IVR vs AI-based Voice Assistant - Which One to Choose?

Customer service can be exceptionally costly. One customer care agent can cost you up to $36,000 a year. In addition, you have to pay for the hardware and rent out space where your agents will work, which can cost you about $48,000. Even if you have managed to set up an in-house customer service, you might still experience challenges with customers who often have to wait too long to reach your agent, as there are not enough of them to handle all the inquiries.

Wondering how to increase the call center efficiency and reduce customer service costs? It is possible with the new digital technologies for call center automation. Automating your customer service allows you to interact with many customers simultaneously, significantly decreasing the number of mistakes and covering more requests.

There are plenty of ways to automate your customer service and call centers. In this article, we will examine and compare Interactive Voice Response (IVR) and AI-based Voice Assistants. Curious what are those?

Read further!

What is Interactive Voice Response (IVR)?

IVR technology has existed for almost 50 years. It enhances the customer experience by giving users a self-service option for the information they require.

It represents an integration of a telephone and a computer, i.e. it is based on a phone system through which customers can navigate with touch-tone keypad selection or voice by choosing options from a menu. IVR system then gives them pre-recorded messages that inform the customers how to proceed. 

It can also transfer calls to a live call center agent and help customers troubleshoot or authenticate them based on keywords or buttons the customers touch on their phone. This way, all centers can handle high-volume calls easily.

In the past, standard IVR technology could only recognize basic orders such as 'yes' or 'no'. NLU technology has significantly improved IVR technology. IVR can now comprehend the words and their context and intent, thanks to NLU. Artificial intelligence enables IVR systems based on it to handle more sophisticated communications.

Conversational IVR is more intelligent and intuitive than standard IVR systems, which results in a better customer experience. It can better understand what customers want and what they are saying, as it allows them to communicate with language they regularly use and recognizes its significance more easily.  It can comprehend complex sentences in addition to simple commands, so conversations seem more natural despite the absence of human call center employees.

Benefits of using IVR

Even the most basic IVR software has many benefits:

  1. IVR systems save time. Customers will wait less if they need to talk to a human agent.
  2. IVR systems save money. Using IVR software, you can reduce labor costs, meaning you will need fewer employees and there will be less need for onboarding.
  3. IVR systems exclude any human-based errors. Without a human customer service agent taking notes and routing calls, there is less room for errors.
  4. IVR systems are more secure. With voice recognition technology it is easier to verify an individual, which is important when dealing with personal information.

Applications of IVR

IVR systems are useful in many industries, including healthcare, banking, retail, etc. Here are some of IVR’s most common applications:

  • Call center forwarding is a feature that allows the IVR system to redirect inbound calls to other numbers and locations
  • Business call routing represents transferring calls to specific agents based on predetermined criteria
  • Emergency information can be easily accessed by customers, i.e. they do not have to wait for an agent to help them
  • Customer satisfaction polls can be more efficiently done with the help of IVR and pre-determined questions and answers to choose from

Even though it is clear that standard IVR is a useful tool, now will describe its more potent sibling - AI-based Voice Assistant.

What is an AI-based Voice Assistant?

AI-based Voice Assistants are in many ways similar to IVR. However, they utilize Artificial Intelligence to provide room for a more natural conversation between customers and machines. Virtual assistants like Apple's Siri and Amazon's Alexa are some of the most famous examples. People ask for assistance with certain tasks when they interact with them.

AI-based Voice Assistants can resolve more nuanced customer challenges as they utilize the advanced technology to learn to recognize the context and intent in speech, not mere text. Beyond IVR, AI-based voice assistants leave only the most difficult customer support issues for humans to handle, taking care of everything else themselves. In addition, AI-based systems are not just predefined networks of algorithms; rather, they can learn as they work and improve on their own. 

Conversational AI, NLU, Natural Language Processing (NLP), and machine learning are all technologies that are used in AI-based Voice Assistants. Such a great technological stack allows it to better understand human speech. Customers may express their wants or problems without having to press buttons on their telephone.

Benefits of using AI-based voice assistants

There are many reasons why AI-based Voice Assistants are the first choice of many companies when it comes to customer service:

  1. More natural language
    Users engage with conversational AI in natural language interactions that mimic human interaction with the help of NLU and NLP technologies. Additionally, its AI-based solution ensures that they comprehend customers' intent, emotions, and attitude. Engagement, therefore, becomes more intimate and human-like.
  2. Data collection
    AI-based Voice Assistants can collect data, e.g. consumer preferences, behavior, and worries, that can help them improve their approach. They can also filter large data sets and highlight the most frequent questions. A good AI assistant can help a business develop a market or consumer research based on the data it collects.
  3. Fewer errors and more consistency
    Machines are less prone to errors than humans. They can also provide consistent answers to various customers. In other words, they provide the same experience for each customer, while human agents can approach every customer differently and have a spectrum of reactions.
  4. They are proactive
    Conversational AI assistants can assist clients even before they ask for help. They are available 24/7 and can also aid in marketing services. They can promote new products or recognize loyal customers which can be rewarded.
  5. Their use is cost-effective
    By using AI assistants you lower your customer service costs, as they can work overtime without additional resources. They also do not require additional training, and you can increase your return on investment. Even small businesses can save a lot of money in the long run.
  6. AI assistants are multilingual
    AI assistants can integrate many languages. Assistants who converse in multiple languages can significantly enlarge your customer base.

