IVR vs. IVA: Is There a Difference and Does It Matter?

IVR and IVA are both technologies that allow customers to interact with a company without having to speak to a live agent. They have two purposes. First, they make customer service sustainable as a company grows. Second, they make it easy for customers to solve their own problems.

Unfortunately, they haven't always been successful in that second point. IVR in particular has garnered a reputation for frustrating customers. That failure is caused by some key differences between the two technologies.

Difference between IVR and IVA

IVR stands for interactive voice response. It is a technology that uses pre-recorded audio prompts to guide customers through a series of tasks. For example, an IVR system might ask a customer to press 1 for customer service, press 2 for sales, or press 3 to hear account information.

IVA stands for intelligent virtual agent. Some call it "intelligent virtual assistant." It is a more advanced technology that uses artificial intelligence (AI) to understand and respond to customer queries. IVAs can be used to provide self-service support for a wide range of customer needs, from account information to troubleshooting.

 

In general, IVR allows businesses that need to provide basic self-service support. It can be a low-cost option, but IVRs with many recorded responses may be quite expensive. IVA is a better option for businesses that need to provide a more personalized and intelligent experience, or that have a high volume of customer calls.

How are These Differences Important?

The differences between IVR and IVA matter because they affect the customer experience and the ROI of the technology. As AI technology continues to develop, IVA is expected to become more affordable and accessible to businesses of all sizes. This will make it a more viable option for businesses that are looking to improve their customer service and business performance.

If the business needs to provide basic self-service support at a low cost, IVR may do the job. However, if the business needs to provide a more personalized and intelligent experience, or that has a high volume of customer calls, IVA may be a better choice. Because personalization matters to customers more than ever, IVA is quickly replacing IVR as the industry standard.

Here are some additional reasons why the differences between IVR and IVA matter:

Customer Experience

IVR systems typically provide a more limited and generic experience than IVA systems. This can lead to customer frustration, especially if the customer has a complex question or issue. IVA systems, on the other hand, can provide a more personalized and conversational experience, which can lead to higher customer satisfaction.

Return on Investment (ROI)

IVR and IVA systems cost about the same. However, IVA systems can also lead to improved customer satisfaction, reduced call volume, and increased sales. One in three consumers will leave a brand after one bad experience. On the other hand, improving customer experience may increase sales revenue by 2 to 7 percent.

Employee Productivity

IVA systems can free up employees to focus on more complex tasks, such as customer support and sales. This can lead to increased employee productivity and satisfaction. IVRs on the other hand can sometimes free up employees, but more often than not they lead to poor experiences and frustrated customers that are redirected to agents. As a result, conversations become more heated and complicated, making it harder for your teams to be productive and potentially affecting your brand perception. 

Business Agility

IVA systems can be quickly and easily updated to reflect changes in products, services, or policies. This makes it easier for businesses to adapt to changing market conditions. IVRs on the other hand require a lot more effort as they depend directly on the decision trees previously programmed into the system. In the case of IVRs, sometimes updates can be quick, but they can also become a process that is time consuming.

Data Insights

IVA systems can collect data on customer interactions, which can be used to improve the customer experience and the overall business performance. IVRs also collect data and can integrate with other systems but they tend to be a bit more limited in terms of analysis and depth. 

Use Cases of IVR/IVA Contact Center

Here are some examples of how IVR and IVA are used in contact centers for different industries:

• Banking: Allow customers to check their account balances, transfer money, and pay bills.
• Retail: Answer customer questions about products and services, and to process returns.
• Healthcare: Schedule appointments, refill prescriptions, and provide patient information.
• Travel: Book flights, make hotel reservations, and rent cars.

As AI technology continues to develop, IVA is becoming a more popular choice for businesses of all sizes. IVAs offer a number of advantages over IVR systems, including:

• They can understand and respond to a wider range of customer queries.
• They can be customized to provide a more personalized experience to each customer.
• They can learn and improve over time.

As a result, more businesses are expected to use IVAs to manage their customer service needs in the future.

What is IVR?

An IVR technology is a buffer between your customer representative and the end user. Before IVRs, agents had to pick up every call to learn the customer's problem and redirect them to the correct department to solve it. An IVR system usually has a predetermined menu with multiple options that guide callers to choose the right options based on the reason behind their call.  

How does IVR work?

IVR systems typically use a menu system to guide customers through their desired task.

