Today’s customers put a lot of value on a personalized experience. They want to know that the brands they buy from are ready to listen to their immediate needs and provide them with answers, quickly. One of the things that can help you make this kind of connection is hosted IVR.

IVR systems help your customers contact you during your business hours, ask for directions, book reservations, or pay a bill.

No matter what type of business you run, you should consider using an IVR solution to communicate with your customers. Today, we’ll go over what hosted IVR is, how it works, and why you should add it to your business.


What is Hosted IVR?

Hosted IVR (interactive voice response) is a telephony menu and routing system that providers interactive responses to callers. It helps businesses segregate and sort through the callers that contact their organization.

Through the menu system, the business can direct callers to the right department and the right person within the department as quickly as possible. That way, customers get the answer to their questions with fewer delays, enhancing their interaction with the organization. These systems often integrate with ACD, or automatic call distribution, which helps get callers to the information they need without the need for human input.

IVR platforms integrate easily with PBX phone systems. It can also be used with business VoIP systems. This makes it easy for brands to implement, regardless of their internal phone technology. Many IVR applications also offer varying degrees of custom IVR options, allowing each company to use the technology as it best suits their company.

This system often uses speech recognition to also allow the caller to interact more naturally with the computerized system. This all works together to reduce the inefficiencies within the system and gets customers the information they need with fewer struggles that come with trying to connect the caller with the right department. Without IVR, problems such as transferring people to the wrong department or mistakes in directing calls become more common, which can harm the impression of the business.


How Does Hosted IVR Work?

When callers contact the designated phone number of the business, they are given a menu that provides them with preselected choices of where they can find the information they need. For example, they may be directed to one option that will give them store hours and address while another selection will take them to the returns department.

These options are typically designed around the most common questions and concerns that the business receives. Some options may provide auto attendant responses, with customers never needing to interact directly with an employee. Others, however, will transfer the caller to the right agent who can answer their question.

Many IVR systems will also use voice recognition to understand the requests and questions that the caller uses, allowing the customers to interact with the computer in a more human-like manner. Other, more simple systems, will instead direct customers to input their answers to the prompted questions through punching numbers of the phone keypad.

Once the IVR system receives the request from the caller, they will reroute the users according to the information and calling trees that have been loaded into their system. Since the computerized system walks callers through these processes automatically, it helps to cut down on human error and ensure that all callers can easily access the information that they seek.

When it comes to answering the callers, businesses have the choice to use either text to speech options or prerecorded messages to communicate with their callers. Text to speech offer certain advantages, such as a better ability to respond to different unusual situations. Prerecorded messages, however, do not have running costs to manage. Each brand needs to evaluate with their service provider which option will work best for them.

With a computer-telephony integration system, the company will hook their phone system up to a computer through a telephony board and software, relying on databases of information that customers can access, such balances for particular accounts or scheduled movie times. Businesses can purchase all of the software and hardware needed to run the IVR in-house or they can use a hosting service that provides the necessary technical support and will help the business set up and use the IVR system. If problems arise, they will also provide help in finding the solution.


What are the Pros and Cons of this System?

IVR software offers a full range of benefits for businesses and their customers. Here are some of the advantages:



Brands can pre-record messages to play for callers when they first connect with the organization. This makes it easier to create a strong first impression, regardless of the time of day when the person calls.


Reduce Communication Errors

With a computerized system that automatically directs callers to the department or person that they need to address their concerns, errors are reduced. Optimized IVR call flow ensures that frustration is minimized.

Companies won’t worry about human error in manual call transfers. This helps to reduce the frustration experienced by the customers and creates a more positive impression.


Efficient Call Transfers

With the automation of transferring calls to the right agent or department, directing callers to the proper line also happens seamlessly and more quickly than it does when completed by human operators. Call priority queuing also allows you to get important callers to cut ahead. This reduces the wait time for customers and again enhances their experience and impression of the company.


Employee Productivity

With the IVR system, brands will not need to waste time using trained employees to answer routine calls that could be addressed with a recording. These computerized systems reduce the need for having paid employees to take care of questions such as business hours or addresses.

