Voice-over-Internet-Protocol (VoIP) technology makes calls using an internet connection instead of a regular phone. Advantages of VoIP systems include robust calling features, greater scalability and portability, and potentially significant cost savings. However, there are disadvantages when using a VoIP system, such as power and internet dependency, sometimes resulting in inconsistent call quality.
Companies find that VoIP solutions like Nextiva, which ranks top on our list of best VoIP providers for small businesses, often beat landline services on both advanced call management solutions and affordable pricing. To learn more about Nextiva or to try a free demo, visit Nextiva’s website today.
What Is a VoIP Business Phone Service?
VoIP technology works by converting a voice signal into digital data that is transmitted over an internet connection instead of copper wires supplied by your local phone company. An advantage of VoIP phone service is that calls can be made to any phone number including mobile devices, local, and long-distance numbers. However, VoIP’s disadvantage is its dependence on electricity and a stable internet connection.
VoIP phone services have a lot to offer businesses that want to invest in the latest phone technology. However, it’s not a catch-all solution that’s right for every company or entrepreneur. That’s why it’s important to understand VoIP advantages and disadvantages before spending money on VoIP headsets and analog telephone adapters or committing to a VoIP contract.
Advantages of VoIP
Traditional analog phones are technologically limited in the types of features they offer and are typically limited to options like call forwarding and caller ID. In contrast, VoIP business phone services offer more features, scalability, and customization options than landline phones.
An automated attendant answers callers and quickly routes them to the right extension or department, increasing the likelihood of a favorable customer experience. Basic automated attendants offer simplified features like pre-recorded messages and a small library of hold music options. Businesses considering VoIP advantages and disadvantages often find auto attendants to be one of the most compelling features of VoIP service.
Multilevel auto-attendants found with VoIP providers like Nextiva include more complex VoIP features like personalized auto-attendant greetings and the ability to route calls to multiple phone numbers. Some multilevel auto-attendants also include professionally recorded greetings and an option to create schedules that route calls to an after-hours menu on weekends and holidays.
Call analytics provide important data and metrics on inbound and outbound calls. Some VoIP systems capture basic information like time, length, and duration of the call. Advanced analytics provide details like hold time, length of time in queue, how often a call was transferred, and per-minute cost of calls.
Business owners can use the metrics collected by a VoIP provider’s call analytics feature to predict slow and busy times and adjust staffing accordingly. They can also be used to monitor team and individual performance to learn where improvements or adjustments can be made.
CRM & Business App Integrations
VoIP phone systems with customer relationship management (CRM) integration allow sales teams to unify customer call data in a single location rather than across multiple systems. Many providers offer integration tools for platforms like Salesforce, HubSpot, Pipedrive, and Freshsales.
Many VoIP systems also include integration with business tools like support ticket systems, chat, and email to keep teams connected as well as auto dialers that automate the dialing process. To learn about the advantages and disadvantages of highly rated VoIP auto dialer software, check out our article on the best auto dialers for small business.
Phone Number Porting
Most established businesses don’t want to give up their phone numbers when moving to a new phone system provider. Doing so risks losing customers and can be expensive to update websites and marketing materials. Furthermore, workers in hotdesking environments rely on their fixed phone number to follow them wherever they may be.
Many VoIP solutions port existing business phone numbers as part of their service plans or for a small additional fee. However, the disadvantage of VoIP number porting is that the process can take anywhere from a couple of days to several weeks, depending on how long it takes the first provider to release the number.
Free Local & International Calling
Free unlimited domestic calling is a common feature offered by most of the larger VoIP providers. Some offer unlimited international calling to groups of countries as well, with more groups available at higher pricing tiers. Most providers offer pay-as-you-go international calling rates for businesses that don’t make a lot of international calls.
When choosing a VoIP phone service provider, it’s important to review your calling habits and patterns to determine if the advantages of VoIP service with international calling make it right for you. Companies that prefer to pay by the minute will want to shop around to find the lowest international calling rates.
