Interactive Voice Response (IVR) systems play a critical role in modern customer service systems. While the number of communication channels available to customers has expanded rapidly over the past decade, telephony has retained its position as channel-of-choice for a large segment of customers in both the public and private sectors. At the same time, telephony systems have continued to develop, incorporating new technologies and integrating many of the more advanced self-serve and automation solutions utilised in other channels. Conversational IVR is the next stage in the technology’s evolution and promises to ensure it remains a relevant and effective customer service tool. In this complete guide to conversational IVR, we explore how the technology evolved, how it benefits the modern contact centre, what the design process involves and what best practices you should incorporate into your IVR system. What Is Conversational IVR? Conversational IVR is the most recent and advanced iteration of the automated telephony systems utilised in contact centres for many decades. Instead of a “Press One for…” approach to menu design, customers can speak or type their queries in a conversational manner that more accurately replicates real human interactions. In doing so, conversational IVR becomes a more personal communication channel that customers feel comfortable using. https://www.inform-comms.com/wp-content/uploads/2023/08/What-Is-Conversational-IVR.jpg IVR systems have come a long way since the days of traditional menu-based designs equipped with relatively limited self-serve capabilities. While these systems enabled contact centres to provide self-serve information, such as opening times, FAQs, and guidance as well as help direct calls to the most appropriate teams and agents, they were not particularly dynamic and restricted customers to numerical inputs. Conversational IVR utilises advanced AI technologies, most notably speech recognition, Natural Language Processing (NLP) and Sentiment Analysis, to facilitate more detailed interactions between customers and the IVR system. It allows for a more user-friendly approach that enhances the customer experience and results in a more intuitive and accessible IVR solution. Benefits of Conversational IVR Conversational IVR benefits all stakeholders - customers, human agents and contact centres. While customers enjoy a superior user experience and more advanced self-serve capabilities, contact centres benefit from reduced costs and greater satisfaction. Let’s look at the core benefits in greater detail. Improved User Experience Conversational IVR prioritises a more intuitive and natural interaction. As a result, customers are less frustrated by the IVR experience and more likely to see the process through to its completion, increasing automation rates. Overall, this results in greater satisfaction with a customer service system.https://www.inform-comms.com/wp-content/uploads/2023/08/Benefits-of-Conversational-IVR.jpg Better Enquiry Resolution NLU enables the IVR system to understand complex enquiries and search for a suitable response. It leads to a higher automation success rate, fewer cases of customers zero-ing out and an easing of pressure on human agents within the contact centre. Even when the conversational IVR system cannot successfully automate an enquiry, it is better equipped to route a caller to the most suitable human agent. Cost Savings One of the principal benefits for contact centres is cost savings. While conversational IVR systems require an initial investment and incur some ongoing maintenance costs, they are considerably more cost-effective than human agents. However, these systems are not designed to replace human employees. Instead, they complement and augment agents by automating routine, high-volume enquiries and allowing employees to focus on more complex, nuanced and demanding tasks. System Scalability Automated systems like conversational IVR solutions can handle significant surges in caller demand, enabling contact centres to scale their response during peak periods. Whereas managers have historically had to either hire more agents or watch waiting times spiral during busy periods, automated systems can handle multiple simultaneous interactions and prevent surges affecting the quality of customer service provided. 24/7 Availability Unlike other channels, conversational IVR is available 24/7, 365 days a year. Consequently, customers can access services and information around the clock without worrying about traditional business hours. This is particularly valuable when customers cannot access services or customer contact channels due to personal circumstances or work commitments. Data Insights Traditional IVR systems collected comprehensive customer data. However, this data was limited by the fact that customers typically interacted via numerical inputs. By leveraging NLU capabilities and Large Language Models (LLMs), conversational IVR drastically increases the amount of data available for analysis. Rather than leveraging purely statistical data, organisations can now feed human speech and the written word into their analytics tools, opening up an entirely new type of data and ensuring they understand their customers better than ever. Designing a Conversational IVR System When designing a conversational IVR system, contact centres must follow a carefully considered process that maximises their chances of building a system that meets their needs. While some organisations may have the expertise required to construct a conversational IVR system in-house, the vast majority will not and are best off partnering with a customer service technology specialist, such as Inform. Even if the technical expertise is available in-house, the customer service experience required to design and develop a solution that works for your agents and customers may not be. Intelligent IVR design depends on a combination of technical and customer service technology expertise - something few organisations can draw upon. Below, we explore the design process, before considering several best practices that should help maximise system performance. https://www.inform-comms.com/wp-content/uploads/2023/08/Designing-a-Conversational-IVR-System.jpg Define Your Objectives Identifying key project objectives is the first step in any design process. Project managers should always ensure they ask “what do we want to achieve?” before they go any further. It influences everything you will go on to do and is fundamental to project success. Common goals include improving customer satisfaction, reducing call waiting times and increasing self-service rates. That said, you will probably want to target several of these objectives. Identify Use Cases Next, determine