Ensure that customers receive immediate attention around the clock

IVR systems can run every day of the week and twenty-four hours a day. This means that customers can get answers to some basic questions, or get directed to the appropriate voice mailbox, regardless of the time they call.


Analyze Call Data

Hosted IVR systems also make it easy to gather data about your callers and better understand their experiences and interactions. You can see how the callers were transferred within the system and the number of calls that were answered or missed by the employees in each department. Call recording features also help employers better understand the customer care callers receive and even collect information about where customers are calling from.

Call recording data helps businesses build stronger marketing campaigns and improve the level of service that customers receive from the organization.



Although the benefits are clear for many business owners, that does not mean it is a foolproof system. There are potential drawbacks for businesses that those considering entering the system should be aware of.


Customers Prefer Live Agents

Some customers do not like the experience of feeling as though they must ‘talk to a machine’. Customers prefer using live chat vs chatbots. Brands will have to be able to balance these consumer needs with their desire for efficiency. One potential solution might be to offer a ‘select 0 to speak with an operator’ option for those who want to skip over the automated menu options.


Menus Are Confusing

There may also be some customers who have trouble successfully using automated menus and lists. For example, some customers may struggle to keep track of all the different menu options or determine what category their precise need fits into. Others may become increasingly frustrated if they find themselves engaging with multiple menus before they get to speak with a live representative. Often businesses who want to address this shortcoming will focus on creating short, efficient menu options as well as options for reaching an operator at any time.


Constant Upkeep

Companies also do need to make sure they take the necessary time to invest in the system. If they do not, then they could end up creating a system that has an unclear voice providing the menu options– which exacerbates the issues, poorly organized menus, or other inefficiencies that will cancel out any benefits the organization might have received. Taking the time to research effective IVR menu options, investing in a quality voice recording, and otherwise creating a high-quality IVR system can result in a tremendous difference in the customer experience.


Frustrated Customers

Brands also need to make sure that any potential buyers that contact their organization feel the personalized service that the brand is trying to create. If customers call, feeling ready to buy, but then get directed to endless menu phone trees, they may begin to feel ignored or not prioritized. The IVR system needs to take into account active buyers and be able to direct them to the best sales representatives so they can receive the personal attention they need to complete their purchase.


Does My Business Need Hosted IVR?

Determine whether your business needs to invest in an IVR by considering your response to these three questions.


Does your business need a better system to manage call flow?

If your company struggles to effectively and efficiently manage incoming calls, then an IVR might be needed. If your employees find themselves regularly wasting time answering mundane phone calls, when they could be completing tasks that would more directly impact the business’s revenue, then the self-service may be the solution. Similarly, if the employees find themselves inundated with regular calls and struggling to get the potential customers to the right department, then a computerized call tree may be just the investment the company should consider.


Do you need to improve efficiency for callers?

You also need to consider the experience for your callers and your level of customer engagement. If your callers often struggle to get the answers they need from your employees, then an IVR can help. If callers regularly get transferred multiple times between different departments and feel frustrated by their struggles to reach the people who can actively help them, then having a computerized system that will direct them exactly where they need to go can improve the level of customer care and create a better impression for your brand.


Do you want to enhance the professionalism of the business?

If you also want to take your business to the next level and increase your appearance of professionalism and the level of service you provide for customers, then an IVR system may be the cost-effective solution you need. With an IVR platform, even small companies can make their organizations appear bigger and more developed through multiple lines and mailboxes dedicated to providing customers with a high-quality experience. Rather than have a single employee try to answer all the questions that come in, IVR services make it simple for brands to direct callers to the best employee to answer their question automatically, without human error, giving a significantly more professional first impression.


Top IVR Solutions

For organizations considering the benefits, here are some industry-leading products to consider and how they line up with each other.



8x8 hosted ivr

The Virtual Contact Center by 8×8 focuses on providing services to small to medium size businesses. It supports popular IVE applications including voicemail, web callback, email, and webchat. This particular model focuses on transferring customers to agents based on the particular skill sets and knowledge that they offer, helping customers to receive the optimal experience.

