Whether you’re selling deep-sea fishing equipment or vegan dog treats, managing customer calls is critical for any growing business. Interactive voice response (IVR) technology offers a solution that streamlines contact center operations and improves the customer experience without dramatically increasing operational costs.
In the increasingly AI-driven ecommerce landscape, next-generation IVR systems can increase customer satisfaction by up to five times and reduce the need for human agent interactions by 10%, according to the consulting firm McKinsey. For small ecommerce businesses, an investment in IVR can be worth the price.
Here’s what IVR is, how it works for ecommerce, and which tools to consider.
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What is IVR?
Interactive voice response is an automated phone system that enables callers to interact with your business through voice commands or touch-tone keypad selection. Acting like a digital receptionist, IVR greets customers with prerecorded messages and presents menu options to direct their calls to the appropriate representative or automated service.
IVR systems use dual-tone multifrequency technology (DTMF) to interpret caller input through the telephone keypad. More advanced IVR solutions incorporate speech recognition and natural language processing (NLP), allowing customers to speak their requests.
For ecommerce businesses, IVR often serves as the first point of contact for customer calls, offering a way to handle simple requests, such as checking an order status, without tying up live agents.
How does IVR work?
An interactive voice response system operates through a structured call flow that guides customers through their service journey. When customers dial your support number, the software analyzes user input from either the phone keypad or voice commands and matches it to programmed options. Based on valid responses, the system may:
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Provide automated information, such as store hours and shipping updates
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Collect caller data to pass to an agent
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Route calls to the most appropriate agent or department
More advanced IVR solutions use voice recognition technology to understand user requests in their preferred language or identify callers using voice biometrics. IVR technology typically integrates with contact center software and customer relationship management (CRM) systems, giving agents access to caller information and interaction history when calls are transferred. By handling routine inquiries automatically and passing along context for more complex customer requests, IVR reduces wait times and ensures customers reach the correct department faster.
Who uses IVR?
Various industries leverage IVR technology to improve customer interactions and streamline business operations:
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Banks and financial institutions. The financial services industry uses interactive voice response systems for transferring funds, providing balance information, and directing calls.
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Health care organizations. Doctors and medical clinics use IVR for appointment scheduling and prescription refills.
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Subscription-based businesses. Subscription-based businesses, such as cable TV or internet service, leverage IVR for account management, billing questions, and service modifications.
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Call centers. Whether for fundraising, public safety information, or tech support, call centers leverage IVR to reduce the load on human agents.
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International or multilingual businesses. Businesses that serve multilingual customers support their diverse customer bases by offering menu options in customers’ preferred languages.
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Online retailers. Ecommerce businesses use the technology to handle order status inquiries, process returns and exchanges, and provide shipping information.
For Shopify merchants and ecommerce businesses, IVR systems are particularly valuable. Contact centers serving ecommerce businesses use IVR solutions to manage seasonal spikes in call volumes, ensuring prompt and consistent customer service during peak shopping periods like Black Friday or holiday seasons.
Benefits of IVR
Interactive voice response systems are beneficial for growing businesses—especially small companies looking to improve their customer experience and streamline workflows. Here are some of the key benefits:
High-volume call management
IVR systems excel at managing high call volumes. The automated phone system can handle multiple calls simultaneously, ensuring no customer receives a busy signal during peak periods. Automatic call distribution can route calls based on the caller’s needs and agent availability, ensuring customers reach the appropriate representative for their specific issue. IVR can be especially valuable during holidays and seasonal spikes since it can scale on demand.
Automated service
IVR systems automate the handling of basic inquiries and services, such as account information access, order tracking, and simple transaction completion, so customers can get answers outside business hours without waiting for a human agent. This significantly reduces the demands on human agents, freeing them for more complex requests.
Improved customer service
IVR improves customer service beyond just 24/7 availability. Instead of customers explaining their problems multiple times to different representatives, the IVR system gathers preliminary information and directs them to agents best equipped to help.
Cost efficiency
IVR technology delivers significant operational cost savings by reducing the need for additional customer service representatives. The automated service handles routine tasks that would otherwise require human intervention, letting businesses serve more customers with fewer staff members.
Challenges of IVR
Although IVR can improve customer service, it isn’t without pitfalls. Here are some of the most pressing issues:
Impersonal communication
One big drawback of IVR systems is the impersonal nature of automated interactions. Customers seeking immediate human help may find navigating through multiple menu options aggravating, especially when dealing with complex or emotionally charged issues. Some callers may become frustrated as soon as they encounter automation. A recent survey by Ipsos revealed that 88% of people prefer to speak with a human when faced with customer service issues.
