is that many people simp
machines. Older adults may have a hard time following telephone m
instructions. And younger callers get frustrated with the slowness of
The problem with IVR systems is that it's hard to design a good one
one. Here are some of the most common user complaints with IVR s
Menus are too long. Experts recommend that no menu should exc
Customer Management Insight]. This makes it easy to remember the
waste the caller's time listening to tons of choices.
There's too much information. When writing a script for IVR system
amount of extraneous information possible; for example, info on how
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Some companies still offer live customer service as callers often dislike
talking to automated machines.
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IVR systems are helpful in many circumstances and are increasingly
being used to save money.
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system, hours of operation, extension numbers, et cetera. Wait for a
request more information instead of offering it all up front.
Voice prompts are hard to understand. This could be caused by tw
save money, the organization didn't hire professional voice talent and
audio over the phone instead of in a studio. Or, if the organization opted to use an automated voice, they may have chosen cheap text-to-spe
to understand.
Sales departments need to be careful when using IVR systems to receive customer calls. If a customer or potential customer has shown enou
pick up the phone and call to find out more about a product, he doesn't want to feel like he's being ignored. So if a sales staff is going to use I
or an automated order form, it must make it clear that the caller can talk to a live representative at any time.
People are particularly adverse to receiving automated calls as part of telemarketing campaigns or polling. It's bad enough to get a call during
to sell you health insurance, but it's even worse when that guy is a computer.
Now let's look at a few IVR companies and the specific products and services that they offer.
IVR Providers
Let's take a look at a few of the most popular IVR service providers:
inContact. Voxeo offers two basic options for leveraging its IVR techn
an organization, you can either buy Voxeo's servers and software an
you can subscribe to its IVR hosting service and pay by the month.
Voxeo's IVR technology runs on the VoiceCenter platform. VoiceCen
can be integrated with existing telephone and Internet networks usin
An advantage of the VoiceCenter platform is that the software is writ
so that in-house or third-party developers can write customized IVR
many larger companies already have Web/application servers and d
easy to integrate the VoiceCenter server into the corporate network.
Voxeo claims that its hosted IVR service can save a company thousa
hardware, software, administration and maintenance costs. By Voxe
company $3,000 per phone line to set up an in-house IVR system, re
installation and configuration by the IT staff [source:
$0.11 a minute for its hosted IVR service with a minimum monthly ch
unlimited number of phone lines.
Voxeo focuses its marketing attention on the open nature of its IVR platform. It even gives away its software to third-party developers so they
that make the system even more robust.
PlumVoice offers technology and services that are very similar to Voxeo. It sells on-site server and software solutions as well as off-site, full-s
PlumVoice also sells lots of pre-built IVR applications customized to different industries and different-sized organizations. The advantage of th
an organization can deploy an IVR system quickly by recording a few menu options and integrating with existing databases.
InContact is different than Voxeo and PlumVoice in that it only offers subscription IVR hosting, not in-house server and software configuration
similar to those offered by Voxeo and PlumVoice, with more of a focus on simple user controls.
The inContact service comes with a software package called inControl that lets an organization easily customize scripts and IVR system conf
graphical interface. You drag and drop boxes into a virtual workspace. Each box represents a different step in the automated call process. On
prompt to enter a pass code and another box plays hold music. You can also preview the call sequence before deploying it live.
All three of these companies offer free demos or trial versions of their products and services.
We hope this HowStuffWorks article has helped you better understand the world of IVR. For more information on interactive voice response a
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out the links on the next page.
Lots More Information
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PlumVoice
Voxeo
inContact
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