How IVR Technology Works: 11 Key Terms to Know

You’ve certainly encountered IVR technologies countless times throughout your life. But if you’re not familiar with the term, you’re not the only one. Many people use IVR but are unaware of how IVR technology works or even what the acronym stands for.

But if you’re a business owner, learning about IVR systems for call centers and IVR service providers is something that could completely transform the way you serve your customers.

What Is IVR Technology?

IVR stands for interactive voice response. An IVR system is often the voice that greets you when you call a business, helping you connect with the right department so you can get the help you need as quickly as possible. Many types of businesses use IVR to reduce call times and streamline the customer service experience, including medical offices, customer support departments, and more.

Technology Behind IVR

Learning about the technology behind IVR may seem overwhelming, but it’s much easier to understand when broken down into simple definitions. Here are some key terms relating to IVR technology.


Dual-tone multi-frequency refers to the technology used on touchscreen phones to navigate a phone menu. Whenever you press a number button and it makes a beep sound, it’s sending a signal to the IVR system to send the caller to another branch of the menu.

2. Voice Recognition

Just as callers can press a button to navigate to another part of the phone menu, they can also speak to the IVR system to get to the department they’re seeking. This is known as voice recognition: the system comprehends what the person is saying, turns that into a command, and responds accordingly.

3. Natural Language Processing (NLP)

Natural language processing is a specific type of voice recognition. NLP allows the caller to say what they’re looking for in several different ways, rather than responding exactly as the menu asks them to. For example, they might say, “I need help with my computer,” rather than waiting for the IVR system to tell them, “Say ‘2’ for computer support.”

4. Artificial Intelligence

When computer systems are taught to carry out specific jobs without being narrowly programmed to do the task, this is known as artificial intelligence. In short, the computer “gets smarter” and more efficient at the task as time goes on. This technology is applied to IVR systems to make phone menus easier to navigate and enhance the customer service experience.

5. TTS

Text-to-speech systems allow businesses to automate their customer service using human-sounding voices. For example, a company could write out an entire phone menu and possible outcomes, and then the computer system would recite the text to the customer when appropriate.


VoiceXML is a type of IVR programming language used to build a variety of voice applications. This language is now considered the industry standard, thanks to its ability to more easily automate interactions with customers.


Transmission Control Protocol/Internet Protocol enables computers to speak to each other over the internet. It does so by pulling together groups of data and then putting them in the proper location. IVR systems use TCP/IP to move information from the caller to the system.

8. Call Flow

What is IVR call flow? This term refers to the options a caller selects on their journey to the right department within a business. For example, the caller might start on the main menu, press “3” to be directed to the customer support center, then press “1” to get help with an existing order.

Problems IVR Can Help Resolve

Now that you know more about IVR technology, you may be wondering how you can best apply it within your organization. Here are just a few problems IVR can help resolve.

First Call Resolution

The best IVR systems will route callers to the proper destination, allowing them to get the help they need the first time they contact your business.

Time in Queue

When your IVR is properly optimized, you’ll be able to reduce time in the queue by helping customers more quickly and efficiently. This will free up agents to help more customers in a shorter amount of time.

Abandonment Rate

Do you have a large number of customers hanging up before having their problem resolved? That’s a high abandonment rate. IVR can help by simplifying the customer service process and reducing frustration among callers.

Using IVR in Your Call Center

We’ve only scratched the surface of IVR and its potential to help your business. If you’re interested in implementing IVR technology to serve your customers better, get in touch with ROI Call Center Solutions. We can set up an IVR system and use it as we handle your inbound calls. Find out more today.

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