Applications of AI-based voice assistants

Aside from everything a standard IVRs can do, AI-based Voice Assistant can, in addition,

  • Collect valuable customer data for you, such as the most frequent problems your customers encounter or the products they are the most interested in
  • Detect the main questions, and positive and negative feedback your customers have
  • Send customers updates regarding new offers or products
  • Detect who your most loyal customers are and know how to approach them differently
  • Recognize emotions or attitudes in your customers’ voices

Now that we have described the standard IVR system and AI-based Voice Assistants, we will compare them so you get a better overview of which technology is more appropriate for your business.

IVR vs AI-based voice assistants - which one to choose?

The main difference between IVR systems and AI-based assistants lies in their capacities- AI-based solutions are more human-like and intelligent. IVR system is a pretty simple solution that is great for providing basic and emergency information. AI-based assistants can look into more complex situations while providing your customers a more intimate feeling.

IVR usually has long menus that customers listen to in order to choose options, which can be tiring and confusing. It is a good choice for smaller businesses that do not have many services.

In terms of customer engagement, IVR systems only collect answers from customers, so in a way, it is not a part of the interaction. AI assistants are truly interactive and can increase your customer engagement.

IVR system is a routing tool that is good for transferring calls but not answering questions. AI assistants are not only capable of transferring calls to customer service agents but can answer specific questions themselves.

IVR only understands its own language and codes, while AI assistants are built with natural language understanding and processing. They understand how humans speak and can recognize different intents and emotions.

IVR vs AI-based Voice Assistants

IVR AI-based Voice Assistants
What kind of situations can they handle? Simple More complex
How interactive are they? Not interactive, one-way conversations They can converse with customers
Can they answer questions? No, it can only transfer calls to agents Yes, they can provide answers to certain questions
What kind of language do they understand? It understands its own programmed language They understand and use natural language spoken by humans
Are they able to collect data? It can only collect simple data about customer inquiries Yes, it collect detailed data about customer interactions and behavior
Do they offer analytics? Yes, it provides information on IVR completion rate, menu navigation, drop offs, repeat calls. Yes, it shares information about voice interactions, behavior patterns, session time, user locations, etc.
Do they provide an auto dialer? No, it can only offer a call back to customers Yes, it provides an auto dialler

Overall, AI assistants provide a better customer experience, utilizing advanced technologies that offer machines the possibility to interact with humans.

Get started with an advanced AI voice assistant is an innovative solution for improving customer service experience based on artificial intelligence. The platform provides a voice assistant that offers superior customer service, making it more natural and human-like.

Aside from routing calls to human operators, the has the capacity to manage both inbound and outbound calls, it has a trainable neural network and can be used for creating different scenarios of communication with customers. 

Check out vTalk AI solution for Outbound Calls.

In addition, it has an integrated analytics system that can offer you performance data based on which you can make future business decisions. Depending on the call’s result, can send SMS and e-mails to customers. can also record all of your interactions with customers and turn speech into text. represents a great example of an AI-powered Voice Assistant that can revolutionize your customer service automation.


In this article, we presented the benefits of automating your customer service through IVR and AI-based voice assistants. Technological advancement is shown to help you lower your costs while making your customers wait shorter amounts of time. We have also reviewed the differences and similarities between the two technologies to help you choose the most suitable option.

We described standard IVR and its more advanced sibling, AI-based Voice Assistant, and compared them. AI-based Voice Assistants have proven to be more successful in copying human interaction and using a natural language. They are also more sophisticated in terms of their ability to answer questions and resolve more complex situations.

Check out vTalk solution “Voice AI Bots for Customer Service Improvement”.

Lastly, we briefly presented, a solution that can install an AI-based Voice Assistant that will offer an impeccable customer service experience.

If you no longer doubt the benefits of having an AI-based Voice Assistant working for you, sign up for services right away.


Is IVR considered AI?

IVR system is not considered AI as it is not capable of learning by itself based on the data it gathers; it is a call routing service.

What is the difference between IVR and voice assistant?

A voice assistant is more interactive. IVR systems only offer options to customers, while voice assistants analyze what customers are saying and can often answer their questions.

Is IVR and automated system the same?

The automated system is a more broad term, and the IVR system is an example of an automated system, however, not a sophisticated one.