Complex navigation
Poorly designed IVR menus can create barriers between customers and the support they need, potentially leading to customer frustration and abandoned calls. A common gripe with IVRs is confusing menus that don’t offer the option the customer is looking for—and no clear path to speaking with a human agent. (It’s worth noting that Gartner found that 64% of consumers would prefer that companies not use automation or AI for customer support.)
Imperfect technology
Systems that don’t recognize natural speech patterns or have limited voice command capabilities can force customers into rigid interaction patterns that feel time-consuming and unresponsive to callers’ concerns. Integration issues with other software can also lead to agents receiving incomplete information.
What to look for in an IVR system
When selecting IVR software for your business, you should expect certain standard features across most platforms, including:
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Core call handling. Call routing, customizable menu options, call queuing, and seamless transfers to live agents.
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Customer-friendly tools. Automated greetings, multilingual support, caller ID display, and touch-tone and voice recognition.
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Business integrations. CRM connectivity, call recording, and basic analytics reporting.
These foundational features ensure your system can handle routing customer interactions and integrate with your existing business operations. Beyond these standard capabilities, evaluate systems based on ease of customization, scalability options, advanced analytics, and specific integrations with existing systems.
Best IVR system providers
The best IVR system is the one most aligned with your company’s needs. Here are some of the top choices:
1. RingCentral
RingCentral is a flexible platform that can accommodate remote or blended teams. It combines IVR (supported by AI conversation intelligence) with video conferencing and team messaging in its base plans. Integration with tools like Salesforce and Google Workspace, in tandem with RingCentral’s mobile apps, allows complete system management from smartphones. Advanced features like an AI receptionist and AI call insights are available as add-ons for additional fees.
Pricing: RingCentral offers custom pricing; contact sales for details.
2. Aircall
Aircall’s straightforward interface appeals to small ecommerce businesses. Its base plan includes features like click-to-call from your browser, call logging to CRMs, and integrations with WhatsApp. AI voice agents are available as an add-on feature.
Pricing: Plans start at $30 per user monthly (billed annually); advanced analytics, call sentiment analysis, and workforce management features are unlocked at the $50 per user per month Professional plan.
3. Nextiva
Nextiva differentiates itself with built-in CRM functionality and gamified call analytics, which are included in its standard plans. Nextiva’s NextOS platform provides conversation intelligence that can score calls and identify coaching opportunities for customer service agents, plus integrated surveys for immediate customer feedback collection.
Pricing: Plans start at $15 per user per month (billed annually), with features like advanced reporting and AI-powered insights available as add-ons.
4. 8x8
8x8 offers global connectivity with built-in international calling to more than 40 countries included in its base plans, targeting businesses with an overseas customer base. The platform combines contact center, business phone, and video meetings in a single solution, with quality-of-service monitoring and global redundancy. AI-powered analytics and advanced workforce optimization (including staffing forecasting, workload trackers, and skills management tools) are available as premium features.
Pricing: 8x8 offers custom pricing; contact sales for details.
5. Vonage
Vonage’s application programming interface (API) architecture allows extensive customization and integration options for small businesses. Its platform includes built-in conversation analytics and the ability to create custom workflows in its standard plans. Advanced AI features, including real-time transcription and sentiment analysis, are available as add-on services.
Pricing: Plans start at $13.99 per month per line (billed annually).
6. Five9
Five9 is designed for growing businesses with high-volume contact centers. Its system includes predictive dialing (which automates outbound calls, only connects agents with answered calls, and automatically maintains compliance with telemarketing laws) and real-time adherence monitoring as standard features, making it suited for larger operations. Premium features like AI-powered agent assistance and an advanced analytics dashboard require additional licensing fees.
Pricing: Five9’s voice-only plans start at $119 per month (36-month contract).
7. Genesys
As a part of its broader agentic AI offerings, Genesys provides enterprise-focused features, including AI-powered customer journey mapping and omnichannel capabilities. Its system offers advanced personalization that remembers customer preferences across all touchpoints and includes built-in workforce engagement tools (like staffing forecasting, time-off management, and call quality analysis). Premium AI features like predictive routing and real-time customer sentiment analysis are available through additional modules.
Pricing: Plans start at $75 per user per month (billed annually).
What is IVR FAQ
What is IVR, and how does it work?
Interactive voice response is an automated phone system that uses voice commands or keypad inputs to route callers and provide automated services through programmed menu options.
What are the disadvantages of IVR?
Disadvantages include potentially impersonal customer interactions, complex navigation that may frustrate users, and limited abilities to handle nuanced or emotional customer needs.
How do you call through IVR?
Customers call through IVR by dialing the business number, listening to automated menu options, and either saying their selection or pressing corresponding numbers on their phone keypad to navigate menu options.
