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Best Small Business VoIP Services - February 2024

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Voice over Internet Protocol (VoIP) is a communications technology that uses the Internet to make and receive calls. VoIP is a cost-effective alternative to traditional landlines, offering features that improve business communication.

By transmitting voice, video, and multimedia communications through the Internet rather than landline, VoIP providers offer several advantages: higher sound quality, scalability, flexibility, advanced cloud-based features, and easy maintenance.

You must first choose a VoIP provider and subscribe to their services to use VoIP. After that, you can download the app from your chosen provider and begin calling and sending texts from your desktop, mobile, or VoIP hardware device. Most VoIP apps usually include a built-in dashboard where users can handle inbound and outbound calls, check voicemail messages, monitor call queues, transfer calls, and more. Softphone functionality enables you to make calls directly from your device, though VoIP solutions also connect to VoIP desk phones.

 

VoIP works by compressing voice audio into digital data packets and then sending this data over the Internet to the recipient. Once these data packets reach their destination, they decompress and convert into regular voice audio.

This process enables VoIP users to make and receive calls from anywhere they have an Internet connection–even around the globe.

For a more detailed explanation, check out our guide on VoIP and how it works. The below diagram shows how it works in more detail:

How Does VoIP Phone Work

 

There are three different types of VoIP services: on-premise, cloud hosted, and hybrid. Each one describes a unique way of setting up your VoIP infrastructure.

 

On-Premise

With an on-premise private branch exchange (PBX) setup, your business manages the physical VoIP hardware onsite. You host the servers, phone lines, data centers, wiring, and your VoIP system’s connection to the landline PSTN. Companies with on-premise PBX still use a VoIP service provider to connect VoIP calls across the country and globe–but the company itself hosts all the computers and data.

On-premise VoIP can be costly to set up and requires a knowledgeable IT staff to troubleshoot and perform system upgrades when necessary. The PBX system and servers generally connect to all the local computers via wire, with employees making calls from physical VoIP phones that are connected to computers by ethernet cables. This infrastructure tends to lack some of the advanced features and communication channels that cloud-hosted VoIP software offers.

In-person teams with physical phones tend to use on-premise VoIP most often.

What is PBX

 

Cloud Hosted

Cloud-hosted VoIP is when your VoIP provider hosts and manages the PBX system remotely. Cloud-hosted PBX means users simply download a VoIP app, which provides access to all the VoIP features. Hosted VoIP providers typically offer feature-rich capabilities that bundle multiple communication channels, routing features, analytics, and more. Further, VoIP providers typically offer DID phone numbers across the country, which you can purchase and assign to users based anywhere.

Because hosted PBX requires no hardware besides an Internet-connected device, it’s usually cheaper than on-premise. This setup works great for small teams, companies looking to scale, and remote or hybrid offices.

 

Hybrid

A hybrid VoIP setup features a mix between on-premise and cloud-hosted, with some aspects of the phone system infrastructure hosted onsite and some managed remotely by a VoIP provider. For example, your team may host their own PBX device but use a provider’s data centers, or vice versa. You may use a VoIP provider for your phone system, but integrate this system with third-party software such as softphone tools, IVR systems, analytics platforms, or CRM applications.

A hybrid infrastructure still requires some maintenance and setup costs, but less than with a fully on-premise system. Usually this setup works best for in-person teams that already have a PBX phone system but want to add more features.

When comparing VoIP providers, look for the following features and capabilities:

