What Is IVR? A Guide for Business Owners

IVR stands for interactive voice response, but in business terms, it refers to a large umbrella of software-based communication solutions. Some IVR companies offer basic services that allow small businesses to record automated voicemail messages and route calls, while others offer website, database, and CRM integration as well as robust reporting and bill processing options.

In the past, IVR was limited to telephone calls. During an IVR call, an automated voice recording would interact with a client, and in return, the client would press corresponding buttons to navigate the system. Today, many IVR systems have speech recognition built in, so people can talk directly to the system rather than push buttons, but there are still many low-cost IVR services that offer button-response systems.

Visual IVR is another term you'll see on IVR company websites. Usually, companies that offer visual IVR also offer traditional phone IVR. Visual IVR essentially moves the first part of the customer interaction from the phone (e.g., listening to a recording and pushing buttons) to a device like a smartphone or computer.

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 onsite: 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.

Self-service: 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.

Integration: 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.

Like many tech solutions, there is a vast price range for IVR systems. The most expensive IVR systems are on-site (not hosted) telephony systems. The process of implementing an in-house system may include paying installation fees, rental fees for servers and phones, ongoing maintenance fees and software fees.

Systems such as these are often thousands of dollars in setup charges alone, in addition to high monthly charges. Most SMBs opt for hosted services because they're less expensive and faster to implement. Even so, there is variety in terms of service charges and pricing structures among hosted IVR services.

The lowest-cost cloud services typically offer IVR for a monthly subscription fee, with rates starting at around $50 per-month, per-user and going up to well more than $100 a month per-user. Pricing structures like these typically don't have service contracts attached, so they can be terminated or changed at any time. The level of service you opt for will typically correlate with how many features you receive and how many minutes of IVR time are included in your subscription (watch out for overage charges).

Higher-priced cloud services, which offer integration, analytics, speech recognition and other sophisticated features, are typically contract-based, and the prices and terms vary depending on features as well as the number of lines being provided. If you're opting for a more comprehensive system, like one of these, the best option is to request a price quote on the company's website.

8x8 – Primarily for large-scale businesses, 8x8 offers IVR systems that are specifically designed with call centers in mind. CRM integration, contact center analytics and multichannel communication (phone, web, email, chat) make 8x8 popular with large corporations. 8x8

Aspect – Aspect offers everything from call center IVR services to Chatbots and interactive text response. Aspect's products can be integrated with CRM systems, scaled to meet the needs of enterprise-level clients, and bundled to include detailed analytics and reporting. Aspect

CallFire – CallFire's IVR is comprehensive in scope, with options for inbound and outbound calls, surveys, polls, call routing, appointment reminders and payment processing. CallFire's technology relies on keypad responses rather than verbal responses and their drag-and-drop menu makes it simple for users to set up their own systems. CallFire

Century Link – Century Link offers voice and touchtone IVR in multiple languages. Their hosted IVR solutions offer full integration with existing databases and CRM systems. Century Link's IVR can be used in any business but is particularly good for call centers. Century Link

Five9 – Five9 is an established cloud contact center software company and one of the most reputable providers of inbound IVR services, call center services, and outbound services like predictive dialing. Five9's small business targeted cloud solutions include integration with CRM packages, analytics, monthly or annual pricing and no long-term contracts. Five9

Freshdesk – Freshdesk's small business friendly IVR allows users to mask existing phone numbers with alternate numbers for IVR purposes, route calls, transfer calls, convert phone requests to work-order tickets and pay on a per-minute basis. Freshdesk

Genesys – Genesys provides clients with access to a variety of customer service software solutions, including IVR that's comprehensive enough for enterprise-level call centers. Multichannel routing, voice self-service, CRM integration, outbound dialing and real-time reporting are just a few reasons to consider Genesys. Genesys

inContact – inContact's IVR software lets customers choose the type of help they want, such as self-service or speaking with an agent. The software supports both automated speech recognition and text to speech, and features automatic callback for customers who can't wait to speak with a representative. inContact's IVR solution also integrates with popular CRM applications. inContact

New Voice Media – NewVoiceMedia's IVR is a cloud-based and self-service solution. The system allows businesses to change their IVR menus to reflect the ever-changing behavior of their customers without the need for IT assistance. New Voice Media

Plum Voice – Plum Voice offers both comprehensive cloud-based IVR services, complete with speech recognition, text to speech and hundreds of languages available as well as less-expensive, self-service, inbound IVR systems. Plum voice

Pronexus – Pronexus provides self-service IVR that's customizable and multilingual as well as text-to-speech services and predictive dialing for outbound calling. Pronexus also has built-in functionality for polling and specialties such as patient notifications (for the health care field). Pronexus

Smart Action – Smart Action offers state-of-the-art IVR that's powered by AI. Smart Action offers self-service voice IVR and SMS texting as well as chatbot services, Facebook messenger and Skype communications. Smart Action is best for medium to large businesses rather than small or microbusinesses. Smart Action

Synclio – Synclio claims its clients can get a business line in 30 seconds. It offers SMBs the ability to program their phone systems to answer routine questions and route calls and responses recognizing keypad prompts or voice responses. Synclio also offers live reception outsourcing. Synclio

Talkdesk – With more than 25 prebuilt integrations and comprehensive reporting features, Talkdesk offers streamlined IVR solutions. Talkdesk's products are ideal for enterprise-level businesses needing advanced analytics and highly customizable service options. Talkdesk

Telzio – Telzio offers business VoIP systems with IVR features like call routing, menus and custom recorded greetings. In addition, businesses have the option to automatically forward calls to an operator if a caller doesn't respond to IVR prompts. Telzio

Upwire – Upwire offers affordable IVR, voice SMS and email communications solutions that don't require any coding or IT experience to set up. Like other DIY type companies, Upwire offers a drag-and-drop interface to make launching your IVR system simple and quick. Upwire

Verascape – Verascape offers a range of cloud-based IVR solutions, including self-service IVR, text messaging, bill payment and order processing, call routing, outbound notification and more. Verascape also offers a 30-day free trial for self-service IVR and/or SMS without transaction or setup fees. Verascape

VoiceGuide – For a low starting cost of $99 per-line, VoiceGuide offers on-premises or cloud IVR systems that are easy to integrate with existing systems. In addition, VoiceGuide provides clients a user friendly interface for building out their IVR menus without coding. VoiceGuide

Voicent – Voicent's IVR systems are built for marketing, communication and customer service. Their cloud pricing system starts with a base level cost of $19 a month and then increases as customers select their own plans and features, which means you only pay for what you need. Voicent

Voicestamps – Voicestamps specializes in IVR systems that process secure telephone payments. Voicestamps services are compliant with the PCI, FTC and FCC guidelines, and is used broadly for bill collections companies and general payment processing. Voicestamps

XO Communications – A Verizon company, XO Communications provides an array of business solutions, including hosted IVR services. XO Communications' IVR services are comprehensive and include all the functionality a growing business could need, from call routing and customized messaging to call recording and speech recognition. XO Communications