Virtual Phone Number: What is it and How Does it Work?

A virtual phone number, sometimes called direct inward dialing (DID) number, allows you to reach distant customers and add a national presence to your business, even if you’ve just started to expand outside of your home market.

It provides more flexibility than a traditional phone number because there’s no hardwired connection and you can use it from virtually any place in the world.

Let’s take a look at what is a virtual phone number, how it works, its benefits, and how to get one.

 

Jump to ↓

• What is a Virtual Phone Number?
• How Does a Virtual Phone Number Work?
• Virtual Phone Numbers vs Traditional Phone Numbers
• Benefits of a Virtual Phone Number
• How to Get a Virtual Phone Number
• Virtual Phone Number FAQs

 

What is a Virtual Phone Number?

A virtual phone number is a cloud-based telephone number that allows a business to be reached without dependence on traditional landline networks. Virtual business phone numbers use the internet to connect to phone networks without the need for a traditional line or exchange. There is very minimal physical hardware with a virtual phone number, so incoming calls can be answered on any device that connects to the cloud.

Your business can purchase as many virtual phone numbers as it needs from a VoIP service provider to reach locals in various markets. Each number is easily managed through VoIP software, and local area codes, 800 codes, and international numbers are all assignable to your business. The software also enables businesses like yours to accept calls based on business requirements.

Want to receive calls past 5 PM on the East Coast after the business hours of a call center are over? The virtual phone number software automatically routes inbound customer service calls to the West Coast call centers instead, which are open later.

 

How Does a Virtual Phone Number Work?

A virtual phone number uses the internet to place telephone calls. It doesn’t require a SIM card, cell tower coverage, or physical address to make or receive calls. It follows the same rules as traditional landline numbers – local and national numbers have 10 digits, which includes the area code, the three-digit exchange, and the four-digit subscriber number.

To use a virtual phone number, you need a fast internet connection through cable, LTE or Wi-Fi network, and a device like a desktop, laptop, or mobile phone. If your internet connection isn’t reliable, call quality may suffer.

There’s no need to be connected to the copper wire network, which brings with it long-distance fees, expensive installations, and hardwiring requirements.

There are four main types of virtual phone numbers businesses use:

• Vanity Numbers: These use catchy alphanumeric phrases or numbers that make it easy to remember your brand.
• Toll-Free Numbers: These are national numbers that customers use to reach a brand from anywhere without long-distance fees.
• Local Numbers: Local phone numbers use specific area codes to make a business appear more local, even when located far away.
• Local International Numbers: Similarly to local numbers, local international numbers make a business appear to be local to overseas markets.

 

Virtual Phone Numbers vs Traditional Phone Numbers

The main difference between a virtual phone number and a traditional phone number is that virtual phone numbers allow users to make and receive calls over the Internet, while traditional wired landlines rely on the physical PSTN for telephone communication. 

The below table provides a quick overview of virtual phone numbers vs traditional phone numbers: 

Feature	Traditional Phone Numbers	Virtual Phone Numbers
Connection	Wired (PSTN Landline)	Wireless (Internet)
Portability	No–stuck to a physical street address	Yes, can be used anywhere in the world with Internet access
Accessible Devices	Physical phone	Physical phone, mobile device, laptop, tablet
Simultaneous users	One agent can use the line at a time	Unlimited agents can use simultaneously
Privacy	Cannot separate business and personal phone numbers	Can purchase a new number for business
Hardware Cost and Maintenance	Must manually maintain hardware, and buy more for expansion	Provider maintains phone system, and new hardware is optional
Call Routing	Limited call routing options and global coverage	Can route to any number 24/7

PSTN phones are limited to one phone number and one line per physical address, meaning they lack the mobility and portability of virtual phone numbers. Hardwired phones require companies to purchase separate phone numbers for every location where they do business.

Because a traditional PBX phone system is housed onsite, adding new phone lines or upgrading technology is a time-consuming hassle for IT teams – not to mention a major expense for business owners. Plus, in order for multiple agents to use the phone line simultaneously, IT departments must go through the disruptive process of installing a multi-line phone system.

A virtual phone number, on the other hand, is bound by neither wires nor physical location, relying entirely on VoIP (Voice over Internet Protocol) to make/receive phone calls over the Internet.  

VoIP facilitates voice calling via a mobile softphone application that’s accessible on multiple devices simultaneously. Virtual phone system users can make/receive voice calls at any time, from anywhere, and on any device with an Internet connection like smartphones, desktop and laptop computers, and even tablets.

