IVR Phone System: What It Is + 4 Steps To Set It Up

Handling phone calls without a system can feel overwhelming. You’ve probably dealt with calls piling up, customers getting frustrated because they can’t reach the right person, or important messages slipping through the cracks. It’s stressful for you, your team, and your customers.

That’s where an IVR phone system can help. It gives you a simple way to manage incoming calls, guide callers to the right person, and even answer common questions without involving your team.

In this guide, we’ll walk you through what an IVR phone system is and how you can set one up in just four easy steps.

What is Interactive Voice Response (IVR)?

IVR, or interactive voice response, is an automated phone system that helps businesses manage incoming calls.

When you call a company and hear a menu with options like “Press 1 for sales” or “Press 2 for support,” that’s IVR in action.

It’s designed to answer common questions, transfer calls to the right person, or provide helpful information without needing a live agent. Some systems let you press numbers on your phone, while others allow you to speak your request out loud.

Your IVR can also work with automatic call distribution (ACD) systems to direct inbound calls to the right department or agent for customer questions.

If you’ve ever called your bank or an airline, chances are you’ve used an IVR technology before. It’s a common tool that makes customer service faster and more organized.

Tired of transferring calls manually? See how Talkroute’s IVR system makes call management easier.

How To Set Up Your IVR Phone System in 4 Easy Steps

Setting up an IVR phone system with Talkroute is easy. Here, we call it the “Call Menu”. You can follow these easy steps to get started:

Step 1: Log In to Your Talkroute Account

First, go to the Talkroute website and log in to your account. Once you’re in, look for the Manager section. This is where you can manage your settings and phone numbers.

Step 2: Go to the Virtual Phone Numbers Section

In the Manager section, find Virtual Phone Numbers. Click on it, and you’ll see a list of your phone numbers.

Next to the number you want to change, click the Edit button. This will open the settings for that phone number.

Step 3: Change Your Call Routing Settings

In the settings, find the option that says Choose Where to Route Incoming Calls.

Click the dropdown menu and select the Go to Call Menu. This tells Talkroute to send all incoming calls to your Call Menu.

Once you’ve done that, click Save & Close.

As soon as you save the changes, the Call Menu will automatically turn on. Any calls to that phone number will now go to your default menu options. These default options are included with your Talkroute account when you first set it up.

Step 4: Add Menu Options

The next step is adding your menu options. Menu options serve as a directory that helps callers reach specific departments or individuals in your organization.

With Talkroute, we give you 5 different menu options that send calls:

• To other phone numbers
• To an audio file
• To an audio file and forwarding phone numbers
• To Voicemail
• Back to the Call Menu

To start, click on Call Menu and then click Add New Menu Option to create a new option.

Forwarding Your Calls

After pressing Add New Menu Option, you will see the tab below. Select the desired option number (like “Press 1 for Sales”).

Add a description (for example, “Sales Department”). Set Go to Users & Numbers in the Choose Where to Route Incoming Calls dropdown.

Pick the type of forwarding you prefer:

• Ring in Sequence means calls will ring one number at a time.
• Ring All means all numbers will ring at the same time.

Add the forwarding phone number(s) you want to use. Then click Save & Close.

After this, the new menu option will now display a route summary showing the destination of your calls.

Sending Calls to an Audio File

If you’d like callers to hear a recorded message (like business hours) when they select a menu option, click on Call Menu and select Add New Menu Option.

Select the desired option number (for example, “Press 2 for Hours of Operation”). Add a description like “Hours of Operation.”

In the Choose Where to Route Incoming Calls dropdown, select Go to Other Destination.

Under What Audio File Should We Play?, select the recording you want callers to hear. Next, choose where to send callers after the audio plays. Click Save & Close, and you’re done.

Here’s what the menu option should look like after setup.

Play an Audio and Forward Calls

To play a prerecorded message before forwarding the call to a phone number, after clicking the Add New Menu Option button, select your desired option number (for example, “Press 3 for Reservations”). Add a description like “Reservations.”

From the Choose Where to Route Incoming Calls dropdown, select Go to Users & Numbers.

Pick either Ring in Sequence or Ring All, then add your forwarding phone number(s).

Then, click More Options and select the recording you want to play before the call is connected.

After clicking Save & Close, the menu option should show a route summary with the audio file and destination.

Route Calls to Voicemail

If you want callers to leave a voicemail when they select a menu option, here’s what you have to do.

In the Menu Option, select the desired option number (for example, “Press 4 for Voicemail”). Add a description like “Voicemail.” Set the Choose Where to Route Incoming Calls dropdown to Go to Other Destination as well.

Next, open the Where Do You Want to Send Callers? dropdown and choose Go to Voicemail Box. After that, click Save & Close.