It also has the ability for employees who answer the phone to provide their contact number to customers, helping them to resolve issues and help customers feel well-attended to.



ringcentral hosted ivr

RingCentral Engage Voice offers features such as automatic call distribution and blended communications between customers and call centers in addition to their IVR options. This program can be integrated with various third-party systems and includes features to help customers track and generate leads as well as perform market research.



five9 hosted ivr

The Five9 Cloud Contact Center software combines inbound, outbound, and blended support to help brands take advantage of cloud-supported call center technology. This option works to improve the customer experience by integrating across multiple platforms, including chat and mobile. It also uses AI to better understand customer needs and offers a range of tracking technology for its IVR systems. This data includes real-time metrics and the ability to track performance and sync data with the business CRM. Companies will find it significantly easier to understand how past interactions with customers have progressed.



talkdesk hosted ivr

The Talkdesk Enterprise Cloud Contact Center Software uses cloud-hosted and managed IVR to help employees provide more personalized connections. Customers can see the history of this particular customer while they talk, including their purchase information and their contact history, giving an additional boost to the conversation the employee has with the prospect.


Nice inContact

nice incontact hosted ivr

Nice inContact Call Center Software incorporates its IVR system with related technology to allow for inbound and outbound calls. It also integrates with voicemail and social media. This system can be used with CRM applications to make it easy to track customer interactions with the brand and enhance the customer service the company can provide.


Do Small Businesses Really Need It?

Consider the rate of calls your business receives and how well these calls meet your customers’ needs.

Consider also the efficiency of your employees. Think about whether or not your employees waste time answering basic questions and if an IVR system can help them use their time more effectively.

If your company struggles to answer phone calls effectively and efficiently, then investigating a hosted IVR solution may help.


How do I set up my system to maintain a positive user experience?

To create the best possible experience for your customers who call your number and connect with the IVR system, you will need to think about the sequence of events from the perspective of the caller.

Your callers do not want to listen to an extremely long list of menu options and then remember them. Instead, you want to limit your options to about 4-5 at a time. This helps everyone make the selection most applicable to them.

If you end up creating broad categories to meet this limitation, then you can connect certain menu selections to a second tree. This will further help customers reach the representative who has the skills and insight to help them the most.

Also, remember that some people might struggle to communicate with your IVR system. To make sure that all customers feel heard, include an option to reach a live agent directly. This can cut down considerably on the frustration that some customers may feel.


How do I avoid frustrating customers calling my business?

You want to make sure that the options you create reflect the experience that you want for your customers.

Remember to create an option for them that will let each caller reach an agent if they have troubles with your phone menu. Moreover, think about the needs of customers calling different departments.

For example, customers contacting the sales department want to feel prioritized because they’re about to make a purchase. You want to help these leads reach a live sales representative quickly. Customers thinking about making a purchase do not want to be passed through a computer system like an anonymous caller. Instead, they want to know that their needs and purchasing decisions matter to the company. On the other hand, someone interested in opening hours can just use the computerized system.

Molding the construction of your IVR tree can help you reflect on the diverse needs of your callers.


What are my options for setting up any type of IVR?

When it comes to setting up your IVR, there are a few different options you will need to consider.

You can buy the equipment yourself, including computer software, and set up an IVR in-house. However, you will have to maintain your own platform and troubleshoot any problems that may come up.

You can also use these solutions through a cloud service. If you go this route, you will pay a monthly subscription service to manage your IVR calls for you. They will handle the software installation and maintenance in return for a fee. That way, the company managing the IVR will take care of the system and any problems that may happen.

The use of cloud IVR has been on the rise recently. Cloud IVR uses the power of the cloud to improve the capabilities of IVR. This can help reduce the need for updates and other complex features of other IVR models. It can also improve the technological capabilities of the IVR program used, making sure you have the top system in your industry.

When it comes to providing superior customer service, brands need to think past the point of sale. They need to think beyond the interactions during an actual purchase or when a customer is on their premises. Customer service extends from the first contact a customer makes with a potential brand to the last. Therefore, the calls that your customers make to you should be considered an important business interaction as well.


IVR Personalizes Customers Service

IVR offers personalized experiences for customers throughout their call, connecting them quickly to the representatives that can handle their questions or concerns.

If you want to help your business grow, you should consider the potential benefits of using IVR. This technology along with auto-attendants are just two of the many pieces of any enterprise VoIP system that you need as an organization that wants to excel at customer service.