In Conversation: The Difference Between IVR and Conversational AI

In an era where contact centers are striving to deliver efficient self-service solutions that help to elevate customer experience while reducing support costs, the need for innovative technology has never been more critical.

In this engaging discussion, Verint’s Kelly Koelliker, Vice President of Content Marketing, catches up with Donna Fluss, Founder and President of DMG Consulting, to explore the key differences between traditional interactive voice response (IVR) systems and the new generation of conversational AI (CAI) solutions.

Kelly and Donna dive deep into how cutting-edge CAI solutions leverage advanced artificial intelligence to surpass the capabilities of outdated IVRs, offering organizations an opportunity to revolutionize their customer experience strategies.

This conversation not only highlights the transformative potential of conversational AI but also addresses the practical challenges businesses face in adopting these innovations.

Join Kelly and Donna as they explore the significant advantages of CAI, from significant increases in interaction containment to substantial cost savings—and understand why enterprises that are hesitant to make the switch risk falling behind their competitors.

Kelly: Today we’re going to chat about a popular topic, which is AI-powered virtual assistants or conversational AI assistants, and how you can use these solutions to ramp up your self-service experience.

So, Donna, let’s dive right in. What’s the difference between a traditional IVR and these new conversational AI solutions?

Donna: Traditional IVR solutions, which most of us are very accustomed to right now, offer fixed and predefined menu options that are typically limited to four major options and four sub options, and they follow a fixed flow. With conversational AI, it can have many intents—intents being another way of saying options or uses. And you can have as many as you’d like, and customers can ask for anything in a conversational manner. Now, CAI solutions, as I mentioned, support both voice and digital channels, as compared to inbound IVRs that only support voice.

But the most significant difference with CAI solutions is that they use GenAI to clarify the request in order to source a proper response. And in most cases, it’s not a fixed response. The response will be delivered in a manner that’s appropriate for the input for the question.

Kelly: So the way you’re describing it, it sounds amazing and far superior. These conversational AI solutions sound so much better than a fixed IVR, but how come when I call customer service, I’m still hearing a lot of these IVRs. Why are some of these enterprises slow to adopt this new gen AI technology?

Donna: Well, isn’t that a great question, right? Particularly if we look a little bit at the history of what’s going on within the marketplace.

Most of the IVRs in the market today are 5, 10, 15, as many as 20 years out of date. And what happens in a lot of companies is that you put in an IVR, and it was a significant project. And let’s say you get a nice displacement, it could be 65 percent, it could be 85 percent, and the operation’s really very satisfied with that.

And the business will know that it needs to update it. But, when they ask for the funding, they’ve been turned down, in a lot of cases. And it’s really an issue of if it’s not broke, let’s not fix it.

“But organizations are really missing out on the opportunity to improve their overall customer experience and at the same time increase the displacement. Because these new solutions, when they’re designed properly, can do a lot more than a traditional speech-enabled IVR.”

Donna Fluss, Founder and President, DMG Consulting

Kelly: So, let’s talk about that. Because when you’re talking about getting a new technology approved, it comes down to the results, the benefits. So, what are the types of outcomes organizations can expect to see from these solutions, so they have that in their pocket to help make their case to get this approved?

Donna: The expected outcomes and benefits from customer-facing conversational AI solutions are very, very significant. It’s most common to see a payback or return on investment of somewhere between 12 and 24 months, depending on the implementation. However, I want to point out that there’s lots of variability here.

In some cases, organizations are putting in a new conversational AI solution from scratch. In other cases, they’re replacing an existing speech-enabled IVR, or for that matter, even a DTMF (dual tone multi frequency), touch tone IVR. And in other cases, they’re doing a little bit of what I’m going to refer to as a hybrid, where they’re keeping their IVR but adding CAI to automate a couple of the options that really benefit from its conversational capabilities.

So, it’s really dependent on the implementation, but there are hundreds of these implementations in the marketplace. Kelly, what are you seeing from your end?

Kelly: We’ve seen some great outcomes. We’ve done similar things where sometimes people will start small. We think that’s a good way to do it.

Start small with a few intents and grow, but we’ve seen customers raise their containment rate.

“On average, they’re able to raise it by over 20 percent from where it was, but we’ve seen people on the phone channel achieving over 50 percent containment. On digital channels, we’ve seen as high as 80 percent containment in some cases.”

Kelly Koelliker, VP Content, Verint

And these brands are saving over $10 million in some cases. And it obviously depends on the size of your company and how many inquiries you’re getting, but we’re seeing really, really impressive outcomes from our customers.

Donna: And that’s one of the reasons that conversational AI solutions are really attracting a lot of attention right now. It’s because they have a lot of potential and quantifiable benefits, both in terms of automating more, as well as improving the overall CX for organizations.