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Contact Center Automation vs. IVRs: What’s the Difference?

Contact Center Automation Is Refreshing the Customer Experience

The phone has long been customers’ preferred method for communicating with companies, and it continues to be so. By far, phone or voice is the customer service channel that consumers across multiple generations and countries prefer. 

But historically, voice has also been the most expensive channel for contact centers. Staffing agents to answer phone calls incurs heavy labor costs and limits the number of customers that contact centers can serve at one time. 

Scalability and cost have been and currently still are major challenges for contact centers today. As contact centers digitally transformed over the past decade, many have lowered their costs by adopting Contact Center Automation. Most notably, interactive voice response (IVR) systems have helped contact centers operate more efficiently. 

IVRs have frustrated customers, though. More than 60% of consumers feel “IVR technology makes for a poor customer experience” because they feel forced to choose from inflexible menus and can’t reach a live agent.

As AI and automation have advanced in the last few years, companies now have a way to give customers the flexible and intuitive voice experience they want and at 50% of the cost of an offshore call center. Contact Center Automation also brings the same, natural experience to every channel, allowing companies to reimagine customer service.

But what’s the difference between Contact Center Automation and IVRs? Let’s break down the difference at a high level.



Contact Center Automation

What it is

An automated phone system

Omnichannel automation for tier 1 service leveraging conversational AI

Customer service channels it’s used for


Phone, SMS, and other digital channels

How customers interact with it

Customers recite a number, a keyword, or press a key on their dial pad

Customers talk or type just as they would naturally communicate with another human, in any language 

Interactive Voice Response (IVR)

IVR is a technology that allows humans to interact with an automated phone system by using their voice or dial pad. The IVR presents customers with a menu of options to choose from. Customers select an option by saying a keyword, a number, or touching a button on their phone. IVRs can route customers to a live agent, present self-service options, walk customers through troubleshooting, and authenticate customers.

Although contact centers can reduce their costs and increase first contact resolution with IVRs, these benefits come at the expense of customer satisfaction. Customers may have to wait through the whole list of menu items before choosing. Predetermined “this or that” options mean IVRs don’t always offer the right option for a customer’s situation or the caller won’t know which option is best for them.

They also make customers feel like they’re being deflected, or re-routed, rather than making progress on their request at first touch.

Customers have to speak in the IVR’s language, since IVRs aren’t built with natural language understanding (NLU). As a result, they aren’t able to understand how humans naturally speak. They also don’t recognize multiple intents, like “I want to update my payment information and return an item.”

With all these limitations, it’s not surprising that 64% of survey respondents had negative feelings, such as frustration, stress, and anger, when presented with an IVR. So are IVRs really helping contact centers, or are they hurting brands instead?

Contact Center Automation

Contact Center Automation is an emerging category in which companies automate tier 1 customer service while empowering agents to focus on more complex and nuanced customer challenges. It’s a hybrid approach that helps companies resolve as many customer service requests as possible through automation, by whatever channel the customer prefers- voice, chat or SMS.  This allows human agents to focus on the more complex customer support challenges.

It uses a combination of conversational AI, machine learning, NLU, NLP (natural language processing), and other technologies that enable humanlike interactions between humans and machines. Unlike IVRs, Contact Center Automation enables machines to understand how humans naturally speak or write.

When Contact Center Automation is applied to voice, customers can call and ask questions as they normally would and switch between topics. Instead of being asked to “press one,” customers can simply say, “I didn’t receive my package.” The AI will understand the customer’s intent, which is they want to get an update on their shipping status. Customers can even resolve multiple issues in a single conversation, since AI understands multiple intents.

Contact Center Automation leverages a shared intent library, meaning every channel provides a consistent experience, and solutions come purpose-built and ready to deploy for the contact center space.

Which is Right for Your Contact Center?

It’s important to first understand this isn’t an either-or situation. You don’t need to choose between using an IVR or Contact Center Automation. Contact centers can leverage both by placing Contact Center Automation in front of or behind an IVR.

When Contact Center Automation is in front of an IVR, it will be the first interaction that customers have when they call. If the AI isn’t able to resolve the customer’s issue, the customer is routed to a live agent with an intelligent, time-saving escalation. When Contact Center Automation works behind an IVR, customers will need to first select a menu option before being put in touch with the AI. Many contact centers, however, find the ROI and effectiveness of Contact Center Automation to far outweigh their IVR, and eventually replace the legacy system with automation as a whole.

Both IVRs and Contact Center Automation help contact centers serve customers more efficiently, reduce their costs, and automate the resolution of tier 1 issues. If you do need to choose one, the answer depends on the way you want to run your contact center and the experience you want to give customers. Since Contact Center Automation understands how humans speak, can process multiple intents, gets smarter over time, and doesn’t lock customers into a phone tree, customers enjoy an easier and smoother resolution to their issues.

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