Virtual phone systems are also much more scalable than traditional ones, and adding new phone lines/extensions to an existing VoIP phone number doesn’t require physical installation. Instead, admins simply add new phone lines by purchasing and assigning them directly on the VoIP provider website. The whole process takes only a few minutes and eliminates the downtimes caused by manual phone line installation.

With a virtual phone number, entire teams of agents, not just one user, can have voice conversations or send business SMS text messages simultaneously using the same phone number. 

Virtual phone numbers also come with more advanced features than their landline counterparts.

For example, administrators can route incoming calls to preset devices during certain hours, aligned with agent work schedules. Each phone number or extension can serve a specific function – for example, users can dial one number for the sales department, or put in an extension to connect to customer service.

In short?

Virtual phone numbers offer much more convenience, mobility, functionality, and affordability than standard landline phones.

 

Benefits of a Virtual Phone Number

There are several unique benefits for virtual phone numbers. For smaller businesses, these numbers are often used when the business owner doesn’t want to give out personal data or a personal number. A virtual phone number rings any compatible phone, and most services even allow for text messaging and voicemail.

All of this is managed with the same packet-switching technology that is used with other internet-based services. There’s no need for maintenance of telephone wires and there are no open circuits to account for as calls are made.

There are several other reasons to consider virtual phone service for a small business.

 

Link Business Locations with One Phone Number

With a virtual phone number, several locations around the globe use a single, centralized number to answer calls. If a customer in a particular timezone needs help, he or she gets it from agents in their area of the world. Using extensions with a virtual phone number is also possible, so if a customer needs more specialized help, they’re connected to the right department. This is done even when the initial number’s center is located hundreds of miles away from the extension.

 

Access to a Wider Pool of Talent

There are no physical limitations when it comes to opening up a phone center around the world with a virtual phone number. This means that your business phone system links up customers with their right agent, regardless of the point of origin or the agent location. Since virtual phone numbers are independent of traditional PSTN and PBX hardware, agents that are on the road receive business calls on their smartphones and laptops. With this kind of connectivity, customers are easily connected with agents that have previously helped them.

Matching the point of origin with a call center in the area is much easier as well. The United States and Canada are filled with regional dialects and local call centers that tackle local cases make it easier for agents to understand customer needs. With a local virtual phone number, businesses easily match specific calls with agents that speak the dialect or slang. Even if they are located hundreds of miles away, the caller sees the area code and thinks the call is routed locally.

 

Receive Calls Anywhere

Virtual phone numbers deliver more flexibility for employees outside of the office. For example, if a receptionist has to work remotely, he or she still receives any calls directed to the company. This is done via desktop or mobile apps. Since virtual numbers come with software for call management, it’s easy to use call forwarding or call routing to connect with other departments.

Some VoIP software has the functionality of call transferring from device to device. A call received on a softphone is quickly sent to a smartphone or cell phone when the employee needs to change locations. When an employee has a scheduled callback, he or she goes about their business without the need to wait by the phone. Because of COVID-19 pandemic, this became important because virtual phone numbers allowed employees to receive calls from home, even when they were socially distant.

 

Provide Dial-in Numbers for International Markets

Some products thrive overseas, and one of the best ways to expand into foreign markets is by providing customers with a local number to reach your organization. Virtual phone numbers aren’t limited to U.S. area codes and 800 numbers. You can also purchase international numbers from some providers for your foreign customers to reach you.

With a virtual phone number, it’s easy to set up a call center in a region like Nova Scotia and receive calls from customers based in foreign markets like Italy. The caller won’t have to dial long distance, and the call center routes these types of calls to agents that are well-versed in Italian. To the caller, there’s no indication that they are dialing out of the country, and you’ll provide a strong customer service experience to those who reach your brand from foreign markets without the need to open local call centers.

Since this technology routes all of the calls to a single number, it provides a way to guarantee that international markets have a localized dial-in number where customers reach the business and the department that they need to speak to and get their issues dealt with quickly.

 

Measure Performance of Sales and Marketing

In marketing or sales, you need to be able to keep track of the number of calls that you receive, especially if you are taking calls from multiple campaigns. You can associate specific phone numbers to marketing campaigns, instead of using your main phone number, and effectively measure the performance and conversion rates of those campaigns.

With a virtual phone number, it’s easy to heatmap success in various markets. For example, if callers dial your number in the 515 area code more often, this is an indicator that your campaign may have more Des Moines callers. Maybe the campaign in that city could transfer well into another area to increase sales.

