How Interactive Voice Response Curbs Customer Service Costs

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We’ve all sat through the customer service call of doom––it’s frustrating from the customer’s side, and a costly lost opportunity on the side of the company. Thankfully, many companies are moving away from the old auto attendants and towards Interactive Voice Response (IVR) systems.

IVRs are sophisticated call systems that connect to a database of information, making them far more responsive than the old auto attendants, who could mostly just route calls. You’ve probably interacted with an IVR if you’ve checked your bank account balance online or called a company and pressed “1” to speak to a sales representative.

When done right, IVR can:

  • Help customers answer their own questions 24/7
  • Cut down on wait times by getting them to the right department faster
  • Allow you to quickly and easily scale your customer service department
  • Integrate with your CRM software to improve your customer service

A well set-up IVR both improves your customer experience and cuts down on customer service costs, making it an ideal win-win for both customers and businesses alike.

How IVR Works

IVR is like a supercharged version of the old auto attendants. Customers call in and are given an opportunity to speak or type numbers to interact with the IVR system. This can help them out in any number of ways, including routing calls, answering questions, or looking up information based on customer data.

It relies on several underlying technologies, including:

  • Computer Telephony Integration (CTI)—This allows your computer to interact with a phone system. With CTI, your customer service reps can make and manage all their calls from a central control area with a single interface.
  • Automatic Call Distribution (ACD)—This technology receives inbound calls and then routes people to the right department based on the availability of customer service reps, the required skills needed to deal with the call, and your company’s customer service priorities.
  • Dual Tone Multi Frequency (DTMR)—You know the noise your phone makes when you hit a button? That’s DTMR, and it’s used to signal the phone company that you want to do something. For example, if an IVR says “Press 7 for store hours,” you’ll hit 7, and then DTMR makes a two-toned sound that indicates that you’re being routed to the recording about hours.
  • Pre-recorded messaging—These are voice messages recorded by your company that customers access based on their needs. Carrying on with our example from above, if you press 7 and then hear a recording of someone talking about store hours, that would be pre-recorded messaging.
  • Text to Speech (TTS)—This converts text into spoken words so that your customers can have a much more natural interaction with your IVR. Unlike pre-recorded messaging, TTS happens in real-time, allowing you to quickly change scripts without having to re-record new messaging. For instance, if your hours changed, you could use TTS to create a new message without needing to re-record the original message.
  • Natural Language Processing (NLP)—NLP is the next step up from TTS, where AI reacts to what your customers say in real-time and constructs messages that provides them with the information they need or directs them where they need to go.

Once a company has an IVR set up properly, a customer should be able to call in and get help almost instantly. Far from the multi-layered menus of the past, IVRs are designed to provide high-quality service quickly, making for happier customers and lower costs. The IVR can take care of the simpler, more straightforward tasks, which frees up your customer service reps to deal with more complex cases.

Here’s another example of how IVR works:

Let’s say you wanted to book a nice weekend in a hotel for yourself and your partner.

You’d call in and be met with an NLP message from the hotel, which greets you and asks you how they can help. You’d say something like, “Book a room,” and the IVR would then either route you to booking, or, if it was set up to do so, could actually interface with the booking system and let you make the booking directly.

IVR offers a ton of convenience, but it does require some extra set-up, especially when it comes to security.

All IVRs that take credit card information or work with bank accounts, social security numbers, or other sensitive information must meet the Payment Card Industry Data Security Standard (PCI DSS), which is used to keep personal information safe. Depending on the type of information your IVR handles, you may need to adhere to additional regulatory standards about data handling and customer privacy, too.

Steps for how a call moves through the IVR system.

Is IVR Hard to Set Up?

The difficulty level of setting up an IVR depends on how complex of a system you require and how hard you want to geek out on your options. You can get a basic IVR set up pretty quickly and easily just by signing up with an IVR provider, planning out the paths you want your customers to take, recording any messaging you want them to hear, and then creating the menu and pathways within your IVR software.

If you want to get into more complex details like NLP, that’s going to take a more significant time investment. Similarly, if you’re setting up a system for a large call center, you’re going to want a good call center service to help you out with deployment.

How Much Does IVR Cost?

IVR costs range widely depending on the type of system you’re using and the complexity of the IVR you want. That being said, the newer cloud-based systems are usually pretty affordable. They usually range from just a couple hundred dollars for basic call center software, to upwards of $50,000 for a large, complex IVR setup with 100+ agents.

The good news is, once your setup is complete, you’re looking at a monthly cost of $15 to $50 per user per month. In comparison, the older Public Switched Telephone Network (PSTN) systems could cost several thousand dollars per line to set up, and they often also require ongoing maintenance and monthly user fees.

It’s also worth considering the difference between standard IVR setups, like those that only include basic call center software, and advanced IVR systems that include premium features like NLP. At the lowest end, you’re probably looking at $15 – $20 per user per month, while more advanced systems run around $50 – $100 per user per month.

IVR and Conversational AI

AI is currently having a huge impact on IVR technology. Companies like Nextiva are pioneering entirely new levels of automation and interaction with customer service, with conversational AI programs that can interact with your customers on a level that’s just about on par with a human.

This means that you can let your IVR handle all but the most complex customer service issues. Additionally, conversational AI programs learn from each call they take, which helps them to become more nuanced in their understanding of what your customers need and how they ask for it.

Conversational AI can improve the customer service experience for your customers as well. Instead of having to sit through a long list of possible options, they can simply speak to your IVR as though they were speaking to a live customer service representative. And because conversational AI can be multilingual, your customers will have an easier time communicating within the system.

However, if your business isn’t ready for conversational AI, that’s okay. While conversational AI IVR is the gold standard, even a simple IVR can go a long way in improving your customer experience while simultaneously lowering your customer service costs.

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