The Enterprise Guide to Interactive Voice Response (IVR) Software

Modern day businesses require a reliable IVR system to succeed. When call flows are optimized and callers are routed to the right department, the first time, your customer experience (CX) metrics improve. Intuitive IVR software is critical to your bottom line and growing customer expectations. See how it can benefit your enterprise below.


Behind every great business is an even greater customer support and service system. The challenge many enterprises face is that the number of these channels is rapidly increasing each and every day. But regardless of whether a customer is chatting, emailing, or tweeting your business, statistics show they’d rather be calling you. And with an influx of inbound calls, and rising expectations among your customers, the way you manage those calls is critical to your organization's bottom line. That’s where having an Interactive Voice Response (IVR) comes into play. 

An IVR is a communications tool that uses an automated routing system to route your customers to the correct departments, make payments, and provide them with company information based on the corresponding number selected from their phone keypad. IVRs are a great way to streamline your employees’ time and your business's money, and present an affordable way to optimize your inbound and outbound call center. 

But with so many different options, selecting the right IVR for your enterprise can be tricky. This is the comprehensive guide for learning which IVR is right for you and how your enterprise can utilize IVR software to improve your customer experience, save your agents time for more productive conversations, reduce costs, and lead to better satisfaction metrics.

What's IVR?

IVR is an abbreviation for Interactive Voice Response. It works by allowing your incoming callers to navigate a company's phone system before speaking with a live agent. Another term often used to describe IVRs is phone tree, due to the many “branches” you can have extended from your main menu. 

How IVRs Work

IVRs are an example of computer-telephony integration (CTI). To communicate with the computer, corresponding frequencies are sent from the phone based on the menu option the caller selects. These frequencies are known as DTMF, or dual-tone multi-frequency signaling.

Enterprises typically invest in more intelligent and advanced IVR systems to handle large inbound call volume and service outbound needs as well. Advanced IVRs use a special programming language called voice extensible markup language (VXML) for speech recognition service in addition to touch-tones. In order to work, a VXML needs:

  • A telephone network: Where calls are routed through your PSTN or VoIP network
  • A TCP/IP network: Internet
  • A VXML telephony server: The integration that connects your phone network and Internet service. 
  • A web application server: Where the IVR software will live. Depending on your needs, there may be several of these. As in, one for outgoing calls and one for customer service.
  • A database: Where personalization is made possible. Advanced IVRs use the database to provide real-time info. For example, this is how a bank could provide a customer with their account balance.

Your company could purchase all the hardware and software and manage it in house - of course, that requires a heavy up-front investment and ongoing IT support to maintain it. Or, you could find a hosting service who will set it up quickly, scale with your organization, and provide support for a monthly fee. 

Types of IVRs

There are a variety of different types of IVRs for your enterprise to choose from. It’s important to understand the business functions in which your business is hoping to benefit from the IVR before investing in the software. Some questions to consider might include:

  • Do I want the IVR to help with inbound and/or outbound calls?
  • Do I want the IVR to have voice recognition?
  • Do I want the IVR to integrate with my CRM or other technologies? 

Depending on how you answered these questions, you may need either a simple (basic) or intelligent (advanced) IVR system. 

Simple IVR Systems

Simple IVRs use DTMF tones to connect callers with the information they need. This occurs when callers use their keypad to navigate pre-recorded menu options to collect information without speaking with a live agent, or have their calls routed to an agent or department if their query needs immediate attention.

Intelligent IVR Systems

Today, more enterprises are leaning towards intelligent IVR systems. Also called advanced IVRs, these software systems use automation to help your business service high inbound call volumes and can even help with outbound call efforts. A few examples of an intelligent IVR features include:

  • Determining why your customers are calling 
  • Automatically routing customers to the correct agent while simultaneously telling that agent why the caller needs assistance 
  • Integrating with your CRM or Helpdesk to minimize agent manual tasks such as logging calls and opening/closing support tickets. 
  • Offering self help features such as making a payment  
  • Calling customers back who have requested a call back as opposed to waiting on hold
  • Text-to-speech (TTS) capabilities to fully automate and personalize outgoing messages
  • Forwarding incoming calls to external phone numbers 
  • Integrating with your existing PBX like MS Teams to call customers for appointment reminders, collect feedback, and more.
  • Omnichannel support (chatbots, SMS messaging, online payment portals, etc.) 

