Voice over Internet Protocol (VoIP) technology transmits your voice as data over the internet instead of copper wire. VoIP phone systems are affordable alternatives to landline telephones and also offer businesses a wider range of features than traditional phones, like an operator switchboard, auto-attendant, and CRM integrations that enhance the customer experience.
Companies find VoIP solutions like Nextiva, which ranks top on our list of best VoIP providers for small businesses, often beat landline service options 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.
How VoIP Phone Systems Work
VoIP works by converting a voice signal into digital data that is transmitted over an internet connection instead of wiring supplied by your local phone company. If you’ve ever used the audio versions of apps like Google Voice, Facebook Messenger, WhatsApp, and Skype, then you’re already familiar with how VoIP works.
Digital voice data automatically converts to a regular signal when calling a regular telephone, so VoIP calls can be made to any phone number, including mobile devices, local, and long distance numbers. However, some providers charge an additional fee for international calling, so it’s important to know your plan limitations before placing a call.
To make and receive VoIP calls, you need electricity, a reliable high-speed internet connection, and a way to communicate with your caller. VoIP providers typically supply customers with an app for computer-based calling, but most users will want more than their laptop’s built-in microphone and speakers for making calls.
Hardware options include:
- VoIP phone
- Traditional phone connected to a special adapter
- Headset and microphone plugged into your computer
- Conference phones for team calling
Who VoIP Is Right For
VoIP phone systems are right for businesses that want an easy to use and affordable alternative to expensive landline service with advanced call management features. VoIP systems are also a good option for companies that need a mobile and flexible communication system that can adapt to changing business needs.
VoIP phone systems are a smart choice for:
- Call Centers – With features like automatic call distributors, call monitoring tools, and interactive voice response, VoIP phone solutions help companies improve the customer experience and provide superior service to callers.
- Sales Teams – Many VoIP phone systems feature tools that integrate with popular CRM platforms like Freshsales and Pipedrive to allow coordination of call data with other customer relationship information.
- Solopreneurs – VoIP phone service is an affordable option for solo entrepreneurs to have a business line with basic features on their personal phones. It’s a good way to stay competitive in larger markets by making phone communication appear professional from any phone.
- Mobile Teams – Businesses with mobile workers and employees who travel benefit from features in a VoIP phone system, like call forwarding and the ability to make outbound calls on your mobile appear as if they’re coming from your desk phone.
- Growing Companies – Most VoIP providers offer a range of price plans and many have a la carte feature selections, making it possible to customize the right solution for your business needs that can scale as your company grows.
Whether your company is young or established, very small or corporate-sized, phones are likely to be something you can’t do without. Fortunately, a competitive market means a range of solutions that are right for nearly every type of business need.
VoIP Phone System Costs
VoIP costs range from free, no-frills service to feature-packed plans with a higher price tag to match. Free services offer internet-only calling and few other features. More expensive plans can run as high as $60 per user per month or more for unlimited phone calls, SMS, call recording, mobile apps, and internet fax.
Examples of price plans and features include:
- Free – Free domestic calling through your computer, voicemail, call blocking, and call screening.
- $20.95/user per month – Unlimited domestic calling, free local number, free toll-free number, unlimited faxing, and conference bridge.
- $59.99/user per month – Unlimited domestic calling, 10,000 toll-free minutes, unlimited video and audio meetings, unlimited faxing, CRM integration, auto-attendant, visual voicemail, unlimited SMS, call log reports, call recording, and 24/7 customer support
With such a wide range of pricing available, you’ll want to decide which features are must-haves and what you can do without so you aren’t paying for things you don’t use. It’s also a good idea to check in with a sales agent while comparing prices, since many providers offer volume discounts and discount pricing on yearly prepaid agreements.
VoIP Phone System Features
VoIP phone systems are packed with tools to help small businesses establish and nurture communications with customers. Features like unlimited domestic calling, voicemail, call waiting, and call forwarding are standard with most VoIP providers. Options like softphone calling, auto-attendant, and CRM integration can improve team efficiency and enhance the customer experience.