  • User Portal: Most VoIP providers offer a desktop and mobile user portal to access all your system features–making and receiving calls, call handling tools like transfer and call parking, sending texts, checking voicemail, and monitoring queues. Look for a cloud-based user portal that enables system users and supervisors to manage and access all phone system capabilities with just a few clicks on any device.
  • Call Routing: Call routing handles incoming calls and navigates them to the right agent or department. For more advanced routing capabilities, look for automatic call distribution (ACD) features that determine where to route the call based on data like business hours, customer information, menu selections, and agent skills.
  • Interactive Voice Response (IVR): An IVR system is an automated self-service phone menu that presents inbound callers with dial-tone options to direct their call to the right user, department, submenu, or announcement. Advanced VoIP providers offer drag-and-drop design tools to create IVR call flows linking users, submenu options, announcements, and capabilities like appointment booking.
  • Call Queueing: Call queueing organizes incoming calls into hold queues when your agents are busy. From the agent dashboard, team members can view the calls in their queue, each call’s wait time, and call users back with one click.
  • Call Recording: Many VoIP providers offer automatic or on-demand call recording. These call recordings are stored with each call’s data in the call log, where business owners can download, share, or review them for evaluation purposes.
  • Call Transcription: Some VoIP providers offer call transcription, which generates live captions for agents. Transcriptions are stored within each call’s log for evaluation purposes, download, or to help agents review call details. Advanced phone systems will use call transcription as the basis for AI-based features like customer sentiment detection, action items and conversation topics, and canned response suggestions.
  • Call Monitoring: Call monitoring enables supervisors to supervise phone calls by listening quietly, whispering private guidance to the agent, barging into the call as a third party, or taking over the call entirely. Also known as “listen, whisper, barge, takeover,” call monitoring helps with phone-system supervision, feedback, and agent accountability.
  • Call Analytics: Business VoIP providers offer real-time and historical caller analytics that give insight into agent activity and productivity, call volume, call trends, and more. Supervisors can customize and view dashboards with a variety of visuals, filtering metrics by agent, department, or the whole team–over any time period.
  • Virtual Phone Numbers: Companies can purchase local and toll-free numbers from area codes around North America and the globe, easily assigning these numbers to team members
  • Communication Channels: VoIP phone systems generally offer not only calling, but unified communications capabilities that include texting, video conferencing, and internal team chat. Users can manage and jump between these channels from their UCaaS app dashboard, interacting with customers and internal teammates.
  • Voicemail and Call Logs: Agents can customize their voicemail inbox and greeting, and access call logs with the option to call contacts back instantly. Many software systems also include voicemail transcription, and the option to forward voicemail notifications by email or SMS.
  • Contact Management: Teams can build contact profiles and share them amongst all users, building background information for each contact. Team members can make notes on contact profiles, track previous interactions and sentiment scores, and sync customer information with integrated CRM platforms.
  • Integrations: VoIP software programs usually integrate with popular third-party software solutions–like CRM platforms, databases, analytics tools, and calendar apps–for unified functionality and data that syncs across apps.

To choose the best VoIP provider for your needs, use the following process:

  1. Consider your phone system needs
  2. Check your hardware and software compatibility
  3. Shop by value, not by price
  4. Use the free trial or demo

 

Step 1: Consider Your Needs

Each business has unique needs, short and long-term goals, budget, and customer base. There is no “one-size-fits-all” VoIP platform.

 

To find the best fit for your company, consider the following factors:

  • Your Company size: Understand the number of team members you have that will use the VoIP service and their calling needs. Each of your users may require a dedicated line/extension. Knowing your needs will simplify the process.
  • Desired features: Consider the types of features you need. Do you need unlimited calling? Will you be texting from your business number? Do you need ring groups and call queues? Identify your daily and weekly call volume and what you need. With that, you can start to narrow down your choices.
  • Customer data and preferences: Note who your customers are, their most frequent reasons for contacting you, when they typically call, which departments and staff they seek most often, and which channels they prefer.
  • Business goals: Identify the KPIs you’d like to improve, such as improved customer hold times, faster handling time, making staffing more efficient, improving team communication, save money, etc.
  • Current phone system costs: Determine what you’re currently spending. Compare your current costs to the newly proposed quotes.

 

Step 2: Check Hardware and Software Compatibility

If you already have VoIP phones from brands like Poly, Yealink, or Cisco, make sure these phones are compatible with the new provider you are considering. Your existing VoIP hardware may not be compatible with your new provider. Each provider has its lineup of compatible hardware.

In addition to hardware compatibility, ensure the provider can integrate with any existing third-party software you use. Since nearly all VoIP apps function on computers, tablets, and mobile devices, additional hardware is unnecessary for a complete cloud-based phone system.

