The benefits of an IVR system

What is the point of setting up an Interactive Voice Response (IVR) attendant? Is this technology a new addition to the growing list of features in telephony? What is it and should your business have it? Let’s do a deep dive into its history and figure out where we are going.

History of the IVR

It might be easy to think that IVR attendants are a fairly recent invention (what with the current version it’s in and how feature-packed it is). The IVR, however, has its history dating back to the 1930s.

The Voder, invented as a relaxation oscillator that analyzed words in the English language, laid the foundations of what would eventually become the IVR we enjoy today. What it did was it produced buzzing tones to match words, starting from basic to complex sounds.

It wasn’t until the 1960s, during the rise in popularity of private branch exchange (PBX) systems, when businesses started to appreciate the potential of IVRs. With the high maintenance and operational costs of call centers, they needed a quick and efficient method for routing customer inquiries.

Call centers from this period were still very primitive in its scale and thus were still held back to a degree. When touch-tone dialing was made available for consumers, this allowed for the earliest integration of IVR systems to PBX systems at the time.

The goal: first call resolution

An interactive voice response attendant offers a mode of interaction where customers can select options from a set of automated options. A pre-recorded message plays and gives the caller a menu set with options reflecting the numbers on a dial pad, the choice of which leads the caller to a queue with a team of agents trained and specialized to handle their inquiry.

This creates a deflection, which is a method of routing a customer to an appropriate channel, and thus makes sure that a ticket is resolved as quickly as possible. This saves a company time and resources and allocates said resources to the proper channels.

Automation as an efficiency tool

One use of having an IVR setup is automation, and a good example would be the following flow:

The benefits here are twofold: a self-service solution is provided that satisfies a customer’s need without talking to a live agent (and thus saving time and allocating company resources efficiently).

  1. A customer calls in to check on the status of an order
  2. When the IVR detects the caller ID, it can then access the records for this customer
  3. The caller is then provided the status of an order
  4. The customer relationship management (CRM) system logs this interaction for other members to see

Other benefits of having a proper IVR system

The pros of having a properly placed IVR attendant doesn’t just end with deflection and automation.

  1. It also allows customers to speed up the simple and mundane steps in the customer journey. With a self-service option in place, they can automate the customer identification process, enter their respective issue, and enter current ticket numbers to allow for immediate escalation.
  2. If a business has limited hours of customer service operation, an IVR system can create a method for customers to solve smaller issues that don’t require an agent. It can even have a recording in place with instructions for self-service solutions. And in the event that they do need to talk to an agent, they can book appointments through IVRs as well.
  3. An IVR system can spell the difference between the need to hire more team members and saving on operational costs. IVR systems are more affordable and cost-effective.

The future of IVR

As of 2015, 68% of customer inquiries are made through call centers. With the majority of people constantly on their phones, the expectation for fast and efficient resolution is always high.

IVR does help with speeding up the customer journey and the benefits are undeniable. However, people’s expectations change with the times too. The standard IVR model needed updating.

So as to cope with this need for immediate customer resolution, companies have developed technologies designed to complement the IVR structure. One modern example of this are interactive virtual assistants.

These interactive virtual assistants are finding their way to major industries like retail, food distribution, and even government offices like the United States Citizenship and Immigration Services.

Another great example is that of Fairprice, Singapore’s biggest supermarket chain. They have also adopted the smart IVR model; by calling their hotline, customers can place orders with the help of an interactive assistant. It is intuitive and very futuristic!


Should your business adopt an IVR system? Most definitely. If your goal is to create a better customer experience while maximizing your operations, a proper IVR system is the answer. Take note, however, of the qualifying word “proper.”

In a 2019 survey conducted by Vonage, a staggering 61% of customers reported a bad customer experience because of poorly-designed IVR systems. This statistic highlights the importance of properly setting up one’s IVR and making sure that they reflect the business well.

Because an IVR is a customer’s first interaction with a business, it dictates where and when it ends. Customers get frustrated and are likely to drop a call when faced with a badly-designed IVR menu. Remember: an excellent customer journey isn’t just quick and efficient, it should also be easy to use!

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