Why you should switch from traditional IVR to Conversational IVR

Interactive Voice Response (IVR) technologies have evolved significantly since their onset in the 1930s. What hasn’t changed is their convenience for businesses. In fact, they’re so popular that over 152,872 companies are currently using one or more of these softwares¹. Like many other technologies in the calling field, traditional IVRs have been shaken to their core by AI, giving life to Conversational IVRs. Today, customers’ demands for quick interactions call for an evolution and simplification of traditional IVRs Read on to discover why the time to switch from traditional to Conversational IVR is now.

Traditional IVRs vs. Conversational IVRs: what are the differences?

Traditional IVRs

Traditional IVRs are automated phone systems used to route callers to the appropriate departments, people, or services. These systems play pre-recorded messages and rely on touch-tone keypad inputs to process caller requests. 

If you’ve ever tried to contact any business via phone, chances are you’ve found yourself navigating through the menu of a traditional IVR telling you to “Press 1 for this matter, Press 2 for this other matter,” and so on.

At their core, traditional IVRs were designed to perform basic tasks without the need for human intervention.  They rely on multi-level auto attendant menus to navigate the user through a pre-built path that eventually leads them to the person or department they’re looking for. 

Despite their contributions to early efficiency, traditional IVRs are not without their drawbacks. The limitations this brings are multiple, but they could be summarized in these two points:

• The support a traditional IVR can bring is limited to pre-set scripts. If a user needs something that’s outside the predetermined scope of the traditional IVR, they won’t get the help they need.
• Traditional IVRs are hard to update. Updating them requires re-programming, editing, and re-recording menu prompts, things that only IT or tech people know how to do.

This is why 98% of customers find traditional IVRs frustrating or try to skip them entirely. The top things customers dislike about this technology are as follows:

• 45% feels they’re forced to listen to irrelevant options
• 43% thinks the reasons they’re calling for are not listed
• 37% perceives menus to be too long
• 35% thinks traditional IVRs prevent them from reaching an agent

So how can a business remove these alarming percentages of unhappy customers?

Conversational IVRs

Conversational IVRs are an advanced evolution of traditional Interactive Voice Response systems. These modern, AI-powered platforms leverage natural language processing (NLP) to interact with callers in a way that’s more intuitive and human-like. 

Gone are the days when callers had to press a sequence of numbers to get the help they needed. With conversational IVRs, users can speak naturally, saying things like, „I need help with my bill“ or „When’s your next available appointment?“ 

This shift from rigid menus to flexible, open-ended prompts represents a significant breakthrough in customer service technology.

At the heart of conversational IVRs is Natural Language Processing (NLP), a branch of artificial intelligence that enables systems to understand, interpret, and respond to human language. NLP allows these systems to process diverse accents, phrasing, or even multiple queries in one request. For instance, if a user says, „I’d like to cancel my subscription and also need a refund,” the IVR can identify each part of the query and provide appropriate responses without confusion. By recognizing intent rather than focusing on pre-set options, conversational IVRs create smoother interactions.

Businesses across industries have embraced these systems to enhance the customer experience and improve efficiency. An example? Healthcare providers can use conversational IVRs to manage appointment scheduling and prescription refills. A patient can simply state, „I’d like to book a follow-up appointment for next Wednesday,“ and the IVR, integrated with the organization’s scheduling tools, can offer available time slots and confirm the booking. 

For another example, retailers apply this technology to improve the online shopping experience, enabling shoppers to track orders or inquire about return policies by speaking naturally. Similarly, in the travel industry, these systems assist passengers in checking flight statuses, rebooking missed flights, or requesting special assistance for trips. 

Financial services also benefit from conversational IVRs, offering account management capabilities like reporting lost cards or setting up payment plans, all through intuitive, voice-based commands.

One concern for companies when evaluating conversational IVRs is handling complex or ambiguous queries. For instance, if a caller’s request requires nuanced understanding or involves sensitive details, the system may struggle and eventually escalate the query to a live agent. That’s why it’s more important than ever to ensure smooth escalation when it’s needed.

Conversational IVR vs. Traditional IVR: differences 

Resolution times

Traditional IVRs’ response times depend on A) how efficient the IVR menu is, B) how tech-savvy the person on the other side is. 

Imagine a customer calling their telecommunications provider to see their latest bill. If the traditional IVR menu is well-structured, it might immediately greet them with options like, „Press 1 for billing inquiries, Press 2 for technical support.“ Sarah presses 1 and is quickly routed to a sub-menu where she hears, „Press 1 to view your bill, Press 2 for payment issues, Press 3 to speak with an agent.“ She then presses 1 and her issue is easily solved.

