AI Phone Answering System – Everything You Need to Know

Artificial Intelligence (AI) has already significantly transformed the way businesses interact with their customers and prospects across channels. AI phone answering systems and AI-powered chatbots can now handle inbound voice and digital communications automatically, engaging with users in human-like conversations. 

These solutions can answer the most common questions, provide contextually relevant information, and help customers resolve issues – all without having to interact with your human reps. And not only does it allow you to automate your customer service operations – but it can improve the experience for both your customers and your service team. In this article, we’ll take a closer look at how AI phone answering systems work and what particular benefits they can bring to your business.

What Exactly is an AI Phone Answering System?

An AI phone answering system (otherwise known as an AI call answering system, an AI virtual receptionist, or simply an AI receptionist) is an AI-powered software solution that can answer your inbound calls and have human-like conversations with your customers or prospects. Going far beyond traditional auto attendants and IVR (Interactive Voice Response) systems, AI phone answering solutions can truly have meaningful conversations with your users, just like your human reps would. The system can recognize human speech, interpret user intent, answer questions, give accurate responses, and seamlessly route callers to the right agents (if available).

How Does an AI Phone Answering System Work?

Similarly to an AI voice bot, an AI phone answering system uses an array of technologies that enable it to have natural dialogues with users. More specifically, key technologies behind AI phone answering systems include:

• Automatic Speech Recognition (ASR): Automatic Speech Recognition converts spoken human speech into written text, allowing the AI phone answering system to understand what a caller is saying.

• Natural Language Processing (NLP): Once speech is converted into text, NLP helps the system to understand the meaning and intent of the caller by analyzing keywords and context. For example, NLP helps distinguish between ‘I want to book an appointment’ and ‘I want to cancel my appointment’.

• Conversational AI: Thanks to conversational AI, the system can have back-and-forth dialogue with callers while being able to ask clarifying questions, provide accurate and relevant information, and maintain context throughout the conversation, often making callers feel like they are interacting with a human rep.

• Machine Learning (ML): Machine Learning ensures that the system can learn from past interactions and feedback you feed it to provide even more accurate, relevant, and efficient responses over time. This adaptability means your callers will be served better as the system evolves, helping you improve user satisfaction.

• Integration capabilities: AI phone answering systems can be integrated with CRM platforms, databases, calendar software, and other back-end systems, which allows them to access and update customer information in real time. Integration capabilities also enable these solutions to deliver personalized responses and perform certain actions (like booking appointments). 

An AI Phone Answering System vs. Interactive Voice Response (IVR)

Think of the difference between talking to an automated phone menu system versus having a conversation with an intelligent, knowledgeable digital phone concierge who can actually understand what you’re saying and respond appropriately. That’s exactly how AI phone answering solutions and Interactive Voice Response (IVR) systems differ, which also means that AI call answering tools are much more advanced and intelligent. 

An Interactive Voice Response software system uses rule-based logic and interacts with callers through pre-recorded messages (Press 1 for sales, press 2 for customer support,…). It requires users to navigate through a phone menu using keypad inputs or voice responses to get the information they need or be connected to a human representative. IVR systems are designed to handle simple queries, route calls, and ensure inbound callers always reach the right destination.

AI phone answering systems are much more advanced and complicated. These solutions are built to understand context, respond to free-form conversations, and handle more complex queries. On top of that, they can learn and improve over time by analyzing past customer interactions. And that ultimately means they are much more efficient in handling customer service interactions – and they deliver a better user experience.

Here are the key differences between IVR and AI phone answering systems summarized:

Benefits and Limitations of Using an AI Phone Answering System

Benefits of implementing AI phone answering systems

• 24/7 customer support availability: According to data from Salesforce, 83% of customers expect to interact with someone immediately when they contact a brand. With an AI phone answering system, you can deliver customer support around the clock, even when your human reps aren’t available, without ever putting any caller on hold.