At the end of the day, all of these features not only provide a better experience for your customers, but it allows you to scale your organization's services. 

IVR Call Routing Strategies

Your IVR is the first interaction your inbound customers have with your brand. If call flows aren’t set up properly, you could risk your customer experience metrics. Having a routing strategy is paramount to ensure their questions get answered, the first time. Here are seven call routing strategies that you can use for your business phone system.

1. Self Service Routing

This routing strategy allows customers to get the information they need without having to speak with an agent, saving agents time to handle more complex inquiries. When selecting a number option on the IVR, a virtual attendant will provide the caller with the details according to their selected prompt.

Example: A customer looking for a business's store hours calls the telephone number and is met with a virtual attendant, connecting them to hear store hours over the phone without having to speak to an agent.

2. Direct Routing

This strategy is pretty straight forward. This is when customers select their need and are routed to the correct agent who can best service them. 

Example: When a customer wants to speak with customer service, the IVR will present numeric options such as: ‘1’ for sales, ‘2’ for operations, ‘3’ for customer service. When the customer presses ‘3’ they are routed to an available customer service agent. 

3. Time-Based Routing

Depending on the time of day a customer calls, the IVR system will determine where they get routed. 

Example: If business hours are closed, customers will be routed to an agent in an available time zone. 

4. Geographic Routing

This is when callers are directed to agents in locations closest to them.

Example: A caller may be prompted to enter their zip code by the IVR. The system will then route them to the company location closest to that caller. 

5. Least Used Routing

This is when a caller is connected with the agent who's been waiting for a call the longest. 

Example: If a caller is routed by the IVR to the customer support team, they will be directed to the agent who’s been waiting the longest for a call. 

6. Skills Based Routing

Skills-based routing is when the IVR takes the inputs customers make and directs them to agents with the corresponding skill sets. 

Example: If a caller inputs their language preference as Spanish, then the call is routed to a Spanish speaking agent. 

7. Data-Directed Routing

The IVR uses data to route customers to the proper agent. 

Example: A customer calling their bank enters their account number and the IVR notices the account is a business checking account, and routes them to a business checking account agent. 

8. Priority Routing

The IVR pulls tagged VIP customers to the head of the call queue.  

Example: A profitable customer calls into the sales department and the IVR registers the VIP tag, then routes that customer to the head of the queue to the next available agent. 

Improving Call Center KPIs with IVR Software

You can’t measure what you don’t track, and key performance indicators (KPIs) are a must within the call center to ensure you’re meeting your objectives, including SLA. 

IVR reporting helps you keep track of metrics that affect the customer experience, the productivity of your agents, and identify areas that are working well or need improvement. Your IVR is one way to create a drastic improvement among your call center KPIs. Here’s what you should be measuring and why it matters:

Average Handle Time (AHT)

This is the average time of the call from start to finish. The best way to measure this is to include the time the customer spent navigating the IVR, hold time, and agent time. Keep in mind the average AHT drastically changes from industry to industry. But as a good starting place, Call Centre Magazine says the standard AHT is 6 minutes and 10 seconds. 

Whether you don’t have enough staff to support call volume or your agents aren’t properly trained, a high AHT tells you that somewhere within your process there is a problem. An IVR can help resolve customer issues without a live agent (self service), route them to the right agent the first time, and even provide a queue callback option which will ultimately decrease your hold times. 

Call Abandon Rate

Nobody likes to wait on hold. In fact, more than half of customers will hang up after being on hold for six minutes. The call abandon rate measures the percentage of inbound calls that result with the customer hanging up before reaching a live agent. It’s calculated by taking the total number of abandoned calls and dividing it by the total number of inbound calls. 

