How VoIP Service Can Lead to Cost Savings for Small Businesses

Is your business paying too much for an outdated phone system? Is there something better out there that has more features and flexibility, as well as a lower price tag?

If it’s been a while since you’ve looked at your phone system, or you’re starting a new business and need a way to communicate both internally and externally, then it’s time to take a look at VoIP.

Short for Voice over Internet Protocol, VoIP is a technology that allows you to make and receive phone calls via the Internet. This is a massive shift from traditional phone systems that rely on outdated hardware and aging infrastructure. As the Internet has become more ubiquitous, VoIP has grown more sophisticated and robust. It’s also almost always less expensive than a traditional phone service.

In this article, we’ll explore how VoIP phone service is leading to cost savings for small businesses.

Lower Long-Distance Bills

Companies that switch to VoIP get an immediate reduction in their long-distance calling fees. Because voice calls are placed over the Internet and don’t require the infrastructure of the PSTN (Public Switched Telephone Network), the cost to make a phone call is minimal.

Unlike the PSTN, which requires a network of cables, wires, and satellites to function, VoIP just needs a phone with an Internet connection and a reliable Internet service. The process of calling someone located down the street is pretty much identical to calling someone on the other side of the country. As a result, long-distance fees are minimal and sometimes non-existent.

In an effort to remain relevant, traditional phone companies sometimes bundle their rates to include long-distance calling. However, all this does is camouflage the charge. Rate plans with a VoIP provider are almost always going to be less resulting in significant cost savings.

If your business makes international calls, you’ll also realize considerable cost savings. Depending on your VoIP provider, rates can be dirt cheap.

Lower Teleconferencing Expenses

VoIP does more than allow you to make calls over the Internet. Even the most basic VoIP providers tend to include videoconferencing capabilities at no extra charge or for a minimal fee. So, instead of paying for a separate service to have team meetings or chat with clients, you’ll be able to use your existing VoIP system.

Even if you’re not engaged in three-way calling or video conferences with your clients, this tool is helpful internally as well. Instead of endless email threads or trying to get everyone in a meeting room at the same time, you can easily collaborate on a conference call.

Ditch the Answering Service Fees

Do you know how much it costs your business if you miss a phone call?

Let’s say your receptionist goes to lunch or takes a quick restroom break, and your phone rings. Who answers it? For most small businesses, the call goes to voicemail or an answering service. But with VoIP, the calls can be forwarded to a mobile phone. Some advanced services also offer missed call texting. This feature sends an automatic, immediate text message whenever a call goes unanswered.

Because every phone call is an opportunity, missing even a single call can adversely affect your bottom line.

Before you dismiss the phone as an unimportant (or outdated) form of communication, consider the following statistics:

59% of consumers still use the phone as their primary and preferred form of outreach when they need a quick answer. While 61% of callers on a mobile phone are ready to buy.¹ If you miss that phone call, then you most likely missed having that caller become a customer.

Approximately 85% of people who don’t reach someone on the first try won’t bother calling back again.² You can easily calculate how much money you’re losing by not answering the phone.

1. Determine how much a new customer is worth.
2. Find out what percentage of callers become customers.
3. Then, do the math. Let’s say that a new customer is worth $500 and 30% of the people who call your business become customers. If you miss 50 calls a month, then you’ve lost 15 customers at $500 each for a total of $7,500 in missed revenue per month!

Those missed calls can also cost you in the long run. Not answering the phone (or at least readily attending to someone with a text) leaves your customers with less than stellar service. This could affect your ability to win referrals, and it could also harm employee morale. Low morale results in higher turnover, costing you your best employees and burdening your business with additional training fees.

A system that has an auto-attendant, routes calls, and missed call texting functionality can virtually eliminate these problems.

Increased Productivity

Do you know how much time your employees spend playing phone tag? According to one study, it’s 32 minutes per day per employee.³ By having a VoIP system that allows for call distribution, forwarding, voicemail to email transcriptions, and missed call texting, your employees can communicate with each other and your clients in real-time.

To calculate these cost savings, all you have to do is determine how much you pay each employee for 32 minutes of their time and multiply that figure by the number of employees you have. This amount can add up!

In addition to ending the phone tag game, you’ll also see a rise in productivity because your employees can still communicate even when they’re not in the office.

Yes, while it’s true that the proliferation of mobile phones already allows this capability; however, it’s only with a VoIP system that smartphones can be connected to your office. Therefore, if an employee needs to reach a client or patient when they’re not in the office, they can call from their mobile phone and still represent your office’s telephone number. This protects your employees’ privacy while also conveying a professional message.

No and Low-Cost Customization

A traditional phone system can be a beast to manage. Any time you want to add features, increase the number of users, add phone lines, or implement other “extras,” you would need to hire an on-site technician or have an IT professional on staff.

With VoIP, you can do all of this and more using a simple web interface or a mobile app. Anyone on your team can make these changes at any time.

Lower Equipment Costs

Phone systems can require complicated and expensive equipment. A VoIP system requires limited equipment, and, in some cases, no equipment. For example, if you choose a hosted VoIP solution, then the provider will provide all of your infrastructure. All you would need are phones and an Internet connection.

Even if you don’t choose a hosted VoIP service, your equipment fees are still minimal compared to a PBX system. As long as you have a router, enough bandwidth, IP-enabled phones, headsets, and adapters, you’re in business.

Decreased Set up Costs

VoIP systems are surprisingly easy to set up and implement. In some cases, you’ll have zero downtime as you switch over or upgrade your system. Compare that to a traditional phone system, which can cost upwards of $20,000 to set up and requires days or weeks of preparation.

Less Expensive to Scale

What happens if your business grows and you have to hire new employees or move into a new building. Adding phone lines with a traditional system can be a hassle and an expensive endeavor. And, if you decide to move to a larger building, then you’re going to need a brand new PBX install, which is a significant undertaking.

With VoIP, your phones are not location dependent, and you can add as many users as you’d like, often for little or no additional fees.

Eliminate the Expense of Rollover Lines

Businesses with traditional phone systems have to find the ideal balance between the number of phone lines they want to pay for and how many they need to do their business. Let’s say an organization has five employees. Very rarely, if ever, will all five employees be on the phone at the same time (unless they work at a call center or an equally phone-intensive environment).

So, the company would probably be throwing money away by having five separate phone lines. They may decide that two phones are sufficient, but what happens when two employees are on the phone and a new customer is trying to call your office? They’ll get a busy signal. The way to overcome that scenario is adding even more phone lines, but that gets expensive. A less expensive alternative is a VoIP system, which allows one phone number to take multiple calls. Instead of the limiting factor being the number of phone lines, businesses can now handle as many calls as they have phones.

Conclusion

There are clear-cut cost savings to using VoIP phone service, and there are also savings that are more difficult to measure, but equally important to the success of your business. If you’re thinking of switching to VoIP, schedule a demo with Weave today.

Notes:

1. https://hbr.org/2017/07/your-customers-still-want-to-talk-to-a-human-being
2. https://www.prnewswire.com/news-releases/vonage-research-reveals-ivr-horror-costs-businesses-262-per-customer-each-year-300925404.html
3. http://www.infranetgroup.com/wp-content/uploads/2014/07/introtouc.pdf