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IVR (Interactive Voice Response) functionality is probably the most well known of all call centre technologies. Everyone I know is familiar with the idea of "Please press 1 for Sales, 2 for Service..." and whilst there are many examples of over use, when they are used correctly they are an invaluable tool to help callers get through to the right person to deal with their enquiry.

A well structured IVR menu can improve customer satisfaction, increase customer retention and even increase sales.

This post, and the related ones to follow in coming weeks, isn't going to be about whether callers like or hate IVRs - that all depends on how well structured the IVR is and how quickly the caller gets to speak to someone who can help. Initially I want to focus on how IVRs can save you money.

The first reason is that the IVR menu can be designed to route callers through to the most appropriate agent to deal with the call; "skills-based routing". Simply putting a caller through to the first available agent may mean that agent can't deal with the call; which then has to be put on hold while a another agent who can help is found. This may lead to a lengthy period on hold and risks the caller getting frustrated and having an impression of inefficiency.

The skill levels of agents in a call centre will depend largely on their previous experience, a combination of years in the job, product knowledge and training. Agents new to call centre work can be trained in simple initial skills to deal with low level enquiries and as they develop their career, the training and experience they gain lead to better salaries.

So using IVR menus to route simpler enquiries to less experienced agents, with training or knowledge to answer the enquiry, delivers a reduction in training costs and average agent pay costs.

When designing an IVR Menu system you should firstly minimise the IVR menus and options offered to individual callers by using customer specific menus to limit the number of options they hear when phoning in.

Maybe the top 10% of your customers bring 40% of your revenues and deserve to get straight though to the front of a multi-skilled agent queue, without any IVR menu being encountered? This can be achieved by recognising the customer’s Calling Line ID, routing appropriately and giving them a high queue priority. A good second best is to recognise their account number when entered into the IVR, and immediately drop them out of the menu tree to appropriate agents.

The remaining 90% of existing customers are likely to be best served by a custom IVR designed to meet their needs, based on what your CRM system knows about the customer, in terms of their profile and in terms of what products they have purchased from you (and therefore what they might want to talk about).

Of course, its not just call centres that can benefit from IVRs - any business that takes calls can use the IVR to make sure the caller gets through to the right person, first time.

The next post in this series will look at how using self-service via IVR can save you more money.

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About Richard Pickering

Richard co-founded NewVoiceMedia with Ashley in 2000. Previously to that he was part of the Genesys Labs start-up that was sold to Alcatel for $1.5bn. Richard has over 30 years exprience working in call centre technology markets, including 24 years at BT where he designed many of thier internal call centres. Richard has considerable experience applying call centre technology to solve business problems and plans to share his thoughts on these and other issues through his blog.

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