What is a Softphone and Why Should You Use It?

Softphone functionality lets employees access their business phone system from any Internet-connected location and desktop or mobile device. Softphones are essential for today’s fully remote or hybrid teams, providing flexibility, portability, and serious cost savings.

Within the softphone interface, users can review key customer data, access advanced VoIP and collaboration features, and connect across multiple communication channels in just a few clicks. Most importantly, softphones give call center agents the freedom to work from anywhere while ensuring they’re always available to assist clients.

In this post, we define softphones and how they work, outline the biggest benefits of leveraging softphone technology, and let you know which SaaS providers offer superior softphone functionality.

• What is a Softphone?
• How it Works
• Softphones vs Hardphones
• Key Features
• Top Benefits 
• Challenges and Limitations
• How to Choose
• How to Set Up
• Popular Use Cases
• Top Providers
• FAQs

What is a Softphone?

A softphone is a VoIP-powered software application that lets users access their business phone system from any Internet-connected device and location. Users can install softphones on any device with a working Internet connection, including desktop and laptop computers, smartphones, and tablets. Softphones are accessible directly in-browser or via downloadable desktop or mobile apps across a variety of operating systems.

The softphone interface has a virtual dial pad that mimics the look of a traditional phone keypad. But because softphones are powered by VoIP technology, they come with advanced call management and business communication features that landline phones can’t provide.

Unlike traditional landlines, which are limited to a single location (your office space) and require a wired connection to the PSTN, softphones facilitate voice calling via the Internet. This means softphone users can make/receive phone calls in-office, remotely, and on personal or company-owned devices.

Even better?

Because softphones are linked to your business telephone number, not a physical address, employees never have to give out their personal phone numbers if they don’t want to. Instead, BYOD (Bring Your Own Device) technology connects employees’ personal devices to your business phone system network.

How Does A Softphone Work?

Softphones work by using Voice over Internet Protocol (VoIP) technology to send/receive phone calls over the Internet, meaning no connection to the PSTN is required.

A Session Initiation Protocol (SIP) server initiates real-time VoIP service by converting analog voice signals into digital signals, eliminating the need for on-premises PBX and paving the way for cloud-based PBX.

These digital signals are broken up into small data packets that travel to the recipient’s device via the Internet, where they then reassemble and play back as voice audio.

Softphones vs Hardphones

The biggest difference between softphones and hardphones is that softphones leverage VoIP technology to make/receive voice calls over the Internet, while hardphones require a physical connection to the wired PSTN network to facilitate telephone calls. In short: softphones are cloud-based and enable remote business communications, whereas hardphones are premise-based are require employees to be physically in the office to access their business phone system.

The below table provides a more detailed comparison of softphones vs hardphones.

Key Softphone Features

Softphones come with built-in advanced VoIP features and unified communications capabilities, enabling seamless collaboration across voice and digital channels. Softphone functionality is included with virtually all cloud business phone systems, but the specific features included will vary by provider and plan.

When evaluating potential VoIP providers, essential features to look for include:

• Basic Call Management Features: Call forwarding, call transfer, call hold, auto attendant, custom business hour routing, call screening (caller ID), call blocking, audio conferencing, SMS/MMS texting, basic call logs
• Advanced Call Management Features: Call routing, ring groups, call blasting, call queues, Automatic Call Distribution (ACD), Interactive Voice Response (IVR) with drag-and-drop call flow designer, automated customer callbacks, outbound auto dialers, real-time and historical analytics and custom KPIs
• Visual Voicemail: Automatically transcribes voicemail messages, sends out real-time push notifications, stores them in a searchable virtual database, or sends them to agents via voicemail-to-email
• Call Monitoring: Automatic or on-demand call recording and transcription, active call listening, call whisper, call barge, in-call coaching
• Team Chat: Instant chat messaging with file sharing and storage, user presence, user mention/tags, custom push notifications, public/private channels, and one-click voice or video calling
• Video Conferencing: Real-time video meetings with screen sharing, breakout rooms, virtual whiteboards, in-meeting chat, AI-powered meeting summaries, host controls, meeting closed captioning, meeting recording and transcription
• Third-Party Integrations: Integration with third-party business applications like CRM software, marketing tools, project management platforms, plus custom APIs

Top Softphone Benefits

Softphones empower remote teams, encourage greater collaboration, improve the customer and employee experience, and boost productivity while lowering operating costs. Additional benefits of softphones include:

• Significant Business Communication Cost Savings: All VoIP providers offer unlimited local and long-distance calling with competitive international calling rates and don’t require expensive on-premises hardware. Making the switch from traditional landlines to VoIP can cut your business’s current telecom expenses in half [*]
• Increased First Call Resolution Rates: Softphones connect customers to the best available representative regardless of their physical location, dramatically increasing first call resolution rates and eliminating excessive follow-up calls that frustrate customers. Every 1% improvement in FCR reduces operating costs by 1%[*]
• Greater Employee Flexibility and Satisfaction: Softphones provide unparalleled flexibility, portability, and mobility, empowering remote teams and giving team members the ability to work from their preferred locations and devices. This expands the agent hiring pool, allowing businesses to hire the best candidates regardless of their physical location. The ability to work remotely also dramatically improves employee satisfaction–and businesses that allow remote work have a 25% higher employee retention rate than those that don’t[*]
• Increased Productivity: Remote and hybrid workers are 35-40% more productive than in-office employees–meaning tools that give agents the flexibility to work from any location will increase overall efficiency[*]
• Higher CSAT Scores: Access to advanced call management features–especially customer self-service tools like IVR and in-call access to CRM data via third-party integrations–boost customer satisfaction and spending. These tools also greatly reduce long call hold times, a huge source of frustration for 57% of customers[*]
• Fast Setup and Easy Installation: While landline telephone systems can take weeks to set up and require bulky and expensive on-site equipment, VoIP calling platforms can be purchased–and scaled–directly on the provider's website with just a few clicks. Businesses can use their existing equipment and can generally complete the setup process in less than 24 hours