After that, the new option should look like this.

Repeat Call Menu

If you want to let callers hear the menu again, you can add an option like “Press 5 to repeat the menu.”

To do this, choose the option number you want, like “Press 5 to Repeat Menu,” and add a description such as “Repeat Menu.” Set Choose Where to Route Incoming Calls to Go to Other Destination as well.

In the Where Do You Want to Send Callers? dropdown, go ahead and choose Go to a Menu.

After that, in the Which Menu? dropdown, just pick Call Menu.

Once you press Save & Close, your new menu option should look like this.

No more dropped calls or endless transfers. Watch how Talkroute’s IVR makes managing calls simple.

Types of Interactive Voice Response Workflows

There are three types of IVR workflows:

Touch-Tone Replacement

This is the most basic form of IVR. Callers interact with the system by pressing numbers on their phone keypad.

The caller hears a recorded message with options, like “Press 1 for billing” or “Press 2 for sales,” and the system directs the call based on their choice.

Touch-tone menus are easy to build. Many customers are familiar with this style, so it’s considered one of the most common IVR applications.

Directed Dialogue

Directed dialogue IVR functionality uses voice prompts that ask the caller to speak a set response.

For example, the system may ask, “Say payment, order status, or technical support.” The caller then speaks one of these valid responses, and the automated service continues with the right option.

This type of IVR adds a level of voice recognition but still limits responses to a short list. If the caller says something outside the list, the system will ask again or transfer them for further assistance.

Directed dialogue helps segment callers into the relevant department while keeping the process simple.

Natural Language

This is where IVR interactions feel more natural. With advanced speech recognition technology and natural language processing, callers can speak freely instead of choosing from a short list.

For example, a caller might say, “I need help resetting my password,” or “I want to check my order status and update my account number.”

The system understands the request, matches it to the right agent or department, and directs the call without forcing the caller through long menus.

Most modern cloud-based IVR systems with natural language can even handle complex customer interactions, giving a consistent customer experience to many customers.

It also reduces the need for live agents, since automated systems can resolve many requests.

Set up voice prompts and call menus in minutes. No coding, no hassle. Just an efficient IVR system that helps callers reach the right person fast. Book a demo today!

What IVR Phone Systems Offer Your Business

An IVR automated phone system can make handling calls much easier for you and your team. Here are the key benefits it can bring to your business:

Saves You Time

An IVR system can take care of common questions, like your business hours, account balances, payment details, order status, or appointment scheduling.

Instead of answering these calls yourself, your IVR system can guide callers to the right information instantly.

This means your team spends less time handling routine calls and can focus on tasks that need more attention. By reducing the call volume your staff has to manage, an IVR system helps you stay organized and productive.

Improves Customer Service

Nobody likes being put on hold or passed around to different agents. An IVR system speeds up inbound calls by letting customers choose the option that best matches their needs.

This connects them directly to the right customer service representatives, making the process quicker, smoother, and less frustrating.

An IVR software also provides clear instructions, so callers always know the next steps to take. This organized process makes a big difference when it comes to keeping your customers happy.

Reduces Missed Calls

Missed calls can mean lost business. An IVR system helps you reduce this risk by letting you route callers to an available staff member in case you or the usual agent receiving these calls aren’t around.

If everyone in your team is busy and the call queues, the IVR can provide important information or send the caller to voicemail, so no inquiry goes unanswered.

Gives Your Business a Professional Image

First impressions matter, and your phone system is often the first point of contact for new customers. Modern IVR systems show callers that your business is organized and professional.

Callers won’t reach a busy signal or wait through endless ringing. They’ll hear clear directions with simple options, which creates a good first impression and helps build trust with your customers.

Works 24/7

Your business may close at night, but your IVR system can keep working around the clock, like an after hours phone service.

Even when your team is unavailable, callers can still access helpful information, leave messages, or get directed to emergency contacts if needed. This makes your business more accessible and allows you to stay responsive even after hours.

Tips for Setting Up an IVR Phone System

Setting up IVR in your contact center software can make managing calls easier, but getting it right is key.

Here are our tips to create a system that’s clear, helpful, and easy for your customers to use.

Keep Your Menu Simple

Offering too many options can confuse callers and cause frustration. Focus on 3–5 clear choices that address your most common inquiries. For example, you might include options for sales, support, or billing.

If you need to offer more options, consider adding a second menu level to keep the first one short and clear. A simple menu helps callers get the information they need faster, improving their overall experience.

Use Clear and Natural Language

Your IVR prompts should feel natural and easy to understand. Avoid robotic language or complicated terms that might confuse callers. Instead, write your prompts the way you’d speak to someone in person.

