Conversational Ivr

Conversational IVR: The What, Why And How

Today’s modern customers want more – They expect faster resolution to issues, personalized experiences and effective self-service. Even though  traditional IVR systems are deployed with an intention to provide self-service via phone, reduce call volume and increase agent productivity, these outcomes are rarely realized. Customers usually choose phone-based interactions for escalations, disputes and complex issues. 

Traditional IVR systems with touch-tone and dialog-based commands, complex routing and convoluted navigation menus often fail to resolve the needs of customers and end up frustrating them more.

Consequently, the calls are routed to live agents, which increases the operational costs and decreases productivity. 

According to an IBM report, companies across the world spend more than $1.3 trillion to serve 265 billion customer calls each year. One can only imagine the savings companies will make, if they can reduce the customer call time handled by human agents. 

Companies, therefore, need efficient ways of resolving the problems of traditional IVRs and at the same time address customers’ issues effectively. And the solution? Conversational IVR.

Powered by AI, conversational IVRs provide a unique voice-based and hands-free solution where customers can interact using natural language as opposed to choosing the options from a long static menu offered by traditional IVRs. Conversational IVR systems can also anticipate the caller’s needs and can determine the context of a conversation with the help of  Natural Language Understanding (NLU).

The What – Understanding Conversational IVR

Powered by automated speech recognition (ASR) and NLU engines, conversational IVR can comprehend both the meaning and the rationale of the question. Getting the intent of the customer right can in itself reduce handling times by  eliminating detours and ineffective routes to resolution.

With conversational IVR users can now talk to the system to address their queries without having to press buttons and select options. This IVR system understands the semantics of the request, determines the user intent and guides the user through the correct sequence. This improves the quality of self-service and eliminates complex navigation through the menu.

In a traditional interaction, the agent authenticates the customer and evaluates the history to provide a tailor made solution. This entire process can be automated using an intelligent IVR system to provide a personalized experience to customers.

The Why – Benefits of Conversational IVR

Reduce operational costs

It’s imperative that enterprises optimise contact centre costs without compromising on customer experience. Conversational and intelligent IVR systems have been integral for achieving cost-efficiency in many ways.

One of them is by improving call resolution and deflection rates, thus lowering contact center costs. Conversational IVR also fosters better agent utilisation, thus reducing labour costs.

Reduce contact center call volume

Since traditional IVRs comprise of list-based menus, they are not very effective in addressing customers’ requirements. Often, after taking the caller through a long list of options, they may not address the issue faced by the caller at all. In such a scenario, calls are directed to live agents for resolution.

With conversational IVRs however, customers can directly speak about their issue in natural language and the system suggests the best possible solution for it. This shortens the entire process of customers having to make several attempts for resolution, thus reducing the contact center call volume.

Read More: 7 Actionable Tips To Reduce Contact Center Call Volume

Agent Productivity

With ineffective resolution of issues through traditional IVRs,  customers are compelled to contact human agents. With more calls stacking up, agents will be incapacitated to handle the large volume of calls leading to call abandonment, long waiting and handling times, in turn affecting their productivity.

With conversational IVR, customers can be engaged effectively through the IVR system without having to connect to the agent, unless in rare scenarios. This leaves the agents with more time to attend to critical matters that need human intervention and resolve issues conclusively leading to improved agent productivity.

Learn More: Human Hand-off in Service Desk Bots

Improve Customer Experiences And Improve CSAT 

Since conversational IVRs foster better call resolution and quick turnaround time, the customer experience naturally goes up. This leads to greater customer loyalty and improved brand perception, increasing the overall CSAT.

Customer-centric Self-Service

The motto of self-service IVR platforms is to resolve issues quickly  and reduce IVR abandonment.

Conversational IVRs address this challenge effectively by seamlessly authenticating  customers, quickly understanding complex requests, and predicting customer requirements to conduct business transactions and resolve customer issues efficiently.

Adapts To Customer Behavior And Needs With The Help Of AI

Backed by AI and machine learning, conversational IVR systems can build their own database and intelligence based on customer interactions. This helps them improve their overall capability in solving customers’ issues.

This data is then used in successive interactions to efficiently adapt to the customer’s behaviour and needs.

Higher Resolution Rates for Better CX

With the ability to discern complex requests, conversational IVRs can route calls to agents who are best suited to resolve specific issues than just routing calls to the first available agent. This leads to higher rates of resolving customer issues while improving customer experience.

The How – Key considerations When shifting to Conversational IVR

Clearly, there are several benefits to adopting conversational IVR systems. However, the shift in technology comes with its own challenges. Following are some of the key aspects that companies should consider when transitioning to conversational IVR:

  • Understand your customers: To provide the best experience, companies should have an understanding of their customers journey, different touchpoints, their goals and challenges. They must also acknowledge that different customers will respond differently to the new self-service option. Incorporating a feedback program is essential to understand customers’ experiences and expectations.
  • Capture use cases: Shortlist the use cases/customer journeys which would be the most beneficial for conversational IVR. Each use case needs a different conversation flow. So, you must also consider any new use cases that can come up due to new product launches or initiatives.
  • Tracking Performance: The shift to conversational AI platforms must be measured in order to evaluate its success and track progress. An important KPI to be considered is the  Customer Effort Score (CES) – a metric that indicates the effort customers have to exert for their issue to be resolved. Effort is a key influencing factor of customer loyalty and organizations should aim to keep it as low as possible.


With customers demanding more agile, quicker and faster ways of getting their issues resolved, intelligent IVR systems are becoming key to enhance and modernize customer service. In the coming years, we can see many organizations deploy conversational IVR systems to cut costs, improve agent productivity and enhance customer experience.

If you’d like to learn more about this topic, please feel free to get in touch with one of our Contact Center AI experts for a personalized consultation.