IVR Pricing Is Erratic, But it Can Work in Your Favor

Phone systems have changed a lot, but IVR pricing is still all over the map. For example:

• Software systems that include IVR can go for as low as $60 per user per month.
• Some standalone hardware IVR systems cost well over $50,000 just for the initial purchase.

It makes sense, though, because businesses need widely different capabilities out of their Interactive Voice Response (IVR) — routing calls, taking payments, allowing customers to access their account. And once you need all of this to work seamlessly across multiple locations, the complexity goes up exponentially.

In this post, we’ll cover what different types of systems cost, what they can do, and what you should be thinking about as you price out IVR systems for your organization.

IVR pricing at a glance

We’ll cover where all these prices come from in detail, but here’s the 10,000 view of what different types of IVR systems cost:

• Ultra-customizable, on-premises hardware IVRs can cost upwards of $50,000 for the initial setup.
• Off-premises, cloud-based IVRs cost anywhere from $0-$1,000 for the initial setup, and $25-$100 (or more) per month.
• Broader call center software that comes with IVR costs anywhere from $60-$100 per agent per month for a basic plan and $100-$200 per agent per month for a premium plan.
• Communications Platform as a Service (CPaaS) software that includes IVR costs $15-$50 per user per month, with additional charges on a per-use basis.

What drives IVR pricing higher?

Size, complexity, and volume are the three obvious cost drivers for any IVR system.

I’m not going to belabor these points, but they are true enough. A simple IVR at a single location business with low call volume is going to be so much cheaper than a conversational IVR servicing multiple busy call centers.

This is all fairly common sense, but you would be shocked to know how many people go out to price out IVR software without first scoping out important details like:

• Which teams are going to need access to the IVR?
• What technology has to be integrated with the IVR?
• What do callers need to be able to accomplish?
• How many total calls will the IVR handle in an average week?

The worst mistake you can make with regards to buying an IVR system is to have to request additional features at the last minute.

Early on in the search for the best IVR system, you can rule out systems that don’t integrate with your CRM, cause problems with firewalls, and so on. It gets a lot more expensive to make these changes later in the buying process.

Here are some additional IVR cost-drivers that should be on your radar:

• On-premises vs. cloud IVR: On-prem hardware systems require a large initial outlay to get set up and ongoing maintenance. The promise is that you will pay less by managing your own system, but that means you are on the hook for keeping the IVR updated, patched, and adding functionality as your business scales. Cloud IVR systems are much cheaper to set up, and you don’t need to hire any in-house support. You’ll be charged on a monthly basis and won’t have to worry about buying or maintaining any physical equipment for the IVR itself.
• Multi-level menus: For large, complex businesses, the increased costs that come with multi-level menu capabilities are unavoidable. In order for an IVR to be effective at a help center with various departments, it needs to give callers options within options within options so that they can do their own navigating without getting lost.
• Natural language processing (NLP): Conversational IVRs use AI to “listen” to a user’s questions and respond the way a real human would. Through this natural language processing technology, callers can have full conversations with the IVR. This technology is getting a lot better, with AI-agents handling calls that used to take a live agent. While AI/NLP agents can help you lower staffing costs, these capabilities are expensive compared to a simple touch-tone IVR.
• Payment processing: Adding an IVR payment option is a great way to offer customers 24/7 self-service — plus it takes the strain off your agents who would otherwise have to stay on the call and manually input credit card numbers. Hooking your IVR up to a payment system comes with additional costs, security concerns, and compliance responsibilities. Among other things, these IVR systems require an integration with a payment processor and need to be PCI DSS compliant for transaction security—both of which can drive up costs.

This is hardly an exhaustive list. The more you can know about what your system needs to do, the more accurate IVR pricing information vendors are going to be able to give you.

Standalone IVR pricing

A standalone IVR is an independent IVR system that can be implemented to work within your business’s existing phone system. This type of IVR does not come as part of a broader phone solution, as it’s usually marketed and sold individually.

On-premises standalone IVRs

On-premises IVRs are physical systems that are installed somewhere on your business’s property in order to provide a private IVR service. They are highly reliable and almost never overloaded by call volumes, seeing as the system is never shared with anyone else.

On-premises IVR systems make the most sense for large businesses that have:

• Very high call volume requirements.
• Complex routing needs.
• Top-tier security protocols.

Since an on-premises IVR is installed locally, your tech team (or a managed service provider) needs to monitor the system and perform its upgrades. This typically means that on-premises IVR systems are not ideal for small businesses.