For example, say “Press 1 if you have questions about your account” rather than “For account-related inquiries, press 1.” Clear and simple language helps callers follow instructions with ease and avoid frustration.

Prioritize the Most Common Requests

Think about the most common reasons people call your business, and place those options at the beginning of your IVR menu. If most callers are asking about your business hours, payments, or appointments, those should be listed first.

This setup creates more efficient service by helping customers get answers faster. It also reduces strain on your call center, since callers can find what they need without waiting on hold or speaking to the wrong department.

Offer an Option to Speak to a Person

Even with a well-designed IVR menu, some callers will prefer to speak with a real person. Offering a “Press 0 for an agent” option provides a quick way for those customers to connect with someone directly.

This is especially helpful if a caller’s request doesn’t match one of your listed options. By giving people this choice, you can improve customer satisfaction and avoid frustrating experiences.

Test Your IVR Regularly

An IVR system that doesn’t work properly can create serious problems for your business. Menu options may become outdated, connections can fail, or prompts might be confusing. Regular testing helps you catch these issues early.

Ask your team members or friends to call your IVR system as if they were customers. Pay attention to how clear the instructions are, whether the system routes calls correctly, and how easy it is to reach a live agent if needed.

Update Your Menu as Needed

Your business may change over time, and your IVR system should reflect that. If your hours change, you add new services, or customers start asking new questions, be sure to update your IVR menu accordingly.

Keeping your system up to date helps you provide accurate information and prevents confusion for your callers. Regular updates also show customers that your business is organized and responsive to their needs.

Recommended reading:

8 Major Benefits of Using Automatic Call Distribution

Best Call Forwarding Service for Business: Top Choices Reviewed

Simplify Managing Customer Calls With Talkroute’s IVR System

Talkroute is an online communications platform that helps businesses of all sizes manage high call volume by automatically greeting and guiding callers to the right team member or department.

Our IVR features let you create simple menu options so callers can quickly connect to sales, support, or any other area of your business without sitting on hold.

This makes the experience easier for customers and keeps your communication organized.

Customizable Menus

Talkroute’s customizable phone menus allow you to create personalized call flows that reflect your business structure. Whether you need options for sales, support, or billing, you can build a professional and organized system that helps callers find the right person quickly.

By offering clear menu choices, you reduce confusion and improve customer satisfaction.

Flexible Routing Options

Talkroute gives you flexible call routing tools to manage incoming calls effectively. You can direct calls to mobile phones, landlines, desktop users, or voicemail boxes based on your business needs.

This flexibility helps ensure calls are answered promptly, whether your team is in the office, working remotely, or balancing different shifts.

Submenus for Added Control

For businesses with multiple departments, locations, or language preferences, Talkroute’s submenu feature provides added convenience. Submenus allow you to organize your call menu with additional layers, giving callers clear options to choose from.

This is especially useful for businesses that need to offer bilingual support, location-based routing, or after-hours instructions.

Automated Messages

Talkroute’s automated message feature allows you to share important information with callers without the need for live staff. You can set up messages that provide details like business hours, company updates, or answers to common questions.

Automated messages reduce the need for your team to answer repetitive inquiries while giving callers access to the information they need.

Dial-By-Name Directories

For businesses with larger teams, Talkroute’s dial-by-name directory makes it easy for callers to reach the right person. Using a telephone keypad, callers can type the name or extension of the person they need.

This feature lets callers use self-service options without waiting on hold or depending on operators. It saves time and helps improve customer satisfaction by quickly connecting them to the right contact.

Smarter call routing is one click away. Try Talkroute’s IVR system free for 7 days!

FAQs About IVR Phone

What is an IVR phone?

IVR (Interactive Voice Response) systems use dual-tone multi-frequency (DTMF) signals so callers can interact with automated menus by pressing phone keys.

Each key press creates a mix of two tones that represent a specific digit. With this technology, callers can move through IVR menus and enter details such as account numbers or order information.

How does an IVR call work?

IVR calls work by letting callers interact with an automated phone system using voice commands or keypad inputs. When someone dials a business number, the IVR plays a recorded menu with options like “Press 1 for sales” or “Press 2 for support.”

The caller chooses an option, and the system either provides automated information or routes the call to the right department or agent.

What is the difference between IVR and VoIP?

IVR is about call automation and guiding callers through menus using DTMF signaling, while VoIP is the technology that carries calls over the internet.

IVR works within VoIP or traditional phone systems, while VoIP itself is the foundation for making and receiving calls without customer premises equipment.

Why is IVR used?

IVR is used to make customer service faster by automating call handling, routing, and giving information without live agents. It can also pull customer data to give more personalized support.

Businesses use it with cloud contact center solutions to cut wait times, manage large call volumes, and improve the caller experience across multiple contact centers.