A cloud IVR (interactive voice response) system is a call center solution that combines automated voice prompts with integrated features like payment systems and access to live agents. As cloud computing has moved from niche to mainstream, most IVR operations have followed suit by migrating from on-premises to cloud-based solutions.
The advantages of this move are apparent, ranging from greater cost-effectiveness and lower overhead to reduced maintenance requirements and more secure scalability. Meanwhile, cloud-based IVRs also eliminate the need for companies to endure the hassles of installing on-premises systems and hardware.
For these reasons and more, cloud computing is appealing to businesses. However, these benefits alone are not a reliable indicator that you’re ready to use a cloud IVR system. In fact, despite the numerous benefits, migrating call center operations to the cloud can be daunting for many businesses that still use traditional IVRs.
Cloud IVR vs. Traditional IVR
At first, both types of IVR systems appear the same whenever users interact with their automated voice prompts. If the system is on the cloud, however, it opens the door to an abundance of new features and integrations.
How an IVR works and why it exists
An IVR system operates like a phone tree of navigation options, with any menu item you choose branching off into other pre-recorded submenus. Depending on the depth or hierarchy of the phone tree, any of these submenus can spread into other menus.
Whether used locally or deployed to the cloud, IVRs share similar call flows. However, various technologies are integrated into the system to make this possible, like the following:
- CTI (computer-telephony integration) is deployed to communicate and coordinate the interaction between a phone and a computer. It uses dual-tone multi-frequency (DTMF) signals, which generate tones whenever a user presses numbers on their device.
- Voice recognition technology is used by the IVR menu system to interpret and understand speech, including identifying the speaker.
- ACD (automated call distribution) software is used for adequate and effective routing of inbound calls so they are distributed to agents with the most appropriate skills for handling a given issue.
- CLI (caller line identification) data is obtained by the network to help authenticate and identify callers.
- Speech synthesis technology allows call centers to generate voice prompts and human-like responses, often in conjunction with natural language processing (NLP).
- Auto attendants act as virtual receptionists and chatbots that perform the same functions as live operators when managing incoming calls.
The key differences between cloud-based and traditional IVR
- Hardware and infrastructure requirements: Outsourcing your IVR services to the cloud eliminates the need to purchase hardware equipment and infrastructure, as well as the physical space or real estate necessary to store them. As such, a cloud IVR saves you capital that you can invest in other parts of your business.
- Setup, installation, and deployment: Cloud IVR platforms come with the convenience of being set up by your provider, so you only need to activate the features and apps you want to use. If you need to make a few tweaks or customizations, you can do so virtually through the admin console’s dashboard settings. Alternatively, you can contact the cloud IVR hosting provider to help you with tailored accommodations, although this might come at a premium cost.
- Ongoing maintenance: In addition to eliminating the need for equipment, cloud IVRs also absolve you of the need to maintain their supporting infrastructure. With traditional IVRs, you need to hire maintenance engineers and network administrators to oversee hardware operations.
- Remote access: The cloud removes the need to be physically located on business premises to access your organization’s resources.
- Economic model: Like most cloud offerings, cloud IVRs operate on a consumption-based SaaS (software as a service) model. On the other hand, most traditional IVR systems serve the same ancillary or parent organization.
- Scalability on demand: Cloud-based IVR systems can take advantage of geographically dispersed data centers, which means they are better suited for scalability. Since changes in service can be done virtually, you have more flexibility when responding to the vagaries of demand and supply.
- Access to analytics: Cloud IVR systems have abundant access to built-in analytics, mainly due to the expertise of their managed service. These platforms can enable you to gauge customer sentiment by implementing and tracking customer experience scores. You can also conduct analytics on the conversations between your callers and agents to provide a richer context for customer interactions. This can give you insight into the subjects discussed, their priority levels, and overall communication tone.
- AI-powered technologies are able to produce live transcriptions and perform sentiment analysis on customer calls so you can automatically track the quality of your customer experience.
10 Signs That You’re Ready for Cloud IVR
If you are wondering whether it is time to consider migrating to a cloud IVR, heed the following telltale signs.
1. Unorganized business or call center communications
If you are still answering your inbound telephone calls manually, that’s a huge indication that an imminent change is needed. Another significant pointer is when your business juggles multiple business communication systems to handle all of its inbound and outbound touchpoints.
Consider the following systems at your business:
- A contact center platform
- A VoIP-based phone app/system
- Video conferencing
- A team and instant message app
If your company uses many different programs and services to execute these functions, switching to a cloud IVR can reduce the bloat of your tech stack. Consider adopting an omnichannel, cloud-based Unified Communications as a Service (UCaaS) platform.