Here is a step-by-step overview of how IVR works:

1. The customer calls the company's phone number.
2. The IVR system greets the customer and asks them to press a number to select a menu option.
3. The customer presses a number to select their desired option.
4. The IVR system responds to the customer's selection. This may involve playing a pre-recorded message, transferring the customer to a live agent, or accessing a database to provide information.
5. The customer continues to interact with the IVR system until they have completed their desired task.

IVR systems can be used to provide a variety of self-service features, such as:

• Checking account balances
• Making payments
• Scheduling appointments
• Answering frequently asked questions
• Providing technical support

IVR systems can also be used to collect customer information, such as names, addresses, and phone numbers. This information can be used to improve the customer experience and to target marketing campaigns.

IVR systems use a combination of hardware and software to work. The hardware typically includes a computer, a telephony card, and a speakerphone. The software includes the IVR system's operating system, the menu system, and the voice recognition engine.

The IVR system's operating system controls the flow of information between the hardware and the software. The menu system provides the customer with a list of options to choose from. The voice recognition engine converts the customer's spoken words into text.

When the customer presses a number on their phone, the IVR system sends a signal to the computer. The computer then interprets the signal and determines which menu option the customer has selected. The computer then sends a signal to the speakerphone, which plays the corresponding audio message.

If the customer needs to speak to a live agent, the IVR system can transfer them to the appropriate department. The IVR system can also collect customer information, such as names, addresses, and phone numbers. This information can be used to improve the customer experience and to target marketing campaigns.

Modern systems today can also understand basic verbal inputs, such as "yes," or "representative." Because customers choose what to say to the IVR, these are called "natural language IVR."

Brief History

The history of IVR can be traced back to the 1930s, when Bell Labs created the Voder, a machine that could analyze the English language and produce human-like audio. This technology was the first to use computers to synthesize speech, and it paved the way for the development of IVR systems.

In the 1960s, the Bell System built a dual-tone multifrequency (DTMF) technology, enabling the development of phones with keypads. This made it possible for customers to interact with IVR systems by pressing buttons on their phone.

The first commercial IVR systems were introduced in the 1970s. By the 1980s, IVR systems became more sophisticated. They began to use voice recognition technology to understand customer requests, and they could access databases to provide information, becoming more user-friendly.

In the 1990s, IVR systems became even more popular. They were used by businesses of all sizes to provide customer service, collect information, and automate tasks. 

In the 2000s, IVR systems continued to evolve. They began to understand customer requests more accurately and provide more personalized service. Today, IVR systems are an essential part of customer service for many businesses, but they never won the hearts of customers. With the advent of AI, their popularity has begun to fade.

Benefits

Historically, IVR delivered many benefits to businesses, including:

• Quick service: In cases when an IVR can resolve an issue on its own, it provides an efficient and convenient way to interact with a company. Customers can get the information they need without having to wait on hold or speak to a live agent.
• Reduced call volume: IVR systems help reduce call volume by automating common requests. This frees up live agents to handle more complex customer issues.
• Increased employee productivity: Live agents become more productive when they are free to focus on more complex inquiries. This can lead to improved employee morale and satisfaction.
• Lower costs: By automating tasks such as scheduling appointments, taking payments, and providing customer support, employees spend less time on the phone, reducing contact center expenses.
• Data collection: IVR systems can collect data on customer interactions, such as the time of day the call was made, the customer's location, and the customer's reason for calling. This data can be used to improve the customer experience and the overall business performance.
• Scalability: IVR systems are scalable, which means they can be easily adapted to meet the needs of a growing business. This is important for businesses that experience seasonal fluctuations in customer demand.
• Flexibility: IVR systems can be customized to meet the specific needs of a business. This allows businesses to create a customer experience that is both efficient and effective.

Overall, businesses of all sizes have gained value from IVR. It is a versatile and powerful technology that can be used to automate customer service, reduce costs, and increase efficiency. Until recently, IVR was the only option to make customer service sustainable for many companies.

Limitations

While IVR delivered many benefits, it also sports some limitations. Here are some of the most common limitations of IVR:

• Limited ability to handle complex requests: IVR systems are typically limited to handling simple requests. If a customer has a complex request, they may need to speak to a live agent.
• Can be frustrating for customers: If a customer is having trouble navigating the IVR system or if the system does not understand their request, they may become frustrated. This can lead to negative customer experiences.
• Not always accurate: IVR systems are not always accurate, especially when it comes to understanding customer requests that are not in the system's database. This can lead to errors and frustration for customers.
• Not personalized: IVR systems are not personalized, which can make the customer experience feel impersonal. This can lead to customers feeling like they are not being heard or understood.
• Can be expensive: IVR systems can be expensive to implement and maintain, especially for businesses with a large call volume.