 

Step 3: Shop By Value, Not Price

While it’s tempting to prioritize the cheapest pricing plans, the overall value is more important.

Cheaper plans often lack essential features like call queuing, monitoring, recording, or comprehensive analytics. In most cases, it’s cheaper to upgrade to a higher tier than to purchase a la carte add-ons for the most affordable plan.

Look for a provider and pricing tier that offer all your must-have features and communication channels, while minimizing extras that you don’t want.

 

Step 4: Use the Free Trial or Demo

The best way to select a VoIP provider is to test your top choices: utilize the product’s free trial, or watch a few demo videos on YouTube.

  • Free trial: Utilize each product’s 7-day or 14-day free trial. Have your agents test the interface and calling features, then ask for feedback about usability.
  • YouTube tutorials and demos: You can get a great feel for VoIP software usability and interface through YouTube tutorials. Watch a few videos to get a feel for the dashboard and team-messaging screen.

Here are some of the key benefits of using VoIP:

 

1. Cost Savings

VoIP is generally 30-50% cheaper than traditional landlines because it reduces hardware needs, IT and staffing demands, and calling costs.

  • Less hardware: VoIP applications use desktop and mobile apps to make and receive calls, texts, and even faxes. This means you don’t need to have a VoIP phone, or any hardware beyond an Internet-connected device.
  • Quick setup: Hosted PBX VoIP systems require minimal setup–simply purchase subscriptions, assign phone numbers, and your agents are ready to call
  • Reduced maintenance and staffing needs: Since VoIP requires no onsite hardware, you reduce the need for maintenance costs, upgrades, and IT staff

 

2. Flexibility and Mobility

Compared to landlines, one major advantage is that VoIP works anywhere you have Internet: in the office, at home, at a coffee shop, in the car, or even on vacation.

  • Hybrid and remote teams: VoIP supports hybrid and remote teams because administrators can purchase phone numbers and assign them to users in minutes, no matter where the agents are based
  • On-the-go business functionality: Users can make business phone calls, message teammates, or join video meetings from their mobile phones on the go

 

3. Better Customer Service

Business VoIP enhances a company’s customer service in multiple ways: improved routing, quicker service and self-service, more ways to connect, and stronger customer context.

  • Improved routing: VoIP phone systems often include built-in IVR, automatic call distribution functionality, and intelligent routing options like skills-based or relationship-based routing
  • Quicker service and self-service: Tools like IVR help callers reach the right agent on their first try, also providing fuller customer context so agents can provide quick support
  • More ways to connect: A VoIP-powered phone system enables your company to connect with customers in multiple ways–self-service, VoIP call, SMS, or video

 

4. Scalability and Global Presence

VoIP service providers offer DID phone numbers from around North America and the globe, including toll-free numbers. Companies can purchase numbers and assign them to employees instantly, making it easy to scale up or down.

  • Scalability: Add new users to your company account instantly, no matter where they’re located, simply by purchasing a new subscription and assigning a phone number
  • Global presence: Purchase local, toll-free, and vanity business numbers around the country or globe

 

5. Advanced Features

Even small business VoIP solutions include dozens of native features that traditional phone systems cannot match. Integrated within the dashboard and interface, these features promote efficiency and team collaboration.

  • Efficiency: Routing and queueing features organize inbound calls, so that agents spend time and effort interacting with customers, rather than rerouting calls
  • Collaboration: Video-meeting tools like breakout rooms and whiteboards, team chat and file sharing–these features unify remote and hybrid teams, enabling ideation

 

6. Business Insights

Get analytics, AI, and monitoring features to support supervisors and administrators with business insights.

  • Analytics: These reports provide information about channel usage and caller behaviors so that administrators can make more informed staffing decisions and which features to purchase.
  • AI support: Advanced VoIP systems use AI for automatic transcriptions, conversation and video analysis, and even live speech recommendations for agents. This improves performance and training.
  • Monitoring: Call monitoring tools help supervisors track teams, providing better evaluations and feedback.

