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10 May 2021

How IVR Is Used Today, and What Its Future Holds

Ivana Ćosić

Head of Voice Business

Looking to learn more about Voice/IVR technology? You’re in the right place! In this article, I will give you a brief introduction into how IVR is used today, as well as how it might be used in the future.

This article was originally published on my LinkedIn profile.

IVR stands for Interactive Voice Response. It can be defined as a “telephony menu system that allows identification, segmentation and routing of callers to the most appropriate agent of an organization“. [1]

IVR is used in numerous industries to automate certain processes. The technology itself was invented back in the 1970s, and with time it developed into a vital tool for call centers, making „the most viable and cost-effective way to streamline the call processes for the clients, business departments and employees [2]“.

The main purpose of an IVR system is to service a high volume of calls and resolve simple users’ queries. This can help companies save resources for customer support, because live agents can focus only on resolving complex issues. Besides that, its integration is fairly quick and easy. 


IVR technology is mainly used by companies which need to address a lot of customers’ queries on a daily basis, and often all at the same time. It is most recognizable for its use by telecom companies (mobile network operators, or MNOs)who use it to communicate with customers regarding complaints, billing inquiries, new products or services and technical support.

Banks use IVR technology to extend business hours to a 24/7 operation – users can check their balance, transaction history and even make payments and transfers.

Airline companies use it to lower their call volume by letting IVR systems handle queries regarding plane tickets purchase, changes in the itinerary, as well as refunds.

For insurance companies, IVR system can organize and manage calls regarding products and insurance claim, which in turn, helps these companies boost their customer satisfaction.

There are many other interesting and specific use cases for IVR – for example, it can be used by farmers in the developing countries who have limited access to technology and information. “There have been a number of IVR systems deployed worldwide to connect farmers to timely and relevant knowledge. Most of these have focused on the provision of specific knowledge resources, such as weather information, market prices and government-related announcements”[3].


IVR technology can also be used as a method to process payments, which is called Premium IVR, or Premium Voice. In this scenario, content and service providers earn revenue when their customers make a phone call to a premium number.

Premium numbers are most commonly used for cases like voting, entertainment shows, competitions (the globally popular TV show The Voice is a combination of all three), games, micropayments on websites and other services which feature paid calls.

Voice-based payments can be charged on a pay-per-call or pay-per-minute basis:

  • Pay-per-call means that the caller pays a fixed price when initiating the call (e.g. 5 €), and the price doesn’t depend on the number of minutes spent in the call.
  • Pay-per-minute, as the name suggests, means that the caller pays for every minute spent in the call.

There’s also a combination of the two, where the user pays for every minute spent in the call in addition to the fixed cost of the call.


Even though IVR technology has a lot to offer and there a lot of indications that consumers seek for automation in self-service, recent studies say that “consumers still view live help as being far easier to use than automated assistance. Additionally, the majority of consumers (67%) still prefer live agent-provided service over other service options“ [4].

As reported by Telemedia Online in their 2019 IVR survey, 54% of respondents experience negative feelings such as stress (10%) and frustration (37%) when dealing with IVR technology. What bothers them the most are irrelevant options in the call menu (45%), too long menus (37%), and the fact that IVR keeps callers from reaching a live person (35%). [5]

Luckily, there is an option which combines the best of both worlds, and something we at NTH can also provide as a ready-made solution – chatbots with an integrated live-agent-takeover function. The benefit of using these is to let the chatbot answer simple user queries automatically, but also feature an option for a live agent to take over the conversation if the user is dissatisfied with the answers provided.

Nonetheless, Persistence Market Research predicts that an “increasing number of operational BPOs (Business Process Outsourcing) and individual contact centers all around the world will drive the market for interactive voice response”, as well as an increasing number of customer support and sales teams across organizations. [6]

Besides that, IVR technology is constantly evolving. The “old IVR” relied on keypad presses which opened different menus, where users had to press a specific button for a problem they needed to resolve, or for the department they were trying to reach. Modern IVR technology now comes with natural language processing (NLP) ability, which enables users to speak directly to the system, rather than typing during calls.


Artificial intelligence can recognize and interpret the caller words instead of just reacting to keywords. This results in a more organic user experience and can help users solve complex issues.

This technology is used by the personal voice assistants, such as Alexa or Siri, whose popularity is growing rapidly in the recent years. “Juniper Research has forecast that by 2022, more than 5 billion voice assistants will be in use on smartphones worldwide”. [7]

image of alexa voice assistant
Voice assistants like Alexa are growing in popularity.


In addition to the “modern” IVR technology that uses AI and NLP, the “old IVR” has another successor that is called Visual IVR. It is conceptually very similar to traditional IVR. Visual IVR uses web and mobile applications to transform traditional IVR into a digital experience. The user interacts with a visual interface by touch or click commands on his mobile or computer screen. It has two subtypes – video IVR and The Interactive Display Response System, which was patented in 2009.

Visual IVR has a lot of advantages compared to the traditional IVR. The first one being that visual IVR improves self-service. According to some, containment rate (self-service rate without agent interaction) is 15-20% for traditional IVR, and 60-70% for visual IVR. Visual IVR also has far more options regarding brand image promotion, since it uses visual aids (such as brand logos). Visual IVR can also shorten customer care calls by as much as 300 seconds, since it’s easier to use.

On the other hand, a majority of customers still prefer the traditional IVR system, because they’re more familiar with it. There aren’t that many visual IVR providers, and it still isn’t as popular as traditional IVR. That is why some companies choose to keep traditional IVR, when implementing visual IVR into their business.

What are your thoughts on the future of IVR? Do you think that advanced AI will eventually replace live agents? Engage in the conversation on LinkedIn!

For more content about Voice/IVR solutions, make sure to follow NTH Voice Solutions on LinkedIn.









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