Auto-attendants greet and route callers to specific phones, extensions, or departments. Some auto-attendants can also route calls to multiple locations and can be used on external phone numbers, so mobile or personal phones function the same as the user’s desk phone.
VoIP phone systems with 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.
Phone Number Porting
Established businesses won’t want to give up their phone numbers when moving to a new phone system provider, so many VoIP solutions port existing numbers for free or for a small charge. 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 and Toll-Free 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.
Free Local and International Calling
Free unlimited domestic calling is a common feature offered by most of the larger VoIP providers. Some also offer unlimited international calling to groups of countries, with more groups available at higher pricing tiers. Most providers offer pay-as-you-go international calling rates.
VoIP Phone System Providers
Choosing a VoIP phone system provider is an important decision that impacts customers, teams, and individual workers. We’ve done much of the research for you and compiled a guide to help you choose cheap VoIP services for your small business needs.
Here are some of the most popular, fully-featured VoIP solutions on the market:
Nextiva ranks as our best business phone system and best VoIP provider. Nextiva’s lower tiers have enough features to meet the needs of most small businesses while the upper tiers add advanced tools larger companies may need, like call recording, a conference bridge, and mobile apps.
Nextiva’s pricing ranges from $19.95 to $27.95 per user per month. This service is a great choice for companies that want the best combination of standard features at an affordable price.
Our reader reviews give Nextiva a four out of five-star rating, praising the company’s responsive customer support team and good call quality. However, some users say the website portal is unintuitive and cumbersome.
RingCentral is a solid option for organizations that want a VoIP solution with price plans and features that keep pace as a company grows. Its pricing tiers support teams of less than ten and businesses with hundreds of employees, while features like the number of toll-free minutes grow as you move up the tiers.
RingCentral’s pricing runs from $29.99 to $59.99 per user per month. The basic tier includes unlimited calling, toll-free minutes, call management tools, mobile apps, and team collaboration tools. Upper tiers feature integration with Zendesk and Salesforce, automatic call recording, and multi-level auto-attendant. Sales and support teams with high call volume should take a look at RingCentral.
Our readers give RingCentral a four out of five-star rating, with positive feedback about its call management tools and reliable customer support. However, some customers say the user interface is a bit cluttered and the dashboard sometimes lags.
8×8 is a smart option for companies that make and receive a lot of international calls. Price plans with unlimited global calling zones make budgeting easier than pay-as-you-go calling rates offered by other providers. 8×8’s CRM integration also makes it a great choice for teams that want customer relationship tools built into their VoIP phone system.
8×8’s pricing ranges from $25 to $55 per user per month. The basic tier includes unlimited calling to 14 countries and CRM integration with Salesforce, Zendesk, and NetSuite. Upper tiers add calling to up to 47 countries and features like mobile apps, call recording, and an auto-attendant.
Our readers give 8×8 mixed reviews with a two out of five-star rating. While customers are happy with the company’s robust set of features, some say the price is too high. Users also report it can take a long time to port existing phone numbers.
Grasshopper is a VoIP phone system for very small business owners and solo entrepreneurs who want phone features like an auto-attendant and toll-free phone number on their personal landline or mobile device. These features help business owners stay competitive by ensuring business communication always appears professional from any phone.
Grasshopper’s pricing is between $29 and $89 per month, depending on how many phone numbers and extensions are needed. All plans include unlimited domestic calling, texting, desktop and mobile apps, voicemail and voicemail transcription, inbound fax, and call forwarding.
Our reader reviews give Grasshopper a three out of five-star rating for its affordable pricing and ease of use. Customers say it’s also very easy to set up an account. However, users report the service doesn’t consistently connect calls, which is an important factor when making purchasing decisions.
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 is also a good choice for businesses wanting a solution with features that are customizable for each user.