While business VoIP offers plenty of benefits compared with traditional landline, cloud-based telephony also has a few drawbacks:

 

Learning Curve with New Features

When first switching to a VoIP provider, some teams and users may struggle to adjust to the new features and interface.

Agents must learn to navigate the software dashboard and call controls, such as transfer and parking. When handling calls via the mobile app, agents may struggle to differentiate between work calls on their business number and personal calls on their mobile number.

Similarly, administrators may struggle to set up routing tools like auto attendants and call queues. While providers aim to make these tools user-friendly, it’s easy to make mistakes when designing an IVR call flow. Admins may also face a learning curve with analytics features, which typically include many customization options.

These complications are often more of a challenge with teams that aren’t tech-savvy or who have become very familiar with your previous phone system. However, with some guidance and tech support, teams typically adapt to their VoIP platform within a few weeks.

 

Requires a Stable Internet Connection

Since VoIP uses the Internet to connect calls, users must have a stable Internet connection with sufficient bandwidth at all times.

Each VoIP call generally requires roughly 3 Mbps of bandwidth. If your local network can't provide this bandwidth, calls begin to suffer with issues like latency, jitter, or dropped calls.

Most routers can easily support multiple VoIP calls at once. However, users should be mindful of their available bandwidth when sharing a network with others–especially those engaging in data-heavy activities like video conferencing, gaming, or streaming.

 

Difficulties with Emergency Location Tracking

Emergency services like 911 have a much easier time identifying your location when you make the call from a landline.

Emergency services like 911 utilize the address registered with the caller’s carrier account to help track their location. Since landline phone systems link to a single physical address, dispatchers can quickly identify the caller’s location on landline calls.

On the other hand, while businesses using VoIP register an address with their service provider, many employees don’t make calls from this physical address. Instead, employees frequently call from home or on the go, and can be based anywhere in the US. When these callers dial emergency services from an address that isn’t linked to the company’s VoIP account, dispatchers have a much harder time pinpointing the caller’s location.

 

Hidden Fees

In addition to your monthly VoIP service subscription, VoIP costs often incur additional “hidden fees.” Hidden fees cover things like state sales taxes, government expenses, and emergency 911 fees.

These fees typically end up costing about $10 monthly per user, on top of the monthly VoIP service subscription you pay your provider.

To select the best VoIP provider, look for the following in a business VoIP offering:

 

Unlimited Calling

Ensure that your choice offers unlimited calling to the countries you call most often.

While most VoIP providers support unlimited calling within the United States and Canada, some providers also support unlimited calling to Mexico and dozens of other countries. Consider the areas you call most, compare each provider’s fees, and ensure that the provider offers unlimited calling to mobile numbers–not just VoIP and landline numbers–in the countries you plan to call.

Metered calling: Teams with especially low call volumes, such as 5 to 6 calls per day, may find the best value in a metered plan, which charges by the minute. Not all providers offer metered plans, but many do.

 

Available Phone Numbers

Choose a VoIP provider that offers the phone numbers you want in your desired area codes.

Specifically, look for a service that meets your needs in these areas:

  • Phone number types: Make sure that your VoIP phone system includes not only local numbers, but toll-free numbers and vanity numbers as well
  • Phone number availability: Most VoIP providers offer local virtual phone numbers based throughout the US, and some offer global numbers. Search your prospective provider’s catalog of available phone numbers, to ensure they have plenty in your desired area code.
  • International business numbers: If you want to establish a local business presence outside of your primary location, make sure you select a provider that offers business phone numbers around the world

 

Sufficient Features and Channels

As outlined above, a VoIP solution offers much more than calling: advanced plans include routing, queuing, analytics, collaboration tools, and communication channels.

Determine which features and channels your company prioritizes most, then compare each provider’s pricing plans. Aim to find a plan that offers all the features you want, with minimal extras.

 

Ease of Use

Before choosing a provider, evaluate each system’s overall intuitiveness and ease of use. The best way to get a feel for ease-of-use is to watch YouTube tutorials and take advantage of free trials.

