What Is an Intelligent Virtual Agent & How Does It Work?

March 26, 2024 7 min read

Alex Doan

Alex Doan

what is an intelligent virtual agent (IVA) and how does it work

AI assistants are catapulting how businesses interact with customers, and intelligent virtual agents are at the forefront. This software mimics human conversations to interact with customers and helps businesses scale their teams, resolve customer issues faster, and drive better customer experience.

In this article, we’ll learn more about intelligent virtual agents, explore some of their key features and use cases, and show you how you can also use them to improve your customer experience.

What Is an IVA (Intelligent Virtual Agent)?

An intelligent virtual agent (IVA), also called an intelligent virtual assistant or AI assistant, is a software program that uses artificial intelligence, natural language processing, and machine learning to provide automated and personalized assistance to users. These virtual agents can understand and respond to user requests, perform tasks, and make recommendations, simulating human interactions.

While virtual agents are sometimes confused with chatbots, they’re significantly more advanced and provide a critical level of service for many businesses.

Unlike traditional chatbots, which are limited to pre-programmed responses, IVAs use conversational AI to better understand the context of customer queries and enable more personalized and natural interactions.

IVAs can handle complex questions, examine multiple data sources, and tailor answers to the conversation’s context.

How IVAs Work

Intelligent virtual agents combine various technologies to understand user input, process information, and provide appropriate responses.

When a user interacts with an IVA, the NLP engine parses the query, identifies keywords, and extracts meaning.

This information is then fed into the AI core, which uses its knowledge base and machine learning capabilities to determine the most appropriate response.

The IVA can then deliver helpful answers, complete tasks, or even escalate complex issues to human agents.

How call flows through an IVA
Smart call routing via IVA

An intelligent virtual assistant in action

Scenario: A customer interacts with a banking IVA to check their account balance.

Customer: “Hey, can you tell me my current account balance?”

The IVA processes the user’s input using NLP, recognizes the intent as “check_account_balance,” and identifies the relevant entity as the customer’s account.

It then retrieves the account balance from the banking system and generates a natural language response: “Your current account balance is $1,500.”

The IVA logs this interaction for continuous learning and improvement, and if needed, it can handle follow-up questions or provide personalized assistance by integrating with external systems securely.

Benefits of Using Intelligent Virtual Agents

Adopting IVAs offers businesses a variety of benefits.

Virtual agent benefits

Virtual Agents Use Cases and Examples

Many businesses now use intelligent virtual agents to improve customer service, generate leads, and provide IT support.

Top uses of virtual agents

IVAs can answer frequently asked questions, troubleshoot technical issues, track order status, and even facilitate returns.

When it comes to sales support, IVAs can aid in lead generation, qualify leads, answer product inquiries, offer personalized recommendations, and schedule appointments with sales representatives.

A virtual agent can also easily perform software updates, password resets, and simple IT support troubleshooting tasks. It can collect information and create a ticket for more complex requests, reducing the burden on IT teams.

Here are some specific examples of popular businesses using intelligent virtual agents:

IVAs vs. Other Virtual Assistants

IVAs are part of a broader landscape of AI-powered solutions used in customer service and other business processes. It’s important to understand how it’s different from these key technologies so you can choose the right solution for your business.

Chatbots. Chatbots are relatively simple and typically answer basic questions or provide links to relevant information. They follow pre-programmed rules and cannot understand the context of a conversation.

Virtual agents are more sophisticated at simulating human speech, understanding customer intent, and answering real-time queries. You can also ask follow-up questions and forward chats to human agents if necessary.

A picture showing the difference between a chatbot and an intelligent virtual agent

Voice Assistants. Like IVAs, voice assistants like Siri, Alexa, and Google Assistant use NLP and machine learning to understand and respond to user queries. However, they’re primarily designed for voice responses and are often used for more general-purpose tasks like setting reminders or playing music.

Robotic Process Automation (RPA). RPA uses software “robots” to automate repetitive, rule-based tasks such as data entry or invoice processing. While RPA can help streamline back-office operations, it does not involve the same level of natural language interaction as IVAs.

Knowledge Management Systems. IVAs are often integrated with knowledge management systems that store information about products, services, and common customer issues. By connecting to these systems, IVAs can provide more accurate and up-to-date responses to customer queries.

How To Implement Intelligent Virtual Agents

Creating and implementing an IVA requires careful planning and preparation. Here are some best practices for successful implementation:

While implementing an IVA can be complex and require significant resources, the benefits in terms of improved efficiency, customer satisfaction, and cost savings are substantial.

The Future of Intelligent Virtual Agents

As AI technology continues to advance, IVAs will become even more sophisticated and widely used.

More powerful AI algorithms will enable virtual assistants to carry on natural conversations with even greater fluency and emotional intelligence. This will further blur the lines between human and machine interaction.

Integrated with other technologies like virtual reality (VR), IVAs can create immersive customer experiences. Imagine a virtual assistant guiding you through a product demonstration in a VR showroom.

While IVAs will handle routine tasks, human agents will continue to play a crucial role in dealing with complex issues and building genuine customer relationships.

Getting an Intelligent Virtual Agent for Your Call Center

Traditional IVA implementation can be a tangled mess of business needs, customer preferences, system integrations, and scalability concerns.

Nextiva cuts through the complexity with a comprehensive and innovative solution.

Our advanced IVR powered by conversational AI seamlessly integrates with our contact center software. This powerful combination helps you offer personalized service, maintain constant customer contact, and automatically optimize agent scheduling based on fluctuating call volume patterns.

But Nextiva’s support goes beyond the technology. Our dedicated team helps you find the perfect IVA configuration, tailored to your unique business needs.

Don’t let the challenges deter you. By prioritizing your needs, aligning with customer preferences, and ensuring smooth integration, you can unlock the benefits of IVAs.

Remember, it’s a strategic decision. Invest wisely and reap the rewards of improved service, efficiency, and growth.

Ready to give Nextiva a try?

Talk with an expert to unlock more business growth with IVAs.

Alex Doan


Alex Doan

Alex Doan is an experienced senior marketing professional specializing in propelling growth for both B2B and B2C companies. Proficient in streamlining marketing operations for seamless sales transitions, utilizing analytics and consumer insights to achieve measurable outcomes. Committed to enhancing lead and customer experiences through effective journey mapping.

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