An AI IVR (Interactive Voice Response) is a system that uses Artificial Intelligence in an IVR menu to respond to customer inquiries in a natural and human-like way.
Early versions of IVR used number keys on the phone to interact with the users. More recent conversational IVR systems use voice input. These technologies were good for the time, but now, they can not handle the volume and variety of user requests. The rigid options of old IVRs make the users feel trapped in a system that doesn’t understand them. We don’t want our customers to repeatedly yell “representative” into their phones, now do we?
This is where AI Interactive Voice Response (IVR) comes in. For those familiar with AI, this technology is exactly what it sounds like. An AI-powered IVR menu that can adapt to user queries and respond to them naturally. This IVR can adapt to individual customer queries and respond intelligently every single time. By integrating Natural Language Processing (NLP) and Machine Learning Technologies (ML), AI IVRs offer a superior alternative to older IVR versions. Let’s uncover why that is the case.
The Technology behind AI IVRs
One of the key reasons to adopt AI IVRs is the technology behind them. We are familiar with traditional IVR systems that rely on numeric or voice input (speech recognition technology) to resolve user queries and route calls. An AI IVR, at least functionally, is the same technology. This is combined with NLP (Natural Language Processing) and ML (Machine Learning) to have natural human-like conversations with the caller. Let’s take a closer look:
Natural Language Processing
NLP or Natural Language Processing allows the AI IVR to understand and interpret spoken language. This is not very different from what happens in your brain when you are talking to someone. Similarly, the callers can interact with an IVR in the same manner as they would with a customer service agent, and the AI will understand what they need. This makes the AI IVRs more flexible to the customer’s needs. When AI can comprehend a user’s request verbatim, then it can come up with precise responses to resolve queries. This also helps the AI route the call to an agent for specific user concerns that it can’t resolve.
ML or Machine Learning
Think of machine learning as a storage drive that can actively read and learn from the data that is stored on it. The machine learns. So while an old IVR would be stuck with the pre-recorded messages, these next-generation IVR systems learn new information with each call they handle. With natural language understanding these systems first identify patterns, recognize accents, phrases, and even emotional cues. They then learn from these and improve themselves. At the contact center level, this is like having a custom IVR system for every single client that you service!
Generative AI
This tech allows for dynamic and personalized responses based on real-time information. So for example, if a customer wants to know their package information; the AI can provide specific data relevant to the customer. The customer can ask the AI to find previous orders, their order values, payment methods used and so much more. These questions will not stump the AI. Each custom request that the AI can access data for; can be met in real time. Now isn’t that awesome?
Key Features of AI IVRs
Beyond the technology, there are other key features that make an AI IVR an effective customer service tool.
Intelligent Routing
An AI IVR is smart because it can process natural language. This allows the AI to determine the nature of a user’s call and take necessary steps after that. So if a user has a question about the mobile app, the AI can redirect the call to technical support. For an accounts-related query, the call gets transferred to the account manager. An AI IVR discerns the nature of the user’s query, determines the best possible approach and then intelligently routes the call. The AI is also trained to assess the words and tone of a user, which helps it assess emergencies and prioritize those calls over others.
Personalization with CRMs
When you integrate your CRM systems with AI IVRs you effectively have virtual agents instead of the lacklustre IVRs. They can answer customer calls with the customer’s name. This intelligent IVR would also know customer preferences and the reasons for their call. So if a customer calls in to check their account balance on the first of every month; all consecutive calls on the first of the month can start with the AI offering the account balance and then moving on to other queries. Machine learning algorithms help predict user behavior and allow AI IVRs to help in a personal and context-specific way.
Continuous Learning
AI IVRs also learn from their interactions. This learning takes place both on the organization level and the customer level. The AI can collate data from calls and spot any trends in this data. This data is then used to improve accuracy and handle even more complex issues. Each interaction with the system makes it better, making it more efficient and responsive.
Omnichannel Continuity
AI IVRs with CRM access have a complete customer profile and every single interaction they’ve had with the brand. So when a customer calls in after already having a conversation on one channel, the AI knows who is calling and the specific issue that they need help with. For example, if a customer requests your customer care number on your website which uses a chatbot; you can then connect your AI IVR to this chatbot and share data. Outdated IVRs don’t support this. Only AI IVRs make this exchange possible, making omnichannel continuity possible.
To put it simply, an AI IVR system is like having a relationship manager for every single customer. The AI knows who is calling, the reason for their call, and their previous interactions with the brand across all platforms. It’s a level of personalization that only a dedicated agent can offer, but at a fraction of the cost. We will cover the cost and other business-level benefits of this technology in the next section.