The average call abandonment rate is 8.7%. A higher percentage usually indicates that your customers are frustrated. Your IVR can offer call back options, something 75% of customers prefer and advise them of the expected hold time. 

Keep in mind, however, that a high call abandon rate may also indicate that your IVR needs improvements. Your customers may be hanging up because:

  • The reason they’re calling isn’t listed
  • They IVR stops them from reaching an agent
  • The menu is too long 
  • They had to repeat themselves to often

It’s important to continuously find means of optimizing your technology in ways that will support your KPI metrics. 

Call Containment Rate

This is the measurement of callers who completed self-service through the IVR. If you have a poor call containment rate, it means your IVR needs improvement. 

The main reason this metric is so important is it can have a direct impact on your call center costs. If your IVR isn’t configured to manage self-service requests, not only are you paying for the technology, but now you are paying for an agent's time to solve the customer’s request.


First Call Resolution (FCR)

First call resolution is the metric that calculates a customer's satisfaction after the first call with a live agent- meaning, they didn’t call back later with the same question, and they weren’t transferred to another agent. 

An IVR can improve this metric by giving customers the ability to solve their problems and get answers to their questions without ever speaking to an agent- which is still considered  resolution on first point of contact. Customers who want simple things like account balances, the ability to make payments, and to get updates can easily be taken care of with the help of your IVR, if programmed correctly.  

KPIs are a great way for call center managers to identify how satisfied customers are and where technological updates may be needed. And because the IVR automates so many manual tasks, it allows your agents to do more revenue-driven duties!

5 Reasons an IVR Is Good For Your Bottom Line

At the end of the day, your organization is looking to be as efficient with its resources as possible while enhancing the customer experience. An IVR is an excellent tool in your tech stack for lowering operational costs, improving employee happiness, and enhancing the customer experience. Let’s drive into five of the leading benefits of an IVR for your enterprise:

1. Lowers Cost Per Call

Running a call center isn’t cheap, but it's necessary for your company's success. You are paying for each minute a customer spends on the line. So the longer they sit on hold, the more likely they are to hang up, which ultimately leads to them calling back and sitting on hold again. Not only does this make for a terrible customer experience, it’s a vicious and pricey cycle that could have your customers running to another competitor.

With self-service features, call routing strategies, queue callback, and a great menu - customers can quickly resolve their requests on their own, or quickly be directed to an agent that can help. The IVR streamlines the process, which can lower your cost per call by up to 30% (translating to huge cost savings for the organization). 

2. Increases Agent Success & Productivity

More advanced IVRs can integrate with your current tech stack. CRM and other SIP integrations give your team access to customer history, order history, and previous interactions with your agents, allowing them to go into the conversation more equipt. Not to mention, having all your tools unified keeps your agent from switching between technologies all day - keeping them more productive and capable of servicing more customers. 

IVRs also direct customers to the agent who is most likely to resolve the issue. This allows agents to build expertise and feel more confident that they are performing at their best. 

3. Improved Customer Experience

The numbers don’t lie. Customers will not stay loyal to brands with lousy service. In fact, 89% of consumers who experience poor service with your brand will leave for your competition. 

An IVR can help with three key pieces of the customer experience equation: speed, convenience, and knowledgeable help. Speed, by directing them to the proper agent. Convenience, by providing them self service options and the ability to be routed to a live agent at any time. And knowledgeable help by routing customers to the right agent the first time, and providing those agents with omnichannel history of the customer’s previous requests. 

4. Meeting Customers Where They're At

Customers expect more and more from the brands they use. They want to be able to communicate with you from anywhere - on any channel. And traditional IVRs can only help customers through phone calls. But smart IVRs are using SMS messaging and chatbots to meet customers right where they're at, all hours of the day. 

