The digital upgrade

What is a VoIP phone - everything you need to know

Posted by Shweta Raina

The future of business communications will be digital. However, many small and micro-sized businesses may currently still be using the same landline phone services they've had in place for many years. This is a situation that will need to change sooner rather than later, as these solutions won't be around forever.

In fact, the UK's legacy landline network is being switched off in 2025. As a result, firms that are still reliant on this technology will need to find more modern alternatives in good time before this date in order to keep operating and avoid the panic of any last-minute decision-making. And for many, the best solution will be migrating to VoIP phone systems.

But a VoIP phone offers much more than just a futureproofed communications solution. It also provides businesses with a range of additional features and services to help streamline their systems, better keep in touch with customers, and boost productivity.

Small businesses, freelancers and startups in particular can benefit from these capabilities to help them level up their operations and compete on an equal footing with their larger and more established counterparts. This can be especially the case if VoIP phones are combined with other services such as fibre broadband to provide a complete, up-to-date communications platform.

But first, it's important to understand what VoIP is and what it can offer your business.

What is a VoIP phone and how does it work?

If you are thinking of upgrading your telephony solutions from a legacy landline, a VoIP phone is a great option. This can give you a wide range of advantages, from lower costs to higher-quality calls and more features. This enables even the smallest firms to project a highly professional image in their communications and stand alongside larger competitors.

What exactly is a VoIP phone and how was it created?

VoIP is short for Voice over Internet Protocol, and it's a method of transmitting phone calls using the same digital data infrastructure used for internet connectivity. You may also hear it referred to as internet protocol, IP, telephony or cloud hosted telephony, but it all uses the same technology.

It's been around for a while, with commercially available services going back to the mid-90s, but as internet technologies have advanced with high-speed fixed and mobile broadband, the solution has become much more practical and reliable for home and business users alike, enabling the use of high-definition (HD) services with no lag, stuttering or other loss of call quality.

How does a VoIP phone work?

When a phone call is made, a VoIP solution takes analogue audio signals and converts them into packets of digital data that are sent over data lines such as broadband connections.. Behind the scenes, these are routed to ensure they take the shortest path to their destination, allowing users to enjoy a seamless conversation. 

As a result, users are no longer tied to a fixed landline at their desk. Instead, a VoIP call can be made from any device able to connect to the internet. This means that as well as using traditional hard phones with VoIP capabilities, a VoIP call can be made from a desktop or laptop PC or a mobile device such as a smartphone, using either a Wi-Fi or mobile data connection.

Who most often uses a VoIP phone and why?

Any business that needs to connect with customers via voice should consider using a VoIP phone provider. For many firms - especially smaller enterprises looking to foster a direct, personal connection - VoIP phones offer a cheap, reliable and mobile solution.

A study conducted by handset manufacturer Snom found that UK firms are shifting to VoIP solutions at a fast rate. For example, in 2019, more than a third of UK small and medium-sized businesses made the switch from fixed landlines to hosted phone services - the highest rate in Europe. 

When asked why, almost two-thirds (64 per cent) named reduced costs as the biggest benefit, ahead of increased mobility and improved call quality.

Working remotely? Use any device anywhere!

Desktop

  • Make business calls from your computer
  • Available for Windows and macOS
  • Sync contacts from your mobile
  • One-click call audio & video meetings

Mobile

  • Superior call quality & HD voice
  • Available on iOS & Android devices
  • Powerful call controls in your hand
  • Join meetings from anywhere
  • Never miss a call

Features of a typical VoIP phone

There's much more to VoIP phone calls than reduced costs and HD voice calls. The technology also offers a wide range of additional features that can give small and micro-sized firms a significant boost.

What are the most important aspects of a VoIP phone system?

Among the main advantages of a VoIP phone system is its cost savings. While estimates about the exact benefits may vary business-to-business, some research has suggested small firms can enjoy savings of around 50 per cent compared with a traditional phone system. 

However, for some businesses, especially heavy users and those making frequent international calls, this could rise to as much as 90 per cent.

A VoIP phone system is also a great option for startups, as it's very easy to set up. Traditional landlines can cost hundreds, up to thousands, of pounds to install the necessary phone line equipment, whereas VoIP providers can simply plug in their phones and be up and running in a matter of minutes.

You can also choose your number, which can offer several advantages for a small firm. For instance, some companies may want a geographic number to emphasise to customers that they're a local firm with a connection to the community. On the other hand, others prefer a national or London VoIP number to appeal to customers and compete with larger businesses - and this is also possible with a VoIP service.

What additional features are available for VoIP phone systems?

