History of IVR (Interactive Voice Response) & Its Evolution Through the Years
Corey McCraw is a staff writer covering VoIP and Unified Communications. Corey has over a decade of experience in marketing, tech writing, and corporate communications and has even penned content for the former First Lady Michelle Obama’s Let’s Move initiative.
Rain is a staff writer at Fit Small Business focusing on sales, such as VoIP and video conferencing.
This article is part of a larger series on VoIP.
The history of interactive voice response (IVR) systems started in the 1930s when the Voder machine was created. This technology was the first to analyze the English language and produce human-like audio. In the 1960s, the Bell System built a dual-tone multifrequency (DTMF) technology, enabling the development of phones with keypads. Innovations kept emerging—leading to computer telephony integration (CTI) that gathers customer communication into one platform.
In this article, we’ll discuss in detail IVR’s history, how it has advanced through the years, its overall impact on the customer journey, and what’s next for this technology.
The History of IVR
- 1930: An electronic voice machine, called Voder, was created. It produced human speech-like sounds.
- 1960s: The DTMF technology was built, allowing the creation of phones with keypads.
- 1970s: Increase in usage of expensive IVR technology.
- 1980s: Call center technology boomed, and the first mainstream market competitor for IVRs was launched, making it cost-effective.
- 1990s: IVRs—which could migrate multimedia at this time—became must-haves for call centers.
- 2010s: All-inclusive platforms were developed. IVRs became integrated with robust analytics and automatic SMS messaging features.
- 2020s: IVRs have become vital parts of any customer journey. It is now integrated with marketing campaigns in multiple channels.
The 1930s: The Invention of the Voder
The Voder, derived from the phrase “voice operation demonstrator,” was the first electronic machine to produce synthetic human speech. It was created by Homer Dudley of Bell Laboratories. Its process involves converting buzzing tones from their relaxation oscillator into vowel and nasal sounds. The device also features additional special keys to generate complex consonant sounds.
The Voder can be operated through keys and pedals to produce human-like audio. (Source: Wonderful Engineering)
The invention was aimed at transmitting synthetic voice over copper-wire phones. The Voder was first launched at the New York World’s Fair in 1939 and then presented in San Francisco in 1940. There were only 20 trained operators who could maneuver the machine during these demonstrations.
The 1960s: The Invention of the DTMF
The earliest call centers consisted of many individuals who picked up calls only to reroute them to the proper agents. Developments were emerging to provide a more cost-effective solution, leading to the creation of the DTMF.
The first telephone keypads consisted of a four-column layout with letters A to D.
DTMF is a signaling system that enabled touch-tone dialing and the emergence of phones with keypads. The four-column DTMF keypad layout consists of letters “A,” “B,” “C,” and “D,” with numbers “0” to “9,” and “*” and “#” keys. Replacing the rotary dial, the touch-tone system with a keypad became the standard for mobile and landline services.
The 1970s: Increased Demand & Usage of Expensive IVRs
The touch-tone system and synthetic speech made it possible for the first IVR solution to emerge in the 1970s. This integration allowed improved interactions with consumers, even though its set of vocabulary was still flawed. The usage of IVR technology increased during these years, even though it was still too expensive for call center automation.
The 1980s: Growth in Call Center Technologies & IVRs
In the 1980s, there was a great increase in the need for IVRs. Modernizations in call center technology were fast-growing, resulting in economical setups for customer service.
This decade is when Perception Technology—the first mainstream hard drive market competitor—was launched by Leon Ferber. This system enabled storing digital speech on a disk, playing a particular audio message, and processing DTMF responses.
The origination of computer telephony integration (CTI) came as the IVR evolution continued. Other innovations included speech-enabled IVRs along with early developments in machine learning (ML) and artificial intelligence (AI).
The 1990s: IVRs With CTI Became Vital for Call Centers
IVRs became widely used for businesses in the 1990s. Meanwhile, the usage of call queuing and automatic call routing became common by the mid-1990s. In the late 1990s, multimedia migration to call centers led to companies investing in IVR systems with CTI.
This integration allowed businesses to integrate their call centers into their marketing campaigns. Moreover, the continuous enhancements in IVRs made them cheaper for company implementation.
The 2010s: The Emergence of All-inclusive Call Centers With IVRs
Contemporary platforms emerged in the 2010s. An emphasis on integrating IVRs with comprehensive analytics, automated SMS messaging, and advanced call monitoring features was evident during this period.
Modern IVR systems are now part of a larger solution—allowing seamless integrations of customer communications across channels. Unlike bulky and expensive standalone systems, these advanced all-inclusive platforms now offer options, giving customers the opportunity to choose their preferred method.
The 2020s: IVRs Became an Essential in the Customer Journey
Nowadays, IVRs are already incorporated into the overall customer experience. It now comes with a personalized brand voice, customer data protection, and fraud and spam detection. In addition to routing to the best department to solve customer needs, this tool is now integrated into marketing efforts.
The self-service model has grown significantly with the emergence of conversational IVRs. These artificial intelligence (AI)-powered technologies replicate the experience of speaking with a live agent.
IVR Systems Today
Present-day IVR systems provide solutions to customers faster, even without the need to connect with a live operator. It is useful for many industries and uses. It can help manage hotel reservations, bills payment, market research, ticket purchases, and present information on products and services.
These latest functionalities meet the market’s needs. Zendesk’s research shows that 69% of people try to solve their problems on their own before contacting customer service. However, businesses must ensure that they are implementing IVR self-service best practices to increase customer satisfaction. A poorly designed automated system can break a business, especially if it wastes consumers’ time without addressing their issues.
Looking for platforms to help you handle customer communications? Check out our list of the best business phone systems to determine which product is a great fit for your needs.
What’s Next for IVR Systems
IVR systems might have come a long way already, but they are still constantly advancing. We are already seeing conversational IVRs in all-in-one communication or customer service solutions. However, we are expecting more innovation concerning AI and ML integrations.
Moreover, the possibilities are endless with the constant growth of technologies. We might see IVRs routing consumers in multimedia content, such as videos, or even online content through apps. We can also assume its support for wearables or collaboration with digital assistants, such as Siri. One thing is for sure, IVR capabilities are here to stay.
Bottom Line
The creation of the Voder machine and the DTMF technology paved the way for the creation of IVR systems. It advanced and expanded its uses, including presenting information, payment processing, and reservation management. Its innovation keeps rising, involving AI and ML for conversational IVRs to reduce call wait times and better customer service.