However, if the IVR menu is overly complex, customer experience changes entirely. Upon calling, they face a list of irrelevant options, “Press 1 for general inquiries, Press 2 for promotions,” none of which clearly direct them to billing. They have to either guess the closest match or suffer through additional sub-menus, significantly increasing the time it takes to get the help she needs. Adding to this, if the structure loops them back to irrelevant options, they could become stuck or misrouted, leading to even greater delays.

Moreover, a tech-savvy customer who is familiar with navigating automated phone systems might quickly guess the correct sequence to reach the right department even with an inefficient system. On the other hand, someone less experienced with technology, might struggle to keep up with the prompts or even hesitate to make selections, unsure if they’re correct. 

With Conversational IVRs, on the other hand, resolution time can’t be anything but immediate. “Can I see my latest bill?”, the customer asks. And the bill is shown to them immediately, tech-savvy or not. 

24/7 service

AI doesn’t work on office hours. It works overtime, all day, everyday. Even during holidays.

Conversational IVRs can be an easy way into offering round-the-clock customer service. Traditional IVR systems don’t allow for such a revolution: they might be available during the night, but their limitations wouldn’t allow them to solve issues like conversational IVRs do. If a customer needs something that’s out of the menu, they still have to call back the next day.

Conversational IVRs on the other hand ensure customers always have access to information and assistance, no matter when they reach out.

For instance, in the e-commerce industry, conversational IVRs can handle queries like, „Is this item in stock?“ or „Where’s my order?“ even in the middle of the night. Customers shopping from different time zones or during late hours often need quick resolutions, such as checking product availability or addressing payment concerns. Instead of waiting for human agents during business hours, they receive fast, accurate answers, keeping the shopping experience smooth and satisfactory.

The benefits of 24/7 availability extend to businesses too. By integrating AI systems, companies significantly reduce the need to have human agents covering odd shifts or holidays, saving on operational costs, yet maintaining efficiency. This constant availability not only enhances customer satisfaction but also strengthens trust in the brand. When customers know they’re never left waiting, they’re more likely to return for future purchases or services. 

Furthermore, AI provides consistent performance, ensuring zero gaps in service delivery and reducing the chances of errors that might stem from human fatigue during late or extended hours.

Time optimization for agents and customers

By removing the strict menus traditional IVRs are based on, customers naturally save time when they need support. But the real people who benefit from this are customer service agents.

When conversational IVRs are the first point of contact, there’s a higher chance customers will solve their problem without human intervention. This way, calls will only reach agents when it’s strictly necessary, allowing them to focus on more complex tasks and optimize their time. 

Agents can address more involved cases, like resolving technical malfunctions or troubleshooting personalized customer issues, contributing to a more satisfying and impactful role. Not only does this lead to improved operational efficiency, but agents also experience higher job satisfaction by focusing on meaningful and less monotonous work.

IVR Update

Traditional IVRs are significantly harder to update because they are built on static, pre-defined menu structures that require manual reprogramming each time a change is needed. Whether it’s adding a new option, updating existing ones, or reconfiguring a call flow, these updates often demand technical expertise and can be both time-consuming and resource-intensive. 

Not only are most conversational IVR based on no-code interfaces, meaning there’s no coding or technical skill needed to update them. They also feature machine-learning. This allows them to adapt and improve dynamically over time. These systems can fine-tune their responses and routing capabilities based on user interactions and feedback, automating much of the optimization process. For example, if customers repeatedly ask for a new type of service or use specific language that isn’t currently recognized, conversational IVRs can be updated quickly to accommodate these needs without overhauling the entire structure. 

Conversational IVRs: the intelligent solution

The answer to these challenges lies in AI-powered conversational IVRs, such as Imagicle’s Virtual Agents and Virtual Receptionist, designed to respond to customer requests quickly and naturally.

Unlike traditional IVR, which presents a menu of options for customers to choose from, Conversational IVRs work through AI-powered speech recognition technology to understand customer requests with a singular voice prompt. This allows customers to communicate their needs in their own words, without having to navigate complex menus or follow a predetermined script.

Conversational IVR systems use artificial intelligence and machine learning algorithms to continually improve their ability to understand natural language, and in some cases they can even recognize accents and dialects to provide a more personalized experience. 

In conclusion, instead of pressing buttons to reach the agent they’re looking for, customers can simply state their demand, and the AI behind conversational IVRs will immediately bring them to the right person to speak to or directly answer their question.

Looking for a way to implement conversational IVRs? Drop Imagicle a line