Call recording is a VoIP feature that allows business owners to record calls for training and quality assurance purposes. Depending on the business phone system provider and service plan, calls may be recorded companywide, or only for specific numbers or extensions. When making your VoIP advantages and disadvantages list, this is a VoIP feature landlines can’t replicate.
Nextiva’s call recording feature includes a number of settings that determine how and when calls are recorded, such as on-demand, always, never, and on-demand with a user-initiated start. As an advantage, this VoIP call recording feature can also be programmed to alert callers when a call is being recorded via pre-recorded voice message or intermittent warning tone.
Free Local, Toll-free & Vanity Phone Numbers
Many VoIP phone systems include a free local phone number with new accounts and some also include a free toll-free phone number. It’s common to offer only one free number, but customers can usually purchase more for an additional fee.
A few VoIP providers also offer the advantage of a VoIP vanity phone number with their service plans or as an add-on option. Vanity phone numbers are customizable business phone numbers, like 1-800-FLOWERS, that are easy for customers to remember.
Cost Savings & Scalability
All businesses need phone service, and the costs of landlines can add up quickly. Some VoIP business phone system providers offer free plans for a limited number of users or with a no-frills service tier. In addition, Auto attendants greet callers with automated messages and route calls based on keypad or voice prompts, replacing the need for a human switchboard receptionist to answer calls.
Finally, VoIP can grow with you. It’s easy to add users to a VoIP service plan to keep up with your growing business, either through your account’s dashboard or by upgrading to a new service plan without interrupting existing service.
Disadvantages of VoIP
When comparing VoIP advantages and disadvantages over landline telephones, there are some downsides to consider. Such as the fact that businesses may need to buy new hardware like VoIP phones or VoIP adapters to connect analog phones to the system. Therefore, you’ll need to compare the pros and cons of VoIP carefully when deciding if it’s the right solution for your business.
Worms, Viruses & DDoS Vulnerability
Since VoIP phone systems are connected to the internet, they are vulnerable to worms, viruses, and distributed denial of service (DDoS) attacks. This disadvantage of VoIP can create havoc with a VoIP phone system, ranging from a decrease in call quality to complete disruption of service. Fortunately, most VoIP providers build firewalls and other robust security features into their systems to protect customers and their accounts.
VoIP services require a stable power source to provide service. Corded landlines continue to work during a power outage but the VoIP phones and Wi-Fi connections facilitating your VoIP calls won’t. This is a serious disadvantage of VoIP to keep in mind if your business is located in an area prone to power failures.
Since VoIP phone service is internet-based, a reliable and fast internet connection is critical for supporting high-quality calls. For instance, a stable internet connection with a 10 Mbps upload speed can comfortably handle at least 20 VoIP phone lines. However, a number of factors impact how many phones your bandwidth can support, so we’ve put together a guide on how to test your VoIP speed and understand what the numbers mean for you.
You’ll also need to run latency and packet loss tests to learn to how well VoIP phone service will work for you. Latency, or how fast data travels from one point to another over your internet connection, contributes to how much delay you experience during VoIP calls. Packet loss, a reduction in data flowing back and forth across the internet during calls, can result in sound distortion and poor call quality.
Ultimately, the quality of your service depends on the quality of your network. If your internet connection quality degrades, your call quality will as well. In addition, if your company is located in an area where internet service is consistently unreliable, your VoIP experience won’t be good.
Unlike traditional landline phones, which rely on infrastructure owned and operated by one or two providers in a geographic area, VoIP offers businesses more choice when it comes to their provider. This means that businesses can shop around to find a solution that offers the most amount of value for their specific needs.
Some of the best VoIP providers include Nextiva, Vonage, and 8×8.
Nextiva ranks as our best business phone system and best VoIP provider. Nextiva advantages include its superior customer service and turnkey phone system with enough features to meet the needs of most small businesses. However, Nextiva’s disadvantage is that it doesn’t offer unlimited international calling to select countries like other VoIP providers.
