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Pimp my IVR through personalization.
By Daniel Hong - Posted Jan 10, 2010
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In the past five years, customer service expectations have changed dramatically. Call volume has gone up across industries, and self-service has mushroomed. The proliferation of mobile devices has created a mobile generation and introduced new touch points. Customers have grown accustomed to a significantly improved Web experience due to personalized Web content and transactions. 

Unlike the Web, personalized self-service has not surfaced in the voice channel mainly because of the complexities involved in implementing such a solution in the telephony environment. However, the emergence of Web-based open standards like VoiceXML in the telephony world has opened new possibilities for personalized phone self-service by simplifying the design, development, and management aspects of interactive voice response (IVR) systems. This is fortunate because many of today’s IVR systems are in need of improvement.

The majority of customers are frustrated with current automated phone systems due to a variety of reasons that stem from poor application design. These include lengthy call menus, bad call flow design, contextually irrelevant menu options, inaccurate routing, looping, and an inability to route to agents. 

While Web sites have evolved to reflect the needs of the customer, phone self-service, for the most part, has not. Most IVR systems are one-dimensional and do not have personalized call flows, dynamic menus, or recent customer history-based transactions.

During the past 12 months, interest in personalized IVR has grown as companies try to improve their existing speech-enabled and touch-tone IVR systems. While there is still not mass adoption of personalized IVR, Ovum predicts enterprises will invest steadily in these solutions during the next several years, driven by the need to provide better customer service while reducing spending. 

Personalized IVR is not a single product; it is a customer service solution comprised of a variety of technologies. Ovum considers IVR truly personalized if it connects with enterprise databases such that the solution accesses caller histories, trends, and geographic locales—information that might affect the nature of the customer service call. The solution creates a unique customer service experience by reconfiguring the automated call flows or by intelligently routing the caller to a skills-based agent, enabling a swifter resolution of the problem. For example, if a customer contacts a retailer deploying personalized IVR, then the solution might identify the customer based on his phone number or Automatic Number Identification (ANI), and access his purchase history to ascertain whether he had previously placed an order for a product. Consequently, the automated self-service solution might activate a prompt asking if the customer is calling about his recent order. If the customer says yes, the IVR can then route him to an agent specializing in order queries.

There are four different types of personalization for IVR:

  1. personalization by caller behavior;
  2. personalization using outbound IVR;
  3. personalization by caller type; and
  4. personalization by caller relationship. 

Ultimately, it’s important to note that personalization isn’t simply an add-on to IVR technology. It’s an ongoing solution that’s often installed incrementally.

Personalized IVR is not a novel concept, and customers have shown a preference to interact with these applications. If the development, implementation, and management of these applications had been easier, then most companies probably would have implemented a personalized IVR by now. However, successfully deploying a personalized IVR becomes easier with the right components and strategy. Businesses should, therefore, look to those components that enable personalization features, as well as those that help reduce complexity and simplify management of IVR systems.


Daniel Hong is lead analyst for customer interactions at Ovum. He can be reached at daniel.hong@ovum.com. For more information on this topic, read “Intelligent Automation: The Rise of Personalized IVR in Customer Self-Service” at www.ovumkc.com.

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