What is IVR? A Buying Guide for Business Owners (7 Min. Read)

Questions about Interactive Voice Response systems? Here’s an article with suggestions on how it can help reduce your call times and assist your customers calls. By Business News Daily

Interactive Voice Response systems

If you’re a small business owner, odds are you’re always looking to optimize your employees’ time and your business’s money. IVR systems offer an affordable way to streamline the call process for your customers and employees, but with so many service options available, it can be difficult to know where to start the IVR adoption process.

This guide will walk you through IVR, from the basics of this new communication technology, to features you should consider, to recommended services, so you can make an informed decision.

By allowing customers to enter their information online, as well as what type of customer service they need, calls can be routed instantly without going through a touchtone or voice-activated menu. Instead, customers can connect with a customer service rep directly on the website, receive a call from a qualified rep or receive a number to call which will connect them with the right individual.

The type of IVR system you choose depends primarily on call volume and the way you want to use IVR in your business. Here are just a few common uses for IVR that may inform the type of system you implement.

Customer service:

 Rapidly expanding businesses often find themselves without adequate customer service or support staff. Since IVR systems can be deployed quickly and scale easily, they can reduce wait times for customers. Plus they alleviate the need to hire employees to field questions and route calls. For general customer service needs, an inbound IVR system is usually sufficient, but if you foresee requiring outbound IVR in the future, choose an IVR company that offers comprehensive services.

Payment processing

and collections:

 Automating payment transactions and collections is a common use for IVR. In addition to outbound collections calls, IVR services make it possible for customers to call into companies, obtain their own billing information or account balances, and then make payments themselves. IVR systems that offer payment processing are typically more expensive than those that don’t, but for many companies, the cost is still lower than hiring individual customer service representatives to process payments.

Marketing and communication:

 Outbound IVR can be used for marketing purposes, such as alerting potential customers about a new sale or product, as well as for communicating with existing customers. For example, a dentistry office might use an outbound IVR system to make automated calls reminding customers of upcoming appointments, while a call center might use IVR to make sales pitches to potential clients. If marketing is the driving force behind your company adopting an IVR system, look for services that specialize in call-center IVR and predictive dialing.

Cloud or on-site:

 In hosted IVR, the IVR system resides in the cloud, and the responsibility for the maintenance and management of telecommunications and servers falls on the vendor. On-site IVR, on the other hand, integrates with a business’s existing telephone systems, and the maintenance of those systems falls on the company. Today, most companies offer cloud-based IVR, and unless your business has specific reasons for maintaining your system on-site, it’s probably best to opt for a hosted service.

Inbound and/or outbound:

 The two basic types of IVR services are inbound and outbound. As we’ve established, inbound IVR systems handle incoming call volume, while outbound IVR systems make calls on either a total or partially automated dialing basis. There are many companies that offer both inbound and outbound IVR services, but IVR services that are for inbound only tend to be less expensive than those that allow for outbound calling. Before you shop around, make sure you’re clear on the type of IVR functionality you require.

Speech recognition:

 IVR systems that have built-in speech recognition allow users to speak aloud in response to questions rather than only use their phone’s keypad. If your company needs a basic IVR system to route calls in your office and give out basic information, like your location and hours of operation, odds are a simple touchtone system will serve your needs. Speech recognition systems are often pricier than basic touchtone systems, but they’re worth the cost if your IVR needs are more complex.


 When an IVR company offers “self-service” IVR, it usually means the product/service is intended for basic use for inbound calling. Many companies offer comprehensive IVR services and then separate, lower priced, self-service IVR options. If your business only requires simple call routing or bill paying, and you don’t need outbound calling, self-service is probably the way to go. It should be noted that many self-service options do not have speech recognition.

Text to talk:

 It’s always worthwhile to ask if your IVR fees include any text-to-talk services. Text to talk is exactly what it sounds like. To set up your IVR system prompts using text to talk, you simply type in the prompt (like “Please press 4”), and then you select from a menu of voices to say that prompt. This type of service gives your IVR system a professional and consistent sound, and negates any need to hire a voice actor or do the recordings in-house. You should also ask if there are limitations to any included text-to-talk services, and if there are limits on how many recordings you can make and how often you can change your menus.


 Not every IVR company offers full integration with existing databases, websites and CRM systems, but many do. As you might expect, services that offer integration are often higher priced than those that don’t, but they bring a lot to the table.

In an IVR system that’s not integrated, a caller that’s routed through to a live person will have to relay to that individual who they are, what their customer ID is and other pertinent information. That live customer service rep will then have to look up the customer’s history in the CRM or database. In integrated systems, on the other hand, a customer calling in could say (or type) their name or password, and the IVR system would instantly access their information.

Integration is essential for automated bill paying through IVR services. It’s also helpful for delivering a higher level of customer service in general, since it makes it easier for customers to access their own information and easier for representatives to access information for the client they are speaking to.

Dashboard and analytics:

 Before signing up for an IVR service, ask for a demo of the software system’s dashboard and inquire about options for viewing analytics and pulling reports. Viewing the dashboard ahead of time should give you some idea of how easy it will be to access your IVR system and change it as needed. Additionally, consider any data reports that might be useful for your company and inquire about those types of reports before making a final decision.

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By Mona Bushnell