Beyond this, there are a number of common VoIP features that will be hugely useful to small firms. For example, users of this technology can enjoy capabilities such as:

  • Call forwarding
  • Call menus
  • Queuing
  • Call recording
  • Reporting analytics
  • Video meetings
  • Customised greetings

These can all be used to help make incoming calls more efficient, keep businesses aware of their performance, and provide the high level of service customers expect.

How do VoIP phone features enable a quality of life improvement?

These features promise to make life much easier for both employees and customers. For example, the inbuilt call routing, queuing and menu features ensure that callers can be directed to the right person quickly and easily, without having to be passed around to different people.

In the new working environment, where some staff members may be working remotely some or all of the time, these features ensure they're reachable wherever they are, eliminating excessive hold times for customers.

These features translate directly into better business performance. For instance, according to Cisco, the call routing features of VoIP can improve productivity by up to 77 per cent, while using the technology's conference call capabilities boosts user efficiency by 65 per cent by ensuring employees are able to connect more easily with each other and meet without interruption.

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Who should consider using a VoIP phone?

VoIP technology should be a primary option for any small business looking to modernise its communication system and better serve customers.

Whether you're a single trader or freelancer needing to get up and running quickly, or a growing enterprise that needs to connect new phone numbers to your system to support their expansion, a hosted VoIP phone service should always be part of your thinking when looking for a new communications solution.

What sort of businesses may benefit most from using a VoIP phone system and why?

The fact VoIP phones can be used from anywhere may be especially useful to entrepreneurs or contractors who are frequently on the move. This allows them to be contacted on a single landline number wherever they are, without having to ask customers to cover the cost of dialling a mobile, for example.

Because a single number can be shared across multiple devices, they're also a great solution for small businesses looking to embrace trends such as hybrid working. As they can access their phone on the same number at home or in the office without having to reroute calls.
Growing firms that expect to make a high volume of calls - for example those with outbound sales personnel - can also greatly benefit from the cost savings that VoIP phones can provide. Being cheaper than legacy landline calls or a mobile phone contract, this offers a cost-effective way to connect with customers and grow a business.

How can you tell if a VoIP phone system is right for you?

VoIP phones may not be the only options for small businesses or freelancers, but they may be the best combination of low costs, high reliability and advanced features. However, if you're still considering whether the technology's right for you, ask yourself these key questions:

  • How much am I currently spending on phone calls? If this is taking up a large part of your outgoings, the savings VoIP can provide make a big difference to your balance sheet.
  • How many users will need connectivity? A single VoIP line is easy to set up, but if you're a growing business, the ability to add new connections quickly is highly useful.
  • What features do I need? If tools such as conference calling, recorded messages or analytics are required, VoIP is often the solution. Some features may also be a requirement rather than an optional extra. For example, if you're in a regulated industry, capabilities such as call recording may be essential.
  • Are you working remotely? Whether employees are out meeting customers or working from home, they'll need to be easily contactable at all times, and VoIP can offer a much cheaper solution than relying on mobile contracts.
  • What's my broadband speed? A dependable broadband connection is the only real requirement for a VoIP phone solution. If you don't have this, a good VoIP provider should be able to offer a great VoIP and broadband bundle.

Choosing the best VoIP provider

Making the move should be fairly straightforward. But there are still a few steps you should go through first to determine what you'll need and if there will be any other upgrades you'll have to make in order to ensure the transition to internet phones is as easy as possible.

What to look for in a VoIP supplier

Choosing the best small business VoIP provider is a big decision, so it's vital to take your time and draw up a list of the key features you'll need. While cost is important, it shouldn't be the only thing you consider when making your choice. Other factors to take into account include:

  • Reliability - How will your chosen provider ensure you receive a quality service at all times, and what steps will they take if there is disruption?
  • Ease of use - Look for a service that's designed with small business owners in mind, not IT professionals. This is especially important for companies that lack technical expertise in-house.
  • Extra features - Some providers may offer little more than an internet voice communication tool. However, capabilities such as call routing, video conference calls and recorded messages all help your business appear more professional and appealing to customers.
  • Third-party integrations - Being able to connect your VoIP system to essential business apps such as G Suite, Salesforce, Office 365, instant messaging platforms and more can be hugely useful for small firms. This can turn your solution into a unified communications platform to further boost efficiency and productivity.
  • Contracts - It's important not to get trapped in a lengthy contract that will be expensive to exit or modify. Short-term deals and the ability to scale up services as your business requires will be vital for firms in fast-moving sectors.

Want to know more about what VoIP could do for your business? Get in touch with bOnline today.