• Multilingual customer support: Some of the most advanced AI phone answering systems include multilingual capabilities, allowing them to respond in different languages. That means if your business operates in multiple locations, you can easily support your customers in their preferred language.

• Improved customer experience: Unlike interacting with self-service IVR menus, your users can get a much better experience with an AI call answering system as it can understand and respond to free-form conversations and deliver highly personalized responses based on customer data it pulls from the integrated back-end systems. 

• Reduced load on your support team: By automatically answering FAQs and resolving customers’ requests with an AI phone answering system, you can significantly reduce the number of voice interactions that need to be handled by your support team, ease the load on your reps, and free them up for more value-added tasks.

• Inbound lead capture and qualification: In addition to answering common questions, providing information, and helping callers resolve issues, you can use an AI phone answering service to automatically capture and qualify your inbound leads, ensuring that no opportunity is ever lost regardless of when prospects call you.

• Better scalability and cost efficiency: Implementing an AI call answering solution enables you to scale your customer support operations in a cost-effective way. While a single human rep can handle only one call at a time, an AI phone answering system can handle hundreds of simultaneous calls, so you don’t have to hire additional agents when your call volumes increase.

Limitations of AI-based phone answering systems

• Inability to solve complex issues: While AI phone answering systems excel at answering common questions and handling simple queries, they can struggle when it comes to resolving complex requests. That’s why when implementing an AI phone answering system, it’s essential to enable a seamless escalation of complex issues to a human rep.

• Lack of emotional intelligence and empathy: Despite the latest advancements in generative AI and machine learning, even the best AI phone answering system would still lack emotional intelligence. These tools aren’t able to deliver a truly empathetic experience in a way a human agent would, especially in sensitive situations that require tact and compassion.

• Negative customer perceptions: Some people (particularly those from older demographics) just aren’t comfortable interacting with AI systems and would always prefer human interaction. According to Callvu’s report, for example, 80% of consumers said they would wait to speak with a live human rep for at least a few minutes versus engaging with AI immediately.

Common Use Cases for an AI Phone Answering System Across Industries

✓ Healthcare

In healthcare, AI phone answering systems can be implemented to automate the process of booking, rescheduling, or canceling appointments, handling prescription refill requests, insurance verification, and basic inquiries like directing patients to appropriate healthcare providers. Automating these interactions helps reduce the load on healthcare staff.

✓ Banking and financial services

From helping customers find the nearest branch or ATM, providing basic investment information, and assisting with account balance inquiries to transaction verification and bill payment processing – AI phone answering systems can handle a variety of requests for businesses and organizations offering financial services. 

✓ Retail and e-commerce

Statistically, WISMO (Where is my order?) calls can account for up to 35% of customer support interactions for retail and e-commerce businesses. AI phone answering systems can help customers track their order statuses, saving a great deal of time and effort for your reps. What’s more, these systems can provide basic product information, check product availability, help with delivery rescheduling, and even initiate product returns. 

✓ Travel and hospitality

AI phone answering systems can be incredibly helpful for businesses in the travel and hospitality industry. For example, they can assist callers with hotel reservations, modifications, and cancellations, provide check-in/ check-out details or other information, help with room service orders or tour bookings, etc. 

✓ Restaurants 

Restaurants are also an excellent example of businesses that can benefit from implementing AI phone answering solutions. For example, an AI phone answering system for restaurants can help callers easily book and modify reservations without involving your staff and provide information about your menu, operating hours, special offers, or parking availability. 

✓ Real estate

Real estate businesses can leverage AI phone answering systems in a number of ways. These tools can handle property information requests and help callers schedule property viewings or book consultations with real estate agents. They can also automatically handle maintenance requests from tenants. Additionally, AI call answering systems can help with lead qualification by engaging with potential buyers and collecting essential information for agents to follow up.

If you’re looking to implement an AI phone answering system at your business, book a demo call now to learn more about VoiceSpin’s AI-powered contact center solutions and how they can help you automate customer support operations, streamline lead generation, and improve sales.