The IVR revival: Making old tech new again in your CX playbook

Interactive voice response (IVR) systems have long been the unsung heroes of customer service, enduring decades of technological evolution. While digital channels dominate the spotlight, voice interactions remain vital, with more than 75% of customers still preferring phone calls to resolve their customer support issues. 

In TTEC Digital’s recent roundtable, our experts explored how advancements in artificial intelligence (AI) are redefining IVRs, transforming them from legacy systems into innovative tools for personalization and efficiency.

The evolving role of IVR

“IVR, to me, is the gateway to personalization,” said Cliff Martin, executive director of CX Transformation. Gone are the days of simple call routing; modern IVRs, equipped with natural language understanding (NLU) and sentiment analysis, can identify not only a customer’s needs but also their emotions. Whether a customer is neutral, frustrated, or upset, today’s IVRs adapt to deliver smoother interactions.

Amanda Robinson, director of Conversational AI Strategy & Design, highlighted the technological progress: “It used to be rudimentary — say a keyword at a time. Now, you can speak full phrases, and not only is it recording and transcribing and cleaning out the noise, it then goes on to the natural language engine.” 

From there, intent is analyzed, and customers are directed to the best resource or queue. Innovations like biometric authentication and interactive virtual assistants (IVAs) further streamline the experience, reducing friction for both customers and agents.

Leaders and laggards

The roundtable highlighted some clear contrasts in how industries are adopting IVR advancements. Caleb Johnson, vice president of Sales Operations, pointed out that while financial services and travel are leading the charge, manufacturing is still catching up.

But what’s especially interesting is how different companies are reimagining how IVR can be used. Johnson shared an example from an engineering company that’s turning IVR into something more like a virtual assistant: “When a delivery driver calls a specific number, it notifies the project systems that the delivery is on the way,” he says. “So, we’re starting to see this shift where IVR is no longer just about getting you to the right destination. It’s becoming multimodal, triggering other actions and automations that the traditional IVR couldn’t handle.”

This shift in how we use IVR has picked up pace, especially with the rise of generative AI over the past 18 months, adds Johnson. It’s moving beyond simple call routing to help businesses automate tasks and create more efficient customer experiences. What we’re seeing now is just the beginning of IVR’s potential to truly transform operations.

Fast tracks and data-driven decisions

When executives demand speed, AI platforms deliver. Johnson noted that companies can launch a basic interactive virtual assistant (IVA) within six weeks. While these systems start small, they provide a foundation for ongoing improvement.

However, success depends on data readiness. Martin stressed, “Speed to market is speed to data lake.” Clean, centralized data enables IVRs to route customers efficiently and personalize their journeys. Yet many companies lack this foundation. Robinson added, “I don't want companies to feel like if they don't have that data that they're dead in the water. There are services where you can take call recordings or even transcripts and run it through a program to do that crunching for you. That’ll give you a lot of insight.” 

Calculating ROI

For organizations weighing the cost of IVR modernization, the panel provided guidance. Implementing a basic system with natural language capabilities can cost $75,000–$125,000 — a modest investment given the returns. By shifting interactions to self-service or digital channels, businesses can dramatically lower the cost per call.

“It really comes down to some pretty basic calculations of how much call volume do you have coming through your system, and how much of that do we think can actually be automated or moved into a self-service type of interaction?” says Johnson. Businesses can calculate direct savings for every minute saved in call time, which adds up quickly. With modular implementation strategies, companies can start small, prove value, and expand gradually, minimizing risk.

Steps to success

Success with IVR starts with understanding the customer journey. 

Johnson urged companies to document volumes, pain points, and reasons for calls. Robinson recommended using tools like Conversation Intelligence to analyze call recordings and extract insights. 

After you have a fuller picture of your customer, Martin suggests starting your IVR improvements and automation with the most common transactional tasks first, the ones they are repeating constantly. “Find volume and low complexity first, and you’ll never make a mistake,” he advised. 

Finally, collaboration is key: aligning IT and business teams early ensures a smoother path to implementation.

Key takeaways

1. IVRs are still essential: Despite digital growth, over half of customer interactions still rely on voice channels.
2. Personalization drives success: With NLU and sentiment analysis, modern IVRs create empathetic, tailored experiences.
3. Tech leads the way: Generative AI, biometric ID, and improved NLU are setting new benchmarks for IVR performance.
4. Start small, scale smart: Focus on high-volume, low-complexity use cases to prove ROI and build momentum.
5. Data is the fuel: Clean, centralized data is essential for intelligent routing and decision-making.

The future of IVR 

IVRs are no longer just the “press 1 for sales” system we’ve all dealt with — they’re evolving fast. 

AI is turning them into smarter, more personalized tools that can save time for both customers and businesses. The best part? You don’t need to completely overhaul your system to start seeing benefits. By taking small steps and focusing on the most common interactions, you can gradually build a powerful IVR that works harder for you.

As AI continues to shape the future of customer experience, the opportunity to reimagine your IVR is here. It’s not just about voice anymore — it’s about meeting customers on the channels they prefer, when they need them, and putting voice support back on the customer service menu.