Vonage pricing is between $19.95 and $27.95 per user per month. All plans include unlimited calling, free local and toll-free phone numbers, and unlimited fax. Upper-level plans add call recording, a conference bridge, and mobile apps.
Our readers give Vonage a three out of five-star rating, with an emphasis on how easy the mobile and desktops are to use. Customers also say the voicemail-to-email feature is extremely convenient. However, some users report problems with dropped calls and call quality.
The right VoIP phone solution ultimately depends on the unique needs of your business, and sometimes it helps to learn what other VoIP customers in your industry have to say. Our VoIP user reviews page is a great resource to learn what readers say they like about VoIP phone system providers and what they could do better.
Types of VoIP Phones
Since VoIP phone systems are a versatile alternative to landlines, there are also a variety of types of VoIP phones on the market to support a range of business needs. Most phones support several VoIP features and are meant for typical office situations, like placing person-to-person private phone calls on a handset, but a couple of VoIP phones are designed with specific business needs in mind.
Desktop VoIP Phones
Desktop VoIP phones connect to your VoIP phone system via an Ethernet cord or over Wi-Fi. These phones typically feature support for multiple lines, voicemail, three-way calling, and Bluetooth or corded headsets. Desktop VoIP phones are a top choice for companies that assign telephones to desks or offices rather than employees and therefore expect phones to remain permanently in one spot.
Conference VoIP Phones
VoIP conference phones use your VoIP phone system for conference calling and include features that allow the host to mute participants, block callers, and put people on hold. Some conference phones also include web browser-based tools with additional controls like call scheduling and contact management. Conference VoIP phones help businesses run conference calls efficiently while saving money on long-distance bills.
Call Center VoIP Phones
Call center VoIP phones are desktop phones that include tools designed to make an agent’s job easier and help them focus on callers to deliver the best possible customer experience. Features include interactive voice response to direct callers to the right agent the first time and call monitoring tools for quality assurance. Call center VoIP phones are a good fit for businesses like sales and support teams with a high volume of customer calls.
Softphone apps aren’t physical phones in the traditional sense, but rather a software application supplied by the VoIP provider that allows customers to make and receive calls over the internet on their computer, mobile device, or tablet. Softphones free users from desk phones while keeping them connected to the company’s main communication network, call management, and team collaboration tools. They are ideal for business owners and workers who travel or don’t want to rely on a handheld phone for making calls.
Pros & Cons of VoIP Phone Systems
VoIP phone systems have a lot of advantages and benefits, but they aren’t perfect. There are a few things to keep in mind when deciding whether a VoIP solution is right for your business.
Pros of VoIP Phone Systems
Why you should consider a VoIP solution:
- VoIP Is Portable – VoIP business systems can move with you anytime, anywhere, so it’s hassle-free if you move your company across town or across the country.
- VoIP Is Feature-Rich – Technologically, landline phones simply can’t offer the wealth of features VoIP systems can.
- VoIP Can Save Money – VoIP service can be much cheaper or even free if you don’t require a lot of features and options.
Cons of VoIP Phone Systems
Why you shouldn’t consider a VoIP solution:
- VoIP Requires Internet – If your business is in an area where internet is consistently unreliable, your VoIP experience won’t be good.
- VoIP Requires Electricity – Corded landlines continue to work during a power outage, but the VoIP phones and Wi-Fi connections facilitating your VoIP calls won’t.
- VoIP Call Quality Can Be Spotty – If your internet connection quality degrades, so do the quality of your calls.
Bottom Line: What Is VoIP
VoIP phone systems are cost-effective, feature-rich alternatives to traditional business landline phones. Choosing a VoIP business phone system is a big decision and there are many things to consider. All the research required to understand what VoIP is, and what it can do, may seem overwhelming, but the payoff is worth it in the end for a reliable communication system with features that no landline can match.
Businesses wanting a VoIP solution with a great set of call management tools that’s backed by reliable customer support should check out Nextiva. The company offers a free demo, so visit the website today for details.