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IVA vs. IVR: Which Is Better for Your Business?

Cameron Coward
Woman using her phone at work.
If you've been trying to figure out whether IVA or IVR is better for your business, you've come to the right place. Let me help you understand which will better suit your needs.

The best way to increase business revenue is by building a loyal customer base. The only way to achieve that is by keeping customers happy—even when your company makes a mistake.

But good customer service is expensive, which is why you might be considering a phone automation system. In this article, I will help you decide if IVA or IVR is better for your business.

Neither will entirely replace your VoIP phone lines and customer service representatives, but IVR (Interactive Voice Response) and IVA (Intelligent Virtual Agent) systems can reduce their workload.

To understand which better suits your needs, you must understand their underlying technologies. While some advanced IVR systems integrate NLP (Natural Language Processing), they can only respond to pre-programmed requests.

On the other hand, IVA systems utilize cutting-edge AI (Artificial Intelligence) to handle all of the same tasks expected of a human customer service representative (CSR). This high-tech advantage has experts predicting that the IVA market will exceed $44 billion by 2027.

» Want to make your contact center the best it can be? Check out our top picks for the best VoIP contact center providers.

What Is IVA?

An IVA (Intelligent Virtual Agent) is an AI that interacts with customers through automated phone systems, real-time chat interfaces, text messages, or emails. It can understand a customer’s natural language without any special formatting and respond to complex requests without the direct oversight of a human agent.

In the event that it cannot handle a request or is not authorized to do so, it can package the information it learns about the customer and their request in a format that is easy for CSRs to pick up.

IVA systems are ideal for businesses that handle numerous customer service calls that require low-stakes resolutions.

An online retailer of car bumper stickers, for example, would be the perfect candidate for an IVA, as it could handle customer requests like issuing refunds without much financial risk. The money saved on human labor would exceed any potentially illegitimate refunds.

What Is IVR?

IVR (Interactive Voice Response) is the traditional “smart” automated phone system that we’re all familiar with. Your bank likely utilizes IVR to let you check your account balances or freeze a debit card without speaking to a human agent.

You shouldn’t confuse IVR with an auto attendant, which is only capable of directing calls and reading static information. While an IVA is more advanced than IVR, it doesn’t mean it's better for every business.

A utility company would have little need for an IVA, as any customer request that doesn’t fit into a handful of common scenarios would necessitate human intervention. That utility company would find IVR more suitable.

» Your small business needs these VoIP features.

IVA vs. IVR at a Glance

IVA
IVR
Costs
More expensive
More affordable
Maintenance
Requires more maintenance
Requires less maintenance
Flexibility
Far more flexible
Less flexible
Customer Experience
Intuitive for customers to interact with
Inclined to causing customer frustration
Automation
Has the ability to expand what it can automate
Requires explicit programming

IVA vs. IVR: Costs

This is the easiest comparison to make and will play a major role in your decision-making process.

Because providers tailor IVA and IVR systems to each business, costs vary and are not published as simple flat rates. But in almost all cases, IVR is more affordable than an IVA.

Winner: IVR

IVA vs. IVR: Maintenance

Both IVA and IVR systems have similar associated maintenance costs. Both require integration with a company’s servers and databases to access and revise records.

However, an IVA requires much more processing power to support the underlying AI. Whether onsite or in the cloud, the systems hosting the AI will require more maintenance than those of an IVR.

Winner: IVR

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IVA vs. IVR: Flexibility

An IVA is, by its nature, far more flexible than IVR. A company must set up explicit scenarios and conditions for IVR to respond to, while an IVA possesses the intelligence to understand unforeseen situations.

Administrators must train their IVA’s AI on expected tasks, just as they would a CSR. But like that representative, the IVA will be able to do more than follow a predetermined script.

Winner: IVA

IVA vs. IVR: Customer Experience

More often than not, I find myself frustrated when I call for support and connect to an IVR system. One only needs to ask a few friends to confirm that that experience is universal.

IVA technology is still young, and most of the public has limited exposure to it, but logic dictates that the IVA experience should be better. Unlike IVR, an IVA can solve unexpected problems, and that should produce results that satisfy more customers.

Winner: IVA

IVA vs. IVR: Automation

Compare a traditional thermostat on a timer to a modern smart thermostat that can learn from residents’ behavior. That is roughly analogous to the difference between IVR and an IVA.

Both provide automated responses, but IVR requires explicit programming, while an IVA’s intelligence and learning ability expand what it can automate.

Winner: IVA

Bottom Line: Which Is Better for Your Business?

Answering this question requires knowledge of your business and your goals. An IVA is more powerful, flexible, and intuitive for customers to interact with. But it costs more, requires greater ongoing resources, and has more power to make decisions—though administrators can always limit their IVA’s authority.

IVR is proven and safe but offers a customer experience that leaves much to be desired. Whether or not IVAs will gain a better reputation is yet to be seen, but all the evidence suggests that they will.

If you’re ready to hand over some of the power to an AI that you already give to your customer service representatives, then an IVA will be the better choice. It will reduce human workload and ultimately save you money.

But if you want to limit the scope of automation and leave the decision-making to humans, then the choice is less clear. An IVA’s intelligence will still provide a better user experience, but its higher costs may not justify its usage over IVR.

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Cameron Coward
Cameron Coward writes for Top10.com and is a former mechanical designer, tech enthusiast, writer and published author. His experience as a tech writer spans 15 years, during which time he has written thousands of articles for a number of leading publications.