Why are businesses still investing in IVR systems?

Why are businesses still investing in IVR systems?

If you follow customer service trends, you’ll notice that even though consumers consistently report low satisfaction with the technology, the market for IVR systems continues to grow.

47% of consumer respondents to a 2019 survey said they experience frustration when encountering call center IVR systems. 51% of those surveyed have even abandoned calls rather than navigate an IVR menu.

And yet, the Interactive Voice Response Market size was valued at USD 4.1 Billion in 2021 and is projected to reach USD 6.6 Billion by 2030, according to Verified market research

This begs the question: why are companies continuing to invest in a technology that aggravates their customers?

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IVR dissatisfaction is increasing because consumers expect better service

Despite what the reports of consumer frustration imply, IVR systems have improved since they were first conceived of in the 1960s.

It’s not that the technology has gotten worse. Rather, consumers expect a much better quality of service resembling the convenience of their own digital lives. 

A recent survey found that 87% of consumers expect an immediate response when contacting a company. 

90% of respondents to the same survey were “more likely to make a purchase from a business after a positive customer experience”.

90% of respondents to a recent survey were more likely to purchase from a business after a positive customer experience

There’s a growing body of evidence showing that, when making purchasing decisions, customers reward the brands that give them the best experience when they get in touch. 

A growing number of companies have taken note, and begun to shift towards a customer-centric approach to contact center processes.

The fact that this shift is still a work in progress is one reason for continued IVR dissatisfaction.

Not all companies have caught up to customer-centricity 

Customer centricity means putting the customer at the heart of your business. Customer-centric organizations consider how their decisions affect the customer, and kick-start new initiatives based on customer needs rather than business needs.

In the world of the contact center, an IVR system that is not customer centric would open an interaction by listing the parts of the business the caller can connect to. 

In this scenario customers have to sit through long menus with many irrelevant options, and may find that what they need isn’t listed at all. 

The fact that businesses still present customers with this kind of experience goes a long way to explaining why consumer dissatisfaction with this technology persists. 

It’s time for IVR systems to evolve…again?

The growth in the Interactive Voice Response systems market is partly due to a “growing number of operational BPOs and individual contact centers around the world”.

However, this isn’t just the ‘old school’ rolling out more and more menu-based IVR systems. 

There are new IVR systems coming online that take a different approach.

And this means that we have reached another ‘evolution moment’ for IVR in the contact center.

The history of IVR systems

The newest form of IVR uses a kind of conversational AI to bypass the need for a menu system altogether. The shift is underway from lengthy menu systems to something more convenient.

Major European energy company EnBW – which handles 150,000 calls per month – has now introduced conversational AI into 80% of its inbound customer interactions. 

The key to a better customer experience here is respecting the customer’s time, and making better use of the time they spend waiting for a human representative. 

Rather than reciting options and waiting for the customer to press ‘one, two or three’, the VoiceBot integrated with EnBW’s phone systems listens to what the customer says. 

That speech gets transcribed into text, and from there it can be used to update records and provide the agent with added context when caller reaches them.

20% of EnBW’s callers now authenticate their identities while they wait for a human agent. 55% tell the VoiceBot their reason for calling – a much better use of time than listening to a ‘your call is important to us’ recording.

5% of the energy company’s callers even have their query resolved in full by the VoiceBot, which can do things like update records and provide information without human intervention.

There is a good business reason for companies like EnBW to streamline their call center queueing and routing with automation – but there’s also a customer-centric reason as well.

The business reason is (predictably?) savings. 

Efficiency boosts add up after several thousand calls, and thanks to VoiceBot automation EnBW saves 800 hours per month and €500,000 annually.

The customer-centric reason is the technology’s potential to replace IVR systems, and eliminate frustration for 47% of customers.

Does ‘intent recognition’ spell the death of the IVR menu?

Well, realistically, probably not. IVR menus will likely stick around as fall-backs for when more advanced systems fail. IVR menus themselves will probably also become more dynamic, intelligently presenting a tailored list of options based on the caller’s customer profile.


Many customers who phone their favorite brands will follow a faster customer journey without having to listen to a single menu system.

This is the potential of contact center VoiceBot tech which – thanks to Natural Language Understanding capability – can figure out what the caller wants (their ‘intent’).

All the customer has to do is phone up and answer the question: “how can we help?”

VoiceBot call routing

Because the VoiceBot is integrated into contact center’s call flows, it can automatically route the caller to the human agent most suited to their needs.

It’s true that a VoiceBot IVR system will save on costs – but call center managers must balance operational savings with quality service.

The increased revenue (from retention and better LTV) that companies can gain from a customer-centric approach outweighs any optimization exercise.

Learn more about EnBW’s babelforce VoiceBot 

babelforce is a flexible contact center management and automation platform that puts CX design in the hands of CX professionals. We offer change in the contact center by giving you the tools to leave frustrating experiences behind and create something better.

We power exceptional customer experience in the contact center for leading brands, and EnBW is one of them.

Click here to read more about EnBW’s babelforce VoiceBot use case.

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