How Artificial Intelligence is Beneficial in IVR Systems

Aksheeta Tyagi

February 12, 20248 min read

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I know you felt this in your bones. Getting stuck yelling "representative" at a robotic phone menu. Traditional IVR can be a real headache, often leading us in circles. Today, these systems have come a long way to actually understand what you're saying — all with, you guessed it, AI.  

AI in IVR upgrades the conventional system from a rigid set of options to a smart conversation partner, adept at getting to the heart of your customer’s problem. With AI, IVR becomes more like talking to a helpful human, making their interactions with customer service quicker, clearer and surprisingly more fulfilling. Here’s all you need to know about using AI in IVR for your customer service. 

Table of Contents

What is AI-based IVR?

AI in IVR is the integration of Artificial Intelligence with Interactive Voice Response systems, enhancing them with capabilities like natural language processing (NLP) and advanced voice analytics to understand, interpret and respond to callers in a more human, nuanced and efficient way. Such AI-powered IVR also uses machine learning to get a bit sharper, making each conversation smoother than the last. Infusing AI can help you reap a mountain of IVR benefits that the conventional system couldn’t bring. Actually, AI-based IVR bypasses what the standard IVR leans on — rigid technology, scripted responses and an inability to grasp the true intent behind a customer's inquiry. 

AI IVR vs. Traditional IVR

Let’s take a look at a few stark differences between traditional IVR and conversational IVR: 


Conventional IVR 

AI-Based IVR 

Interaction Type 

Menu-driven, requires specific input (e.g., press 1, 2, 3) 

Conversational, understands natural language 

Response Flexibility 

Limited, based on predefined options 

Dynamic, adapts to varied queries 

Learning Capability 

Static, does not learn from interactions 

Evolves with interactions using Machine Learning 

User Experience 

Often rigid and frustrating 

More intuitive and user-friendly 

Call Routing 

Based on button inputs 

Intelligent routing based on spoken queries 

Handling Complexity 

Limited to simple queries 

Capable of handling complex, varied queries 


Generic responses 

Tailored responses based on user history and context 

Speech Recognition 

Basic, often limited to simple keyword-driven commands 

Advanced, understands diverse accents and dialects 

5 Benefits of artificial intelligence in IVR systems

Over 8 in 10 Americans expect you to provide self-service options because people simply wouldn’t want to speak to someone for something that they can fix themselves. While conventional IVR has been in the game for a bit now, AI self-service is changing how we see IVR today. Here are some benefits of using AI-powered IVR. 

1. High contextualization

AI in IVR utilizes deep integrations with your internal systems like your contact center CRM, marketing automation and ticketing tool, allowing it to paint an accurate picture of the customer before the conversation begins. It can swiftly collect all relevant data points of the case and render highly personalized, context-rich responses, making each interaction tailor-made for the customer.  

Let’s get novel: Did you know how generative AI is changing the conversational IVR scene? Take Sprinklr Conversational AI, for instance — powered by genAI, it can be set up and trained fairly quickly to handle a wide range of scenarios.  

Picture this: Poppy calls in, frustrated about her poor phone reception. The Generative AI-enriched IVR, which is trained to handle network issues, immediately gets to work. It conveys to her of no recent power outage in her specific locality, and she understands how restarting her router didn’t work. The IVR then suggests a remote reset, adapting to her situation. It's a smooth, human-like exchange, far from the rigid script of old IVRs. 

Read: Impact of Conversational AI in Telecom 

2. Intelligent, incisive routing

While traditional IVR is adept at routing the call to just about any available agent, AI-based IVR knows just who to route to. It dissects the caller's language, sentiment and intent, matching them with the expert who has all the case history at their fingertips. Such precision reduces ticket transfers, optimizes the customer journey and boosts resolution rates.  

Read More: Best Practices of First Call Resolution 

Imagine someone calling their bank in a panic because their account was hacked and another just wanting to upgrade their plan. AI in IVR can instantly spot the difference. It ensures the first caller gets urgent fraud help while the second gets a service upgrade expert. While routing, the AI also ensures the agent has a complete context of the situation — so in the case of account fraud, the agent can then use guided workflows designed as a plan of action for such an issue. 

