A relatively new technology, Voice over IP (VoIP) phone systems route phone calls the internet instead of through a landline. Although slow internet speeds have traditionally made landline systems more favorable, modern broadband connections give VoIP a number of advantages, including:
- Lower Costs: VoIP phone systems can save you up to $1,200 per phone line over 2 years.
- Better Features, including auto-attendants, call transferring, on-hold music, voicemail delivered to your email inbox and more.
- Less Maintenance since you aren’t relying on a physical phone line.
- Similar Call Quality assuming you have a high-speed internet connection. (Try our test.)
What is a VoIP Small Business Phone System?
VoIP, which stands for Voice Over Internet Protocol, simply means using the internet to make a phone call. If you’ve ever used Skype or Google Voice, you’ve used VoIP – albeit, a very simple VoIP service.
For businesses, there’s companies out there like Nextiva and Phone.com that give you much more advanced VoIP service. Along with providing handsets that give you features like call waiting and call transferring, you get an online dashboard where you can setup an auto-attendant, call queueing, virtual faxing, voicemails delivered to your email inbox and more. Tell me more about these features.
VoIP vs. Traditional Landline: Cost
One of the biggest advantages of switching to VoIP is the cost of service. Traditional landlines tend to be much more expensive, in part because of the need to install and maintain phone lines. Fit Small Business compared the cost of Nextiva (a VoIP provider) to Verizon (a Landline provider) and found Nextiva charged half as much for the same service.
This is not even including the additional cost of setup & installation, which for a landline, can be a few hundred dollars per phone. Also, many business features like Call Waiting, Caller ID and Call Forwarding cost an extra sum per month, which further boosts the price of a landline.
VoIP vs. Traditional Landline: Features
Because VoIP systems don’t rely on physical hardware, they can offer many more features for a fraction of the price. For example, an auto attendant is a pre-recorded message that welcomes callers and directs them to a department (“press 1 for customer service, press 2 for sales,” etc.) With a landline, you’d need to buy a PBX box or a 4-line phone system to get this feature. With VoIP systems, however, all you need to do is log into your account and you can set up the auto attendant online.
Here’s some of the other features you get with VoIP:
- Call Transferring
- Automatic Call Forwarding (i.e. to a cell phone or landline)
- Music on Hold
- Conference Calling
- Integration with Business Software (like a CRM or HelpDesk)
- Voicemail (which can be automatically forwarded to your email inbox as an audio file or transcribed to text)
VoIP vs. Traditional Landline: Scalability
Prior to VoIP, a common phone solution for small businesses was a 4-line Phone System. They looked like over-sized desksets that could hook up to 4 phone lines at once. You could also link them to other desksets so that employees can transfers calls between themselves.
Aside from the limited features, 4-line phone systems had a key disadvantage: what happens when 4 people are speaking/on hold and a 5th caller joins the line? Well, their call would never make it to your office.
With VoIP, you can support an unlimited number of calls regardless of the number of physical phones. Not to mention if you hire a new employee it’s very easy to add them to your roster. With a 4-line phone system, you may need to replace all your hardware.
VoIP vs. Traditional Landline: Call Quality
So the advantages of VoIP are clear. To make things fair, however, we’ll address the one disadvantage that has traditionally kept landline systems afloat: call quality.
Traditionally, slow internet speeds meant that VoIP systems could not broadcast in high quality. This and other issues like latency and the fact that internet connections (and electrical lines) were prone to outages prevented many businesses from adopting VoIP.
Today, however, thanks to faster and more reliable broadband internet connections, VoIP calls can go out uncompressed. This makes them comparable to, if not better than, landline call quality. Latency is also much less of an issue, with most internet connections falling well under the noticeable range. Outages can still occur in some areas, however, most VoIP services can forward calls to a cellphone in the event of an internet or power outage.