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101 Guide to Intelligent Virtual Agents

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Customers need digital support around the clock. Businesses can turn to intelligent and automated solutions to support today’s demands, with significant growth in the development of artificial intelligence (AI) by 2030. Modern technologies, such as intelligent virtual agents, help companies deliver a positive customer experience.

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

An intelligent virtual agent (IVA) is an AI-enabled communication tool that generates personalized responses to users. IVAs are intuitive and can understand natural-language requests through natural language understanding (NLU) or natural language processing (NLP). NLU and NLP are learning algorithms that try to identify and grasp various patterns and make decisions or predictions independently, relying on collected data and sometimes human input.

Gif: A person sends text messages to a bot, and the bot responds. Messages pop up above a smartphone to show what is said between the customer and intelligent virtual assistant.

Common Types of Virtual Agents

Many customer service managers ask for some type of AI solution, but understanding the differences between intelligent virtual agents and other solutions such as chatbots, voicebots, and intelligent voice response (IVR) software is an important first step. Outlined below are some key differences to paint a clearer picture.


A chatbot is any program that can communicate with a user automatically without help from an agent. They can interact via voice or text. Simple chatbots have limited capabilities. They are rule-based and task-specific. A simple chatbot poses questions based on predetermined options. The customer can choose from the options until they get answers to their query. The chatbot will not make any inferences from previous interactions with customers. These chatbots are best suited for straightforward dialogues such as inquiring about a business’ operating hours.

  AI Chatbot

AI chatbots simulate near-human interactions with customers. These advanced chatbots can have free-flowing conversations and interpret intent, language, and sentiment. These chatbots require programming and robust data to help it realize the context of interactions. 


Textbots are simple or AI chatbots that emulate human interaction via text inputs. Common simple textbots are programmed to analyze the input and follow scripted prompts to automate actions for the user. The most common example is a “live” support chat that helps automate first response for support requests, recording critical information and providing instructions matching the detected case. 


Briefly mentioned above, IVR software is an automated phone system technology that interacts with callers and gathers information based on how the caller navigates a call menu. It does not use AI. Callers navigate menu options through spoken responses or by pressing numbers on their phone. IVR software routes the caller to specific departments or specialists. Some may consider an IVR to be a simple voicebot.


When discussing voicebots, people usually refer to an AI-powered chatbot tool that uses IVR software. A caller can speak to the bot, communicating via verbal language. AI identifies key aspects or markers in the caller’s speech and responds with audio in near-human form.


An intelligent virtual agent is an AI-enabled communication tool that generates personalized responses to users. They are usually used to communicate via speech but also work in text channels. IVAs process natural language requests using NLU or NLP and understand situational context, allowing them to handle a more complex range of questions and interactions. IVAs also more closely resemble human speech and can understand queries with spelling and grammatical errors, slang, or other potentially confusing language, much like an agent. IVAs are technically chatbots, but they are so advanced that people distinguish the two in general conversation.

IVA Benefits for Your Contact Center and Customers

IVAs are a powerful resource for contact centers to improve customer experience. Contact centers act as the front door for businesses because they support large numbers of customers that need answers to similar types of questions or solutions to problems.

IVAs manage demand in ways almost indistinguishable from an interaction with a human agent, which creates significant benefits for both your contact center and your customers.

Benefits for Contact Centers

  • More Task Automation: Automated IVAs answer basic inquiries to reduce wait times for customers and free up human agents to manage more complex service needs. An IVA can ask the customer what they need help with when they call the contact center. Then, the IVA can use NLP to respond to open-ended prompts. With NLP, the IVA can recognize keywords and phrases to move the customer along on their journey. 
  • Better Data Management: The IVA can also track and report data about the customer during the conversation. For example, suppose a call needs to be transferred to a human agent. In that case, the IVA can share contextual information from the interaction, which improves service and the customer’s experience by not having to repeat themselves.
  • Lower Average Call Cost: Not all call minutes cost the same. A minute handled by a person is far more expensive than a minute handled by a machine. Since IVAs are able to complete tasks that traditionally required agents, on-call minutes become much cheaper. IVAs not only lower average call cost, it also allows agents to focus on the most complex issues, which is more satisfying.
  • Improved Retention: All these factors create a better experience for customers as well. Experience is at least as important as price or product for modern customers, so positive experiences increase retention and net promoter scores.


Benefits for Customers

  • Personalized Customer Experience: Today’s customers demand customized services. Customers don’t want to navigate lengthy phone trees or interact with a bot that delivers limited support. IVAs can gather data, predict customer needs, learn about customer behavior, make simple transactions, understand requests and perform complex tasks, all while offering a humanlike experience for customers to  reach a resolution quickly. 
  • Opportunity for Self-Service: Self-service has grown in popularity, as digitally savvy customers prefer to resolve issues themselves before seeking assistance from support representatives. For example, 73% of customers prefer to solve problems themselves instead of requesting the support of an agent. IVAs manage common challenges customers face without a live agent, which allows for self-service. Granting customers the ability to serve themselves strengthens the customer journey and minimizes costs.
  • 24/7 Availability: More than half of today’s customers expect 24/7 customer service to be available to them. Customers can get support whenever they need it because IVAs are not confined to the 9-5 workday.
  • Higher Satisfaction: By providing answering every call immediately and providing contextual service, IVAs reduce customer wait time and increase first-touch resolution, two of the most important KPIs in customer service. When these factors improve, customers feel more content.


Graphic depicting pie charts and a line graph on a computer screen, representing customer analytics from intelligent virtual assistants

Mosaicx IVA

Mosaicx, an AI-powered customer service platform, lets you create intelligent virtual agents that efficiently and accurately solve customer inquiries by automatically moving a customer to the “next best action” to resolve their query. We continue to innovate Mosaicx to stay on the cutting edge of modern AI, ML, and predictive intent technologies. As such, our customers receive the latest IVA capabilities. Our solution is flexible, easy to use, cost-effective and secure.

Businesses that want to evolve their communications and improve customer experience can benefit significantly from IVAs. As they do, they will keep pace with modern workplace landscapes, stay competitive, increase brand loyalty, and shore up revenue.