Pricing runs from $19.95 to $27.95 per user, per month. All plans include unlimited domestic calling, free phone numbers, an auto attendant, and free phone number porting. Upper tiers add Nextiva’s mobile app with team collaboration tools, a conference bridge for calls with up to nine participants, and call recording. Nextiva customers consistently praise the reliable customer support team and excellent call quality.
Vonage is a VoIP phone solution for companies that want a basic set of features and an a la carte menu of choices to customize the right system for their needs. Vonage’s advantages for sales teams and call centers is its CRM integration with G Suite, Office 365, and Salesforce, as well as service plans that scale as business needs change. However, the comparatively higher cost of Vonage’s upper tiers may be a disadvantage for some companies.
Vonage service plan pricing ranges from $19.99 to $39.99 per user per month and includes unlimited calling, a mobile app, and a virtual receptionist. Upper-level plans add on-demand call recording, visual voicemail, and video conferencing with up to 100 people. Vonage users say mobile and desktop apps are very easy to use and report the voicemail-to-email feature is extremely convenient.
8×8 is a business phone system for companies that make and receive a lot of international calls and don’t want to be surprised by large pay-per-minute phone bills. The 8×8 advantage lies in its unlimited international calling plans that support up to 47 countries. Its primary disadvantage is the relatively high service plan prices, but businesses that make a lot of international calls may prefer an unlimited global calling plan with fixed costs.
8×8’s price plans range from $28 to $115 per user per month and include unlimited domestic calling and calls to up to 47 countries, depending on the plan chosen. Higher-level tiers call recording, and an auto-attendant as well as quality management analytics and other reporting features to track agent and company performance. Customers are happy with the company’s robust set of features. However, there are reported complaints about unreliable call quality.
Alternatives to VoIP
If you’ve weighed VoIP advantages and disadvantages, you may have determined it’s not the best solution for your business right now. If this is the case, then a multiline analog landline phone system is your best alternative to VoIP. The advantage is that employees in small offices can each have their own phone line and extension. However, the disadvantages of this option include limitations on the number of inbound calls and a higher overall cost.
Frequently Asked Questions (FAQs)
What kind of VoIP business phone hardware might I need?
In most cases, VoIP phone equipment can accommodate standard business phone system features. However, some situations, like video conferencing, may require phones that accommodate specific features.
- Desktop phones: Desktop VoIP phones cost anywhere from $30 for no-frills handsets to $800 for a higher-end model with features like video calling screens, call recording, and business tool integration
- Call center phones: Conference center VoIP phones range from $50 for budget phones to as high as $600 for phones CRM integration and built-in tools for video-conferencing
- Conference center phones: Conference center phone pricing runs from $250 for basic models to $800 for phones that support features like a touchscreen interface and meeting participant tools like mute, block, and eject
- VoIP adapters: Most VoIP systems can be connected to your existing analog phones with a VoIP adapter; adapters cost anywhere from around $30 for a device that supports one or two phone lines to about $125 for an adapter that can handle eight lines at a time
How much will I save by switching to a VoIP business phone?
It’s difficult to give an exact amount given the variables of each service, VoIP advantages and disadvantages specific to each provider, and the unique needs of each business. However, a VoIP system offers the newest technology and business phone features without the responsibility and expense of managing and maintaining a phone system on your own.
VoIP phone systems are a cost-effective, feature-rich alternative to traditional business landline phones. VoIP advantages include scalability, portability, and potentially large cost savings over outdated traditional phone equipment. However, disadvantages include spotty call quality in areas with poor internet and an overreliance on electricity to power the phone system.
Businesses ready to make the switch to a reliable and affordable VoIP business phone system should consider Nextiva for the best combination of features at an affordable price. The company offers a free demo of its product when you contact the sales team. Visit Nextiva’s website for details.