Softphone Challenges and Limitations

Though softphones provide clear advantages over hard phone technology, there are a few potential drawbacks to consider when comparing hardphones vs softphones:

• Dependent on Internet Connection: Poor Internet connection quality caused by storms, power outages, or insufficient bandwidth impact phone service and call quality
• High Learning Curve: Understanding the virtual interface, learning how to use new features, and optimizing call flow paths voice over IP takes time and may require paid employee training
• Level of Provider Control: Available features, privacy and security, and pricing are all entirely controlled by the provider, not the end user
• Costly Setup Process: Although VoIP phone systems lower overall long-term business operating expenses, activation fees, setup and installation fees, phone number cots, and bundled plan pricing options is a larger initial expense

How to Choose a Softphone Provider for Business 

When evaluating potential softphone providers, consider essential factors like:

• Scalability: Will the service provider be able to scale alongside your business, differences between pricing tiers, single add-on features vs feature bundles, available communication channels, additional SaaS options like Contact Center, CRM, Webinar, UCaaS platforms, etc.
• Available Features: Does the provider offer all the features your business needs now and in the future, which features are native to the platform and which are accessible only via third-party integration, etc.
• Pricing Options: Instead of shopping by price alone, consider the overall value provided and how well the platform fits into your current budget (Volume discounts, paid add-ons, monthly vs annual pricing, contract length/cancellation fees, etc.)
• Compatible Integrations: Pre-built integrations, custom APIs, quality of current developer community, available integrations with each plan, etc.
• Network Reliability: 99.99% minimum guaranteed uptime, 24/7 network monitoring, global points of presence for network redundancy, average response time for service interruptions, etc.
• Customer Support Options: Customer support hours and channels, paid vs included support options, onboarding/installation setup, on-demand training webinars/video tutorials, quality of online knowledge base, etc.
• User Experience: Overall ease of use, intuitiveness of interface, insight from current user reviews
• Security: Compliance certifications, third-party security audits, SSO/2FA, E2EE, password protection and access control, etc.

How To Set Up A Softphone

Follow the below step-by-step guide to understand how to set up a softphone and configure it to meet your specific business needs:

1. Check Your Internet Bandwidth: VoIP phone systems require a minimum bandwidth speed of 100 kbps per line. Ensure your current Internet is fast enough, and contact your ISP if you need an upgrade
2. Determine Essential Features: Figure out which VoIP features you need immediately, which ones would be nice to have, and which ones you don’t currently need but may in the future.
3. Select Your Softphone Provider: Use the above criteria to choose a softphone provider that’s right for your business–paying special attention to third-party integrations and compatibility with any existing hardware or operating system you plan to continue using
4. Pick a Business Phone Number: Once you’ve selected a provider, you’ll need to buy a business phone number. Determine if you want a local, toll-free, vanity, or international number, then enter in your desired number into the provider database to ensure it’s available. If it’s already taken, the provider will usually suggest a few similar alternatives
5. Choose Your Plan: Select your desired plan–remembering that the cheapest option doesn’t always provide the greatest value. Review available add-ons and included toll-free minutes or SMS messages
6. Enter Your Payment Details: To purchase your softphone, simply enter your credit card details and billing information when prompted
7. Configure Your Phone System: Next, configure your phone system by setting up ring groups, routing rules, call forwarding paths, and any other features you plan to use.
8. Place A Test Call: Once your softphone is set up how you want it, place an inbound and outbound test call to ensure everything is working properly

Popular Softphone Use Cases

Given the benefits highlighted above, it’s easy to see why softphones have countless use cases across a variety of industries. Some of the most popular softphone use cases include:

• Team Meetings: Softphones connect team members from different locations and time zones for real-time, face-to-face video meetings. Employees can brainstorm, complete training and continuing education courses, manage projects, and even collaborate on files and whiteboards from anywhere on desktop or mobile devices.
• Agent Coaching: Softphone features like call whisper let agents get in-call coaching from their supervisors without the customer hearing them, increasing first call resolution rates in CSAT scores. Some VoIP providers offer automated performance scorecards, AI-powered Agent Assist, performance gamification, and company-wide wallboards to improve support quality and increase agent engagement
• Omnichannel Customer Communication: Customer service and support teams can connect with customers in real-time across voice and digital channels–and even switch between devices and channels without disconnecting the current call. CTI screen pops show CRM and helpdesk data on agent screens during live customer conversations, eliminating app switching and allowing agents to provide more personalized service
• Reporting and Analytics: In addition to basic call logs, softphones come with real-time and historical reporting tools that help managers identify workflow bottlenecks, review trends in customer and agent behavior, and optimize self-service options.

Which VoIP Providers Have the Best Softphone Systems?

The below table outlines the top VoIP providers with softphone technology, pricing, and available features.

FAQs

Check out our list of the common softphone FAQs below.