For large businesses, an on-premises IVR gives them virtually limitless scaling and customization potential as long as they have the real estate. In any case, the cost ranges for on-premises IVRs aren’t so straightforward due to these factors — but here are some conservative numbers to give you an idea:

• Hardware: $10,000-$30,000.
• Customization and development: $5,000-$50,000 or more.
• Software licensing (in some cases): $5,000 or more.

Keep in mind that these are only initial setup costs. You’ll also be dealing with ongoing expenses like regular maintenance and salaries for additional IT personnel.

Clearly, you should only invest in an on-premises standalone IVR system if you’ll actually make full use of the customization potential, call volume capacity, and security capabilities.

Standalone cloud IVR system

Standalone cloud IVRs are often referred to as managed IVRs. This terminology can be confusing, since these IVR systems still use hardware — it’s just located off-premises. The IVR system accesses the hardware via servers that are hosted in the cloud.

Cloud IVR systems dramatically reduce the upfront investment in an IVR solution, and are ideal for small businesses that:

• Have limited property space.
• Use internet-based phone technology like VoIP.
• May need to prepare for rapid scaling.

Since cloud IVRs are inherently less customizable than on-premises IVRs, cost ranges don’t vary quite so wildly. Here’s what you should expect:

• Initial setup: $0-$1,000 or more.
• Monthly fees: $25-$100 or more per month.
• Per-minute calling fees (in some cases): $0.005-$1.

It’s important to note that if you’re using a standalone IVR system, you’ll still incur a few extra expenses — even if it’s a lean, cloud solution. For instance, you may have to pay for employee training, buy a separate auto dialer for outbound IVR calling, or hire technicians to integrate the IVR system with your existing communication applications in the first place.

Call center software IVR pricing

A common route taken by many cutting-edge businesses in 2024 is to use an IVR that comes as part of a larger call center software solution. Providers like Nextiva and RingCentral are prime examples of this. Essentially, the IVR system is just one of many advanced calling features that you can use and scale up.

These broader call center solutions that include IVR are ideal for businesses that:

• Have limited budgets and want to save by bundling services.
• Already make calls over the internet, using SIP or VoIP.
• Have a call center headcount that fluctuates.
• Want to boost agent productivity with a seamless communications platform.

Even though call center software IVR works well for small and medium-sized businesses, enterprises are beginning to use it as well due to the cost and time savings.

An entry-level call center software costs anywhere from $60-$100 per agent per month and usually includes features like:

• Basic IVR.
• Multi-channel inbox.
• Ticketing system.
• Automated analytics.
• Agent profile management.

Remember, basic call center software doesn’t always include IVR, so make sure you double-check this before scheduling a demo with a provider.

On average, a premium call center subscription costs between $100 and $200 per agent per month, and usually has features like:

• Conversational IVR that uses natural language processing.
• Service-level agreements.
• Automated, real-time analytics.
• Enterprise-level quality management controls.
• Gamification for increasing agent efficiency.
• Cutting-edge AI call center features.

Keep in mind that once prices get into the $150-$200 range, most providers shift to fully customized pricing. This can actually help large businesses save more money, as they’ll only be paying for the services they actually use.

CPaaS IVR pricing

CPaaS stands for Communications Platform as a Service, and it’s a type of software designed to help businesses add real-time communication features to their own existing applications, without needing to write extensive back-end code.

CPaaS software that includes IVR is usually pretty unique, with notable features like:

• Voice APIs: An Application Programming Interface (API) allows developers to create custom IVR systems. You can script your ideal call flow, greetings, menu options, and routing decisions.
• Developer integration: CPaaS software allows you to integrate voice and text-based IVR directly within your own business applications — like a CRM, ERP, or sales engagement platform — creating a more seamless experience for customers.
• Voice biometrics: Certain CPaaS IVR systems can recognize different caller voices and grant or deny access to confidential information accordingly.

CPaaS IVR is ideal for businesses that need the customization potential of on-premises IVR but can’t afford such a hefty upfront investment.

Most CPaaS vendors charge for monthly subscriptions and pay-as-you-go usage. Monthly fees range from $15-$50 per user per month, with additional costs for each phone number used, each minute of call-time, and each advanced feature used.

Recap

IVR pricing is all over the map — and that isn’t necessarily a bad thing. In fact, the huge range of IVR costs tends to mean more options to choose from.

By understanding the differences between each IVR system type, its costs, and its unique pricing structures, you can choose the setup that makes the most financial and operational sense for your business.