Benefits of AI IVR for Businesses
Now let’s put this technology and features in the context of business processes, especially for contact centers that deal with customer calls and inquiries constantly.
- Improved Customer Satisfaction: We have already covered how older IVR systems led to customer frustration and lower satisfaction. With an AI IVR, you are looking at improved customer experience because of shorter wait times, smoother conversations, and a bunch of self-service options. This leads to higher CSATs (Customer Satisfaction Scores) making for quick query resolution and higher business output.
- Cost Efficiency: When you are using AI IVRs which can handle a large volume of calls, address customer issues, and resolve queries by themselves; you are reducing dependence on human agents. This is simply because many issues will get closed before they ever get to human agents. This means higher First Call Resolution rates for the calls that make it to an agent. This reduces staffing requirements across the board without compromising the quality of service delivered.
- Scalability: Scalability is another business-centric advantage of AI IVRs. These AI IVRs don’t require you to pre-record messages (although you can) for every single process that you enable them for. You can let these run off of the knowledge base and train themselves on the customer data for each process.
- Real-Time Analytics and Insights: AI-powered IVRs enable real-time analytics and insights for a particular process. This means that you can track call performance, customer interactions, needs, and agent productivity in real time. This enables better decision-making in the long run.
- Personalized Customer Interactions: We already covered how AI IVRs enable personalization. It allows us to anticipate customer queries and make customer journeys more convenient.
Having an AI IVR system that has a pre-determined knowledge base opens up several new business possibilities. Reduced operational costs and personalization are just the tip of the iceberg. With time this technology will only get better at serving customers, which will eliminate the need for large customer service teams in call centers.
Challenges and Considerations
AI IVRs are a no-brainer at this point. At their best, these IVRs work as effectively as a human agent. And at their worst, they open up personalization and customized self-serve options for the customer; even if the final resolution comes from an agent. That being said, there are some challenges to implementing an AI IVR within your contact center processes. Being aware of these challenges will help you make smarter decisions for your specific use cases:
- Initial Setup Time and Costs: AI IVRs have fixed software costs and variable training costs. When you set up such a system at your organization, you will need to factor in the time and money required to train your staff. Your staff must know the basics of this tool and how to work with it.
- System Integration: Integrating an AI IVR with your current tech stack is a big undertaking. If you intend to retain your current software, make sure that your AI IVR can seamlessly integrate with your tools. This requires complex internal planning and ardent support from your Voice AI partner.
- Customer Resistance: Customers may resist speaking with an AI IVR. While this is a genuine concern, the alternative is long wait times and clunky IVRs that need pre-recorded messages. AI IVRs are still a better solution. So with a combination of AI and human agents, you can rest assured that you provide a superior customer experience.
- Data Privacy and Security: Make sure that your AI IVR system complies with industry and geographical regulations. Data protection should be built into a tool like this. You need robust security protocols in a tool to ensure that customer information is safe at all times.
Here’s what you need to know when you are transitioning from a conventional IVR to an AI-powered one.
Implementing AI IVR
When implementing AI IVR, you need to have a strategic approach for a smooth transition. Here are the key considerations:
- Start Small: First automate simple, repetitive tasks that have little room for interpretation. This can include frequently asked questions like balance inquiries, account status, delivery updates, etc. This helps your team avoid the initial complexity of working with an AI-based system. Once you have more conversation data, see how you can expand the functionality to include complex interactions. There will always be some edge cases, thankfully with the available data, you can estimate workforce requirements to meet those.
- Integrate with Existing Systems: Start by integrating essential software components only. This includes your CRMs, ticketing, and other business systems (knowledge base, technical docs, training modules). This helps the AI to get a clear picture of customer interactions which will then be used to pull data during customer calls.
- Choose a Trusted Partner: Your Voice AI partner would be the biggest choice for a successful transition. Phonely offers seamless integrations with the best tools in the industry. For enterprise customers, we offer a “done for you” setup. This includes custom LLMs (Large Language Models), high-fidelity voice cloning, and built-for-you software integrations. A dedicated account manager ensures that you are set for success! Take it for a spin to get in touch to enquire about our enterprise-level solutions.
- Monitor and Optimize: Implementation and monitoring go hand in hand. When you are starting, closely watch the real-time analytics. Track performance and identify areas for improvement. Ensure that this system evolves with the processes that you enable AI IVRs for.
Conclusion
AI IVRs are the next innovation in customer service. With wait times and inefficient IVRs of the past being the biggest pain points in the customer journey; you can’t sleep on a natural, efficient, and personalized way of interacting with your customers. With features like NLP and intelligent routing, you can use AI IVRs to improve customer experience and reduce costs at the same time. An AI IVR is the smart and scalable choice to future-proof your contact center, today.