5. Reduces Operational Costs

Cloud-based IVRs are much lower in cost when compared to in-house IVRs. One in-house line will set you back around $1,500. However, one cloud-based line averages to about $810 per line. Not to mention, cloud-based IVRs are fast to set up (practically overnight), require little to no IT support, grow with your organization with no additional hardware expenses, and 24/7 support is included should you have any questions. 

3 Use Cases For Enterprise IVRs

Cost savings, improved agent productivity - it all sounds great. But you may be wondering how to actually apply the IVR into your business. Of course, depending on what product or service you sell, this answer can differ. Here are three ways to envision an IVR helping your particular business. 

1. Ecommerce & Retail

Your IVR can help with customer service functions such as order verifications, shipping updates, and product returns. It can also help with marketing and sales functions such as reminding customers to re-order or offering them an exclusive offer based on their purchase or browsing history. 

2. Service Providers

An IVR is a great resource for service providers such as logistics companies, banks, travel and hospitality groups, and medical practices. Your IVR can help customers:

  • Easily book appointments and reservations
  • Receive reminders
  • Collect personal information (such as identity verification or insurance information)
  • Track shipments
  • Make payments
  • Reorder checks, prescriptions, etc. 

3. Marketing Departments & Agencies

Automation is hardly new to most modern marketing departments and agencies. But not all businesses are utilizing IVRs as a marketing opportunity. Your IVR can help marketing collect customer satisfaction surveys, place outgoing calls for offers, manage customer reward programs, and expand customer research. 

IVR Software Providers

There are several key players who dominate the IVR market. And it might be hard to determine which will provide the best solution for your business. Here at AVOXI, we pride ourselves on our VoIP and IVR capabilities. But the goal of this post is to educate you and help you select the best provider for your organization. 

For that reason, we are breaking down the top 5 IVR providers so you can compare their offerings.

Solution Provider Plans Starting at Great for IVR Complexity
Twilio $150 per user Enterprises Intelligent
CallHippo $30 per user SMBs & Startups Simple
Aircall $40 per user SMBs Simple
8x8 $125 per user Medium & Enterprise Businesses Intelligent
AVOXI $4.49 (voice) | $39.99 per user (contact center) Businesses of Any Size Intelligent

While each provider is unique in what they offer, we always like to give kudos where its due. Below, you'll find some of the providers' most stellar features included within their IVR software. 

  • Twilio: WhatsApp integration for customer service, API, and per-hour pricing option
  • CallHippo: Call recording, multilingual IVR, and analytics
  • Aircall: Call recording, API & webhook, and softphone for desktop, Android, and iOS
  • 8x8: Customer experience analytics, omnichannel routing, conversational AI technology
  • AVOXI: Call routing (skills-based & priority) with queue callback, advanced analytic reporting (IVR & SLA), API & UCaaS/CCaaS integrations

Finding the Right IVR for Your Enterprise

If your organization is looking to transform its call center by improving productivity, lowering costs, and enhancing customer satisfaction, IVR software is a must. Researching various IVR providers can help you feel out different offerings, so you can make the right choice for your business needs. We’re AVOXI, and we help brands better connect and serve their customers with reliable, high-quality voice and contact center solutions. Here’s what you can expect with intelligent IVR from AVOXI: 

  • IVR Reporting. Easily interpret prompt setups and identify patterns that could impact your CX on a centralized analytics dashboard. 
  • International IVR. Use your IVR to route phone calls to anywhere around the world. 
  • Queue Callback. Improve CX and reduce abandonment with the option of a virtual hold for customers, receiving a call back when an agent becomes available. 
  • Custom Routing. Combine IVR and ACD to offer callers the most efficient call experience possible. 
  • Unlimited Menus. Set up as many IVR menus as your business needs with route options to users, numbers, groups, queues, or other IVRs. 
  • Expansive Voice Coverage. Activate inbound and outbound numbers from 170+ countries in minutes, including hard-to-find local DIDs. 
  • Secure & Reliable SIP Connections. Wherever business is done, expect carrier-grade reliability, enterprise-grade protection, and 24/7/365 support. 


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