What’s more? Generative AI is also working in the background, creating a case summary for quick glance and learning. This smart sorting saves everyone time and stress, making sure everyone gets exactly the help they need.  

3. Unbroken conversation continuity

AI-enabled IVR systems can remember previous interactions with callers — and do so across channels. This continuity means customers don’t have to repeat information when the call drops and they need to call back — making subsequent interactions less frustrating.  

Think of a user mid-way through changing their bank address when poof — disconnected. Ringing back, the AI greets them with a "Hi, would you like to resume your last conversation?" This relaxed, seamless pick-up wouldn’t just charm your user but also zip things along — ensuring there aren’t any more lags to a resolution. 

AI IVR ensures call continuity

4. Managed workforce

AI-based IVR can also arm customer service leaders like you with sharp call analytics, guiding them to allocate staff more strategically and in tune with real-time demand. This move ensures peak efficiency in call center agent utilization, perfectly aligning resources to match the ebb and flow of customer queries. 

5. Continuous learning and evolution

AI-based IVR is always a self-guided discovery. It’s a self-taught child, naturally growing smarter with each customer interaction. AI IVR absorbs details from every call, fine-tuning its ability to understand the many patterns and queries. Such ongoing learning enables it to respond to customer needs more precisely, providing resolutions that are keyed to the moment each time. And like that, the system not only becomes better but also shapes itself into a more intuitive and responsive customer service channel

6. Sustained engagement

AI can help to keep your customers gripped in a conversation beyond answering their direct questions. When trained with generative AI, IVR can understand the intent driver of a question — beyond the face value. It can keep the conversation flowing with relevant information and even direct users to other channels for more sustained, focused engagement. 

Let's say Sal is looking for oakwood furniture during an annual sale but finds out it's out of stock.  

Here's where Gen AI's IVR shines.  

Instead of just informing him about the unavailability, it intuitively suggests mahogany, a great alternative to oak. Then, it offers to shift the chat to WhatsApp. Why? To provide him with a personalized showcase of mahogany options tailored to his taste and budget. AI makes the call all the worth more time for the user, leading them on a thoughtful exploration of their likes, leading a simple query into a happy, tailored conversion. 

In addition to its primary advantages, AI in IVR brings a welcome relief in managing costs and improving customer experience as a whole. AI is also very useful in ensuring complete data privacy, unfaltering security and strong compliance all throughout the IVR call — we will talk more about this next. Just as it did with Sal above, AI IVR also allows customers to seamlessly switch from one channel to another without loss of context, ensuring they have a true omnichannel customer experience

Applications of AI in IVR for businesses

To get the best out of it, here are a few ways you can use AI-powered IVR for your business to ensure streamlined customer interactions. 

Orchestrate journeys: AI in IVR uses customer interaction analytics to narrow down the most and least popular use cases and intent drivers for which user journeys can be optimized and orchestrated across demographics and locations.
Know more: 4 Ways to Map your Customer Journeys 

Ensure compliance: AI-powered IVR can serve as your watchdog to flag anything that needs to be. It continuously monitors conversations for adherence to industry or federal regulations, uses speech recognition to flag potential non-compliant language, including obscenity, bias, prejudice, abuse, sexual undertone, etc and provides real-time guidance to agents — all to make sure no interaction slips up on legal and ethical standards.
Take a note:
Complete Checklist of Contact Center Compliance 

Lead outbound campaigns: Another wonder of AI in IVR is that the customer data can help with solid segmentation of consumers — paving the way for you to devise and launch targeted campaigns with AI IVR.
Know more: What is Outbound IVR? 

Customers have no patience for slow, cookie-cutter service in 2024. They expect rapid, personalized responses — a stark shift from the outdated IVR dockets. 

That’s why you have Sprinklr!  

Sprinklr Conversational IVR can help you solve 70% of your calls autonomously — and winningly. Deploy intelligent Gen AI voice bots that empower your customers with intuitive self-service and agents with intelligent routing. Here’s a trial on the house.

Try Top-Notch Service Today

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