the use cases where conversational IVR will be most beneficial. What types of enquiries are you looking to target? To reduce waiting times, you probably want to target those high-volume enquiries that are most easily automated. If you are a larger organisation, certain teams or departments may benefit from a conversational IVR system more than others. Identifying appropriate use cases means the technology is applied most effectively and best demonstrates its potential. Map Out Your Conversational Flow Having identified use cases, it is time to map out the dialogue you expect to occur between customers and the system. This means defining likely user inputs, matching them to appropriate system responses and exploring potential conversation paths. You can base this on historical call data, records and transcripts. What do your historic call transcripts suggest most customers are likely to ask? How do they ask it? Implementing NLP and Speech Recognition Finally, select a reliable NLP and speech recognition platform to power your system and provide the AI capabilities required to process conversational communication. This can be a tricky process and your selection will be determined by what you want the solution to achieve and how capable it needs to be. Cloud platforms are the most popular solution as they are easily updated and allow you to scale the system with minimal fuss. learn more about Inform's Intelligent IVR Best Practices for Conversational IVR Design To build a successful conversational IVR system, keep the following best practices in mind: \tKeep it natural - as you are attempting to replicate human conversation, avoid overly formal or technical language. You want customers to feel like they are engaging with a person, not a machine. You can also try to equip your IVR with a tone and personality that reflects your brand. \tOffer escalation paths - customers should never be locked into an IVR system. Always offer them a way out and the opportunity to speak to a human agent should they need it. \tPersonalisation and context - customers value personalised experiences and conversational IVR enables you to provide them. Make the most of customer data to personalise interactions and maintain context throughout the conversation. While this can be as simple as using their name, it could also mean enabling customers to pick up where they left off with their last interaction or suggesting customer service actions they may want to take. https://www.inform-comms.com/wp-content/uploads/2023/08/Best-Practices-for-Conversational-IVR-Design.jpg \tClear prompts and options - clarity is critical and you must ensure all your prompts are understandable and exclusive. By exclusive, we mean a customer enquiry shouldn’t fall into two categories, as this can cause confusion. There should always be a clear path forward for the customer. \tTest and optimise - it is a good idea to think of your conversational IVR as an ongoing project that requires regular testing and optimisation. NLP models and conversational flows can adapt to real-world feedback and deliver improved results with more training. This is one of the reasons working with a conversational IVR specialist is an excellent idea - they will typically carry out maintenance and updates for you. Measuring Performance and Optimising IVR Once your conversational IVR system is in place, you must measure performance to optimise your system and ensure it delivers maximum ROI and the best customer service possible. You can do this by: \tAssessing Key Performance Indicators (KPIs) - KPIs such as self-service success rate, average handling time, user satisfaction scores and transfer rates all provide valuable insight into how the system is performing. Keep track of them and generate regular reports to ensure you see no drop-off in performance. \tUser feedback and surveys - you can also collect user feedback through IVR-delivered post-interaction surveys. This can be an effective way of identifying pain points and ironing out any minor flaws in the IVR solution. https://www.inform-comms.com/wp-content/uploads/2023/08/Measuring-Performance-and-Optimise-IVR.jpg \tRegular updates and enhancements - modern cloud technology ensures you can roll out regular updates and keep your IVR system functioning perfectly. Leverage your feedback, KPIs and natural language data to adapt to changing customer behaviour and new operational challenges. Looking to the Future When investing in new customer service solutions, it is important to look to the long-term future and how you expect the technology to evolve over the coming years. Organisations are understandably unwilling to invest in tools that do not guarantee a long-term return on investment, are not scalable or have no development plan. Fortunately, conversational IVR demonstrates significant development potential and is expected to incorporate new functionalities on a regular basis. On a basic level, the technology will become increasingly capable of handling complex or ambiguous customer queries. This will allow for more extensive automation, greater cost savings and a more prominent role for self-serve telephony. We also expect the technology to incorporate multilingual support, drastically reducing the costs associated with serving a diverse, multicultural customer base. Integrations with AI assistants, such as Siri and Alexa could further expand the technology’s reach and streamline the customer service process. Voice biometrics is another interesting avenue to explore and could be used to authenticate customers and facilitate personalised interactions. What next? Conversational IVR systems have the potential to revolutionise customer interactions, cut costs for contact centres and improve the customer experience. They represent a significant technological leap when compared to traditional IVR systems and bring advanced self-serve capabilities to a channel that was perceived by many experts as expensive and outdated. Advanced AI applications like NLP and Sentiment Analysis are having an enormous impact on customer service provision. Nowhere is this more apparent than in IVR. As a communication channel that trades in natural language, telephony is the perfect use case for these groundbreaking tools. As such, we can expect a significant number of contact centres to implement conversational IVR relatively quickly. The potential efficiency gains more than justify the initial investment and the scope for growth means that new features and functionalities will be rolled out regularly. https://www.inform-comms.com/wp-content/uploads/2023/08/Looking-to-the-Future.jpg Our expert team have been providing customer self-service solutions for over 30 years. 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