  • App dashboard: The user dashboard and interface should feel spacious and intuitive, making it easy to access important features. The left-hand menu should be easy to navigate.
  • Call management: Agents should be able to monitor their queues, view caller profiles, and access live call controls with ease
  • Notifications: Users should be able to easily view and organize new tasks as they come in, including queries from customers and internal communication items

 

Integrated Apps

Most VoIP phone systems support integrations that unify functionality with popular third-party software tools.

In particular, look for the following integrations:

  • CRM systems: Salesforce, HubSpot, SugarCRM, and more
  • Communication platforms: Asana, Slack, Microsoft Teams, Google Workspace

 

Call Quality

VoIP generally provides clearer audio than landline, but VoIP call quality varies based on several factors: your location, the devices you use, and your provider’s supported codecs.

VoIP codecs are the part of VoIP software that compress audio data for transmission. Older codecs like G.711 and G.729 compress a limited range of frequencies, therefore limiting call quality. More recent codecs like Opus and G.722 transmit a wider frequency range with lower bandwidth demands, thus supporting clearer call quality.

Research each option’s codecs by Google searching “[provider name] codec”. Prioritize providers that support the Opus codec, which is the highest-quality codec on the market today.

 

Uptime

VoIP uptime refers to the percentage of time that your VoIP service provider is functional and working. VoIP is generally equally reliable to PSTN landline, with most providers guaranteeing over 99% uptime across all plans. However, some VoIP providers offer 99.999% uptime on their higher-tier plans, for guaranteed connectivity year round. Before deciding on a provider, inquire about each plan’s uptime and decide if 99.999% uptime is worth the cost of upgrading to a higher-tier plan.

In our experience, we have not noticed a major difference between the 99% uptime of lower-tier plans and the 99.999% of higher-tier plans. We don’t recommend upgrading to a higher-tier pricing plan for the uptime increase unless your company deals with highly critical data that cannot withstand a few hours of downtime per year.

VoIP hardware is generally lower maintenance with far fewer equipment requirements. While on-premise PBX systems can require extensive hardware infrastructure, cloud-hosted VoIP requires almost no hardware beyond what you normally have in the office.

Let's take a closer look at different types of VoIP hardware and equipment.

 

VoIP Phones

VoIP phones–including handsets and conference phones–are the physical devices that plug into your computer and allow you to speak and receive audio. VoIP phones resemble regular landline business phones but are specialized for VoIP telephony.

VoIP phones are an optional piece of hardware, since softphone functionality enables users to make calls from a VoIP device.

 

Headphones

Headphones plug into your computer or VoIP phone, enabling hands-free communication via in-ear speakers and a microphone. Call centers and sales agents use headphones to keep their hands free during calls, for notetaking or computer usage.

 

Router

A router is a critical part of VoIP performance since it provides the local Internet connection that your computer uses to transmit audio data. Your router and local network must provide enough bandwidth for your VoIP calls, to avoid latency or dropped calls. Most household routers provide more than enough bandwidth for VoIP, but make sure the network isn’t too crowded with users concurrently consuming data through activities like streaming or video conferencing.

 

 

Your existing Internet connection quality and network bandwidth are critical in establishing consistent, jitter-free and reliable VoIP call quality.

While a VoIP service provider manages servers, data centers, and call transmission, the user is responsible for maintaining a local network with the bandwidth and speed to support VoIP calls.

For optimal calls, aim to keep latency below 150 ms and jitter below 30 ms.

To optimize your network to reduce latency and jitter, use the following guidelines:

  • Keep hardware up to date: Update your devices and ensure your router supports a VoIP network’s bandwidth. For best results, choose a router that supports WiFi 6.
  • Configure QoS settings: A router’s Quality of Service settings enable you to prioritize certain data over others when your network gets congested. This helps preserve high-quality voice-over IP.
  • Manage local data use: When multiple users share one router or local data network, the network can become too crowded for fast data transmission. Manage the number of users concurrently consuming data, especially high-data activities like streaming, gaming, or video conferencing.

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