2. Remote workforce
Perhaps you operate a hybrid or distributed remote team. In this case, a cloud IVR would provide flexibility and scalability so your staff can collaborate better from various locations. This is especially true if you operate a global business.
3. High abandonment rates
When your callers abandon calls before reaching an agent or resolving their issues, it signifies underlying fundamental issues. Whether it is due to long queues leading to long wait times or callers being routed to the wrong destination, a cloud IVR can help mitigate these problems.
For example, a cloud IVR can address high call abandonment rates with intelligent routing, call-back options, and unified data to direct customers to the appropriate path.
4. Budget
Another sign that it’s time to move to cloud IVR is when you are maintaining costly IVR equipment that doesn’t justify the budget it incurs, either due to underutilization or failure to deliver a return on investment (ROI).
The cloud provides a way out of this budget impasse, essentially allowing you to “rent” servers and technical expertise at an affordable price. While you’re at it, cloud-based options also offer other downstream advantages, such as on-demand storage that’s both inexpensive and high-end.
5. Call volume and scalability issues
If you have issues handling increasing call volumes, it’s a strong indicator that it might be time to pivot to something else. Whether you anticipate continuous growth or seasonal fluctuations, a cloud IVR system provides better scalability and flexibility than traditional IVR.
6. Customer demand is uncertain
Operating and maintaining your own infrastructure is expensive already, but what’s even worse is when it’s left languishing because it isn’t being properly utilized or maximized.
If a traditional IVR system is met with uncertain customer demand, its owners will likely experience issues with capacity utilization and poor ROI. However, a cloud IVR platform can circumvent this issue by scaling operations according to demand. This creates a win-win scenario in which customers are kept happy with consistent service, while the call center doesn’t have to pay for things it doesn’t use.
7. Pending network and system upgrades
If your network and hardware equipment are aging, and you are approaching their technological end-of-life, it’s a good idea to switch to cloud-based IVR.
If not, your legacy systems and software may not be compatible with compliance features and modern requirements much longer, so a major equipment upgrade will be needed anyway.
Having your system on the cloud ensures you have top-notch, up-to-date technology while immunizing you from the disruptions of system or equipment upgrades.
8. Regulation and compatibility
Governmental agencies have enacted worldwide-impact regulations, like the European Union’s GDPR, impacting any business that handles customer data. These regulations add another layer of complexity and bureaucracy for companies to deal with.
Rather than twisting yourself into a pretzel to meet the requirements demanded by the various widespread jurisdictions, switching to a cloud-based provider can guarantee adequate standardization and assistance in remaining compliant.
9. Workload fatigue
The day-to-day operations of running an on-premises system—like maintaining its vast tech stack, call center monitoring, and providing excellent customer experience—can be daunting for a single organization. If you, your agents, and your staff desperately need a lifeline, then a cloud-based IVR might be it.
Perhaps you’ve grown tired and weary of doing the heavy lifting necessary to keep your on-premises system up and running. A cloud IVR lets you focus that effort on your core business and customers instead.
10. Your call center has reached its limits
If you think your staff has already squeezed out the last bit of juice from your on-premises call center, you might have outgrown its services.
Cloud IVR call centers offer much more advanced and modernized solutions for growing your business and serving your customers. If you find yourself looking for a platform that enhances your customer service, offers advanced analytics, and streamlines internal processes, consider a cloud IVR call center.
9 Key Benefits of Cloud IVR
1. Operational cost-savings
Cloud computing providers offer significant economies of scale to their clients. Moreover, they tend to have a price-friendly, pay-as-you-go business model that requires very little capital investment.
Cloud IVRs also don’t require hiring IT staff for maintenance or oversight. As a result, they can provide huge cost savings in every aspect from maintenance to operations.
Furthermore, because of its built-in ability to increase operational cost savings, cloud IVR can also improve a company’s revenue per successful call, which is a useful KPI (key performance indicator).
2. Improving customer satisfaction
Many of the integrations offered by the cloud can help your IVR offer top-notch customer service. For example, just being on the cloud ensures customers can access IVR services on any device through its omnichannel capabilities.
Therefore, the cloud IVR has all the ingredients to improve customer satisfaction metrics like customer effort score (CES) and customer satisfaction scores (CSAT).
CES measures the effort your customers have to invest to achieve a desired result, and CSAT indicates how happy or satisfied your customers are with your services.
