What is VoIP Phone Service? The Complete Guide You Didn’t Know You Needed
5 November 2019Let’s face it: those of us that owns businesses are always looking for ways to make them more effective for less money. And when it comes to communications, if you don’t know what is VoIP, you are missing out.
Voice over Internet Protocol is a game changer for small businesses and a market in constant growth—the VoIP services market is expected to reach the valuation of USD $132.2 billion in 2024. Until 2034, FMI projects the industry will grow 10.2% yearly, reaching the USD $349.1 billion mark in value.
To ensure you harvest every benefit of this growing technology, we have created a complete guide, breaking down everything you need to know about VoIP phone service.
What is VoIP Phone Service, and How Does It Work?
At its core, VoIP stands for Voice over Internet Protocol. This technology allows you to make and receive calls over the internet instead of traditional phone lines. It converts voice into digital packets which are then transmitted over the network all the way to the receivers’ end.
How Does VoIP Work?
Let’s dive a little deeper into how this technology works. VoIP utilizes packet-switched protocols to transmit voice data. Here’s a simplified breakdown:
- Voice Capture: When you speak into a VoIP device, your voice is captured as analog signals.
- Digital Conversion: These signals are converted into data packets.
- Data Transmission: The packets travel over the internet to the recipient.
- Reassembly and Playback: The data is reassembled and converted back to audio on the recipient’s device.
In a nutshell: VoIP converts your voice into digital signals, transmits them over the internet, and then reconverts them into audio for the recipient. This seamless process eliminates the need for conventional copper wires, making communication faster and more cost-effective.
This process ensures clear and uninterrupted communication, provided you have a stable internet connection.
What is the Difference Between VoIP Phones and Landlines?
While both systems facilitate voice communication, the differences between VoIP phones and landlines are significant:
With VoIP, businesses gain access to modern features and greater flexibility at a fraction of the cost of landlines.
Types of VoIP
There are two different types of VoIP services – Hosted PBX and On-Site PBX services. Hosted VoIP services are those wherein the phone connects through the internet connection to a VoIP provider who maintains the hardware and equipment at an off-site location.
On the other hand, On-Site VoIP services are those where the hardware and the equipment required for VoIP services are maintained on-site inside the business server room.
With Hosted VoIP services, the business places the majority of the IT responsibilities with the service provider, meaning the burden related to maintaining and monitoring the VoIP system lies with said provider. There is no need for the business to have additional IT staff and training to operate VoIP services. However, businesses still have to configure the devices’ connection to the PBX server, firewall settings, etc.
With On-Site VoIP services – all the hardware is kept within the business, thus providing better opportunities for customization. Businesses get the freedom to customize various features, including call routing and scalability. But, when the majority of the hardware is kept on-site, businesses are recommended to have trained IT staff to better manage the operations—and this can increase the final cost.
Advantages of VoIP
Switching to VoIP comes with a range of benefits:
- Cost Savings: The use of VoIP can reduce your communication expenses by up to 50%.
- Scalability: The technology allows you to add or remove lines easily as your business grows.
- Flexibility: You can make calls from any device—desktop, mobile, or tablet.
- Advanced Features: Many VoIP providers offer features you can use to create the ideal phone system for you and your business. Access tools like Call Recording, Transcription, and analytics.
- Global Reach: VoIP makes communication easy and allows you to connect seamlessly with clients worldwide.
Disadvantages of VoIP
While VoIP offers many advantages, it’s important to consider potential drawbacks:
- Internet Dependency: It requires a stable internet connection.
- Power Outages: VoIP services may be unavailable during outages.
- Quality Variations: Call quality may fluctuate with poor network performance.
That’s why choosing a reliable internet provider is so important for VoIP phone systems. It’s the first step in succeeding with your VoIP-based communication strategy. The second step is looking for a VoIP provider that you can trust and that will offer the features and services your business needs to thrive.
4 Best VoIP Phone System Features
VoIP services offer a plethora of features tailored to modern communication needs. Here are the top four:
1. Digital Receptionist
A virtual assistant that efficiently routes incoming calls, saving time and enhancing professionalism. If you ever called a bank or even your dentist’s office and were welcomed by a menu with options to speak to a certain department, you were in direct contact with a Digital Receptionist (also known as IVR).
2. Call Recording and Transcription
Record calls for compliance, training, or review, with automatic transcriptions for quick reference. This feature is essential for excellent customer service—especially in a B2C setting. Use recording to train your staff and gain valuable information about your customer’s pain points.
3. Flexibility
Whether it’s a desktop, laptop, tablet, or smartphone, VoIP ensures seamless connectivity across all platforms. Just remember, for your VoIP phone number to work, you will need a softphone to complete your system. You can, for example, use Microsoft Teams as a softphone or another app or website of your choosing.
4. SMS/MMS
Send and receive text messages, images, and videos directly through your VoIP service, keeping communication centralized. You can even create full-on SMS marketing campaigns using the Text Messaging Services feature to keep your customers updated on new launches and discounts.
Why Use VoIP Instead of a Cellphone?
Cellphones are convenient—and everyone has them—, but VoIP offers advantages that make it a better choice for professional communication:
- Cost Efficiency: VoIP plans are often more affordable, especially for long-distance and international calls.
- Professional Features: Access tools like auto-attendants and call analytics that cellphones can’t match.
- Consistency Across Devices: Maintain the same number and features across multiple devices, ensuring uninterrupted communication.
Related: Streamline Your Business Communication with VoIP Phones
How Much Does VoIP Cost?
VoIP costs can vary depending on the provider and features included. However, here are some general insights:
- Monthly Plans: Most providers offer plans starting as low as $10 per month per user.
- Additional Features: Premium features like call analytics or international calling may incur extra charges, as well as the number of lines and numbers your company needs.
- Setup Costs: Minimal compared to traditional systems, with many providers offering free trials. You can also count with Bring Your Own Device options, which lowers hardware costs even more.
In summary, VoIP provides significant savings and a wealth of features, making it a smart investment for businesses of all sizes.
Ready to Grow Your Business with VoIP?
VoIP technology is revolutionizing the way businesses communicate. With its cost efficiency, advanced features, and unmatched flexibility, it’s no wonder that VoIP is the go-to solution for modern communication needs.
To learn more about the possibilities VoIP offers, start by visiting our VoIP Phone Number service page and take the first step to tailor the ideal communications system for your business.
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