 

How to Get a Virtual Phone Number

Whether you’re seeking out a toll-free or a local number, most providers get you set up with a virtual phone number during the signup process. Typically, they charge per phone line, per month and port over old numbers to their service. Vanity, toll-free, and local numbers are all available through virtual phone number providers.

While there are services that offer free virtual phone numbers, they won’t offer the options of unlimited calling or the ability to connect to multiple users. When you want customer calls routed to the right place without restrictions, a subscription service is the way to go.

Let’s take a look at some of the providers that offer virtual phone numbers.

Provider	Available Prefixes	Plans	Vanity, Local, and Toll-free numbers	International
Grasshopper	800, 833, 844, 855, 866, 877, 888	Basic -$26/m Premium – $44/m Platinum – $80/m	Yes	No
RingCentral	800, 844, 855, 866, 877, 888	Essentials – $19.99/m Standard – $24.99/m Premium – $34.99/m Ultimate – $49.99/m	Yes	Yes
GoToConnect	800, 844, 855, 866, 877, 888	1-99 Users – $19.95 – $29.95 100+ Users – Custom Pricing	Yes	Yes
Nextiva	800, 833, 844, 855, 866, 877, 888	Essential – $19.95/m Professional – $20.95/m Enterprise – $27.95/m	Yes	No
UniTel Voice	800, 833, 844, 855, 866, 877, 888	Start-Up – $9.99/m Unlimited – $29.99/m Office – $49.99/m Custom – Not published	Yes	No

 

 

Best Virtual Phone Number Providers

Several providers deliver virtual phone numbers in their plans. In this next section, we’re going to take a look at five that provide toll-free, local, and vanity numbers.

 

Nextiva

Nextiva provides virtual phone numbers in every state. This includes toll-free numbers of all prefixes, vanity, and local options. Nextiva is a provider that delivers unified communications to business owners, and features like virtual voicemail and an auto attendant come bundled in with their plans. According to their site, Nextiva is “the largest local business virtual phone number provider in the country.”

Nextiva has three business communications plans that include Basic, Pro, and Enterprise. Each of these is built with communications with clients and between team members in mind. Nextiva also makes it relatively easy to port older numbers to their virtual phone system.

Nextiva offers its customers:

• 24/7 Phone, email, and live chat support
• Shared call appearance
• Bundled virtual voicemail and auto attendant

 

RingCentral

RingCentral makes it easy to select a toll-free number that has 800, 888, 877, 866, 855, or 844 prefixes. RingCentral also has a complete UCaaS platform for its users so that they can experience a full suite of business communications options.

Compared to Grasshopper, RingCentral has a structure that accommodates most business sizes, and there are four business plans to select: Essentials, Standard, Premium, and Ultimate.

RingCentral offers its customers:

• Hundreds of integrations
• Visual voicemail and voicemail to email or SMS
• 24/7 support for the Standard Plan and above

 

Grasshopper

Grasshopper is a VoIP provider that is designed for the solopreneur up to the mid-sized business owner. It comes packed in with features like Gmail integration, business text messages, caller ID, voicemail transcription, and of course, custom phone numbers. Our comprehensive review of Grasshopper pricing and plans revealed the many reasons why this is a top choice for small businesses.

Grasshopper offers its customers:

• Voicemail transcription
• Virtual fax
• Gmail integration

 

 

GoToConnect

GoToConnect offers to choose from within over 200 area codes. It charges by the minute for inbound calls on virtual business numbers, but flat monthly rates are also available. You can also buy phones from their website.

They can offer several prefixes, including 800, 888, 877, 866, 855, or 844 numbers to customers. For those that want to transition from a PSTN system, analog telephone adapters (ATA) are also offered. These allow traditional phones to work like VoIP phones.

GoToConnect offers its customers:

• Individual call logs
• Inbound call filter to block robocallers and spam
• Lightweight Directory Access Protocol (LDAP) integration to streamline user login

 

 

UniTel Voice

UniTel Voice is a service provider that grants toll-free virtual phone numbers with the 800, 888, 877, 866, 855, and 844 prefixes. It also allows access to 833 numbers, which were added in 2017 by the FCC. UniTel differentiates when callers reach out via the virtual business number by featuring the inbound number on the device screen. From here, it’s easy to answer or to forward calls.

UniTel Voice offers its customers:

• Unlimited extensions
• Voicemail to email transcription
• Voice Talent Studio for customized messages

 

Virtual Phone Number FAQs

Below, we’ve answered some of the top FAQs about virtual phone numbers.