Since customers generally want a frictionless process, you should aim to reduce the effort required during their interaction with your cloud IVR. Your efforts should include measures that shorten caller wait times, eliminate the need for follow-ups, and reduce the number of times a call gets transferred to another agent.
A cloud IVR can boost CES and CSAT scores by helping you create a better caller journey. The resulting mapping process adequately routes customers to the proper agent that can handle their issues expertly and expeditiously.
3. Improving the speed and flexibility of IVR operations
Cloud platforms have advanced to become turn-key operations. Therefore, you can get cloud IVR systems up and running in a fraction of the time required to set up a traditional, on-premises system.
Once in motion, a cloud IVR can also improve the FRT (first response times) of your call center operations. FRT measures the time it takes for a customer’s call to be answered or the time that elapses between a customer raising a ticket and an agent first responding to it.
Reducing FRT is important, and most businesses use it to benchmark a specified timeframe by which agents must respond to a customer. Cloud IVRs can improve FRT by incorporating omnichannel models, for instance, providing chatbots that address customer queries instantaneously.
4. Increased efficiency
Cloud IVR has robotic automation technologies that help you retool operations to handle complex tasks. These technologies free your agents from routine, monotonous tasks so they can focus on more complex, value-adding assignments.
When agents gain more experience dealing with complex issues, they’re able to improve your call center’s overall first-call resolution rate (FCR). The FCR metric gauges how often your agents and support team resolve a customer’s issue on first contact.
A cloud IVR can improve FCR scores by embracing skill-based routing and call listening to ensure your best agents get connected to the right customer service issues.
5. Redundancy and disaster recovery
Cloud platforms have built-in redundancy by storing your data across many geographically dispersed data centers. Moreover, they also maintain automatic backup and recovery services, so you don’t need to worry about data recovery and business availability in the event of an incident.
6. Advanced reporting and analytics
Analytics allows you to capture insights and discover patterns in customer data. As a result, cloud IVR analytics will enable you to pinpoint trouble spots and problematic areas. These reports and real-time insights allow you to make data-driven decisions to improve the quality of your contact center’s service.
7. Continuous updates and automatic deployment
Cloud environments provide near-constant improvements and updates to your system and apps. Therefore, you can roll out software changes and code with little or no friction experienced by the end-user.
Therefore, customers will see the addition of new features, product updates, and customer relationship management (CRM) integrations to boost productivity on a regular basis.
8. Scalability
Cloud IVR gives you the flexibility and nimbleness to ramp up and ramp down operational capacity depending on things like seasonal demand and unexpected changes in call volume. This ensures optimum capacity utilization for your contact center resources.
9. Real-time configuration
The cloud allows you to fine-tune configurations, update settings in real time, and update your call center offerings without requiring customers to install or download software.
How to Use Cloud IVR (the Right Way)
Step 1. Set up your IVR and menu trees the proper way
At this stage, the topmost consideration should be designing menus with clarity and simplicity. A wrong step here can negatively affect other parts of your phone tree.
Don’t start by overwhelming callers with too many options. If you find yourself crafting a response with too many listed options, find a way to break it down into deeper hierarchies with sub-menus. An ideal rule of thumb is to ensure that the full length of your menu options doesn’t exceed 30 seconds.
Step 2. Establish call routing flow
Try to create an intelligent inbound call routing map that has logical and intuitive steps. The routing map should also incorporate the ability to differentiate between calls based on their response, customer type, current customer journey, location, and more.
Step 3. Use natural-sounding call recordings
Whether you do the recordings yourself or use text-to-speech (TTS) software, make sure your IVR audio prompts are as realistic and natural-sounding as possible. People don’t want to hear an impersonal, robotic voice on the other end of the line.
Sticking with cloud IVR vs. hiring more call center agents
If you’ve designed your cloud IVR correctly, its primary use case should be to provide customers with the answers to elementary questions without needing to reach an agent. This arrangement frees your agents to respond to complicated issues, ensuring their time and expertise are optimally utilized.
Therefore, you should only consider expanding to a call center with more agents when the volume of inquiries regarding complex issues that can only be handled adequately by live agents rises substantially.
Keep an eye on your KPIs that indicate your IVR flow is struggling. If everything looks good but your agents are still showing signs of being overloaded, you should consider expanding your staff.
Scaling With Your Cloud IVR
A good place to start consolidating your business communications or scaling your call center is Nextiva. To learn more about it, check out our full review of the Nextiva platform.
Alternatively, we’ve also compiled a list of the 15 best cloud phone systems on the market today.