Despite these limitations, IVR has still provided value for businesses of all sizes. While it's impossible to completely avoid these limitations, there are ways to reduce their impact. Here are some tips for overcoming the limitations of IVR:

• Make sure the IVR system is easy to use: The IVR system should be easy to navigate and should have clear instructions.
• Train customers on how to use the IVR system: Provide customers with instructions on how to use the IVR system before they call.
• Monitor the IVR system: Monitor the IVR to identify any problems and make improvements.
• Use a hybrid approach: Combine IVR with live agents. This allows customers to get the help they need, even if the IVR system is not able to understand their request.

By following these tips, you can overcome the limitations of IVR and improve the customer experience.

What is IVA?

Intelligent virtual agents (IVAs) are similar to IVRs because they redirect users to the correct department and reps and reduce human agents' workloads. However, they are a far superior option, given that they incorporate natural language processing, artificial intelligence, and generative AI capabilities to improve customer service and solve problems better and faster.

How does IVA work?

Intelligent virtual agents (IVAs) are computer programs that can simulate human conversation. They use artificial intelligence (AI) to understand and respond to natural language queries. IVAs are used in a variety of applications, including customer service, education, healthcare, and entertainment.

Here is a step-by-step overview of how an IVA works:

• The user interacts with the IVA using their voice or text.
• The IVA's AI engine analyzes the user's query and identifies the intent.
• The IVA retrieves the relevant information from its database.
• The IVA generates a response in natural language.
• The IVA delivers the response to the user.

IVAs can be used to perform a variety of tasks, such as:

• Answering questions
• Providing customer service
• Booking appointments
• Making reservations
• Troubleshooting problems
• Providing recommendations
• Generating creative content

As people became comfortable with virtual assistants in their homes and pockets, businesses became comfortable with virtual agents handling customer service inquiries. Today, IVAs outperform traditional tools like IVR, and they even boast a few advantages over human-based customer service.

IVAs have the potential to revolutionize the way we interact with technology and the way we get things done. Here are some additional details about how IVAs work:

• IVAs use a variety of AI techniques to understand and respond to natural language queries, including natural language processing (NLP), machine learning (ML), and deep learning (DL).
• NLP is used to identify the meaning of the user's query. ML is used to learn from the user's interactions with the IVA and to improve the IVA's ability to understand and respond to queries. DL is used to create IVAs that are able to understand and respond to complex queries in a natural and human-like way.
• IVAs typically store their data in a database. This data can include information about the user's past interactions with the IVA, as well as information about the products or services that the IVA is providing support for.
• IVAs can be accessed through a variety of channels, including voice, text, and chat. They can also be integrated with other systems, such as customer relationship management (CRM) systems and enterprise resource planning (ERP) systems.

Brief History

Intelligent virtual agents (IVAs) are the next generation of customer service automation. More than an AI IVR, the history of IVAs can be traced back to the early 1960s, when researchers began to develop computer programs that could simulate human conversation. One of the earliest IVAs was ELIZA, which was developed by Joseph Weizenbaum at MIT in 1966. ELIZA was a rule-based system that could simulate a Rogerian psychotherapist.

In the 1970s, IVAs began to use artificial intelligence (AI) to improve their ability to understand and respond to human language. One of the most influential IVAs of this era was Parry, which was developed by Kenneth Colby at Stanford University in 1972. Parry was a chatbot that simulated a paranoid schizophrenic.

In the 1980s, IVAs began to be used in commercial applications. One of the first IVAs to be used in a commercial setting was the Virtual Customer Assistant (VCA) developed by IBM in 1984. The VCA was used to provide customer service for IBM products and services.

In the 1990s, IVAs became more sophisticated and began to be used in a wider range of applications. One of the most popular IVAs of this era was the Ask Jeeves Virtual Assistant, which was launched in 1997. In the 2000s, IVAs continued to evolve and began to use natural language processing (NLP) to improve their ability to understand and respond to human language. 

Today, IVAs are used in a wide range of applications, including customer service, education, healthcare, and entertainment. IVAs are becoming increasingly popular as AI technology continues to develop. They offer a number of advantages over traditional customer service tools, such as 24/7 availability, the ability to handle a wider range of tasks, and the ability to learn and improve over time.

Benefits of an IVA Call Center