The 10-Minute Guide to Buying a VoIP Phone System


You don’t need to know all that much about Voice over Internet Protocol (VoIP) systems in order to make a smart decision about using one for your business.

Don’t get us wrong, you can get super technical with it if you want to—and we’ve even got some in-depth VoIP information for you if that’s what you’re into—but most of the things you need to know before pulling the trigger on your own VoIP system are straightforward.

A VoIP Phone System is Software

The first key thing to understand is that a VoIP system is software and not a physical item or device—it runs on computers, smartphones, and everything in between.

Traditional landline telephones rely on physical copper wires to transfer data. They also usually come part and parcel with physical handsets and conferencing systems that require installation and maintenance.

VoIP does away with all of this.

Instead of copper wires, VoIP data is transferred wirelessly over the internet in the form of digital data packets. Once these packets reach the person you’re calling, they’re reassembled back into an analog audio signal.

VoIP also provides a series of advantages over traditional phone technology:

  • It’s more cost-effective since there’s no hardware or equipment to install
  • It’s more flexible, as users don’t have to be in a fixed location
  • It supports advanced features like video conferencing and voicemail-to-email transcription
  • It’s scalable and integrates easily with existing software.

On top of all that, most VoIP providers also make transitioning from a landline easy by including familiar UX and UI elements, such as the standard numerical keypad.

Screenshot of Nextiva App with the VoIP phone shown.

Can You Manage a VoIP Phone System Yourself?

We don’t really recommend managing and running a VoIP phone system in-house unless you have a dedicated team of IT professionals who know the ins and outs of the VoIP ecosystem. Even though there’s no associated hardware or physical installation, VoIP systems can still be a bit of a hassle.

For instance, your in-house team will need to:

  • Complete the initial software setup and configuration
  • Adjust your network’s quality of service settings for optimal call clarity
  • Conduct regular software updates
  • Troubleshoot unexpected technical issues
  • Manage user accounts, phone numbers, and call routing configurations
  • Maintain top-quality security protocols to prevent hacks and data leaks.

If you’re like most people, you won’t exactly be salivating at the thought of dealing with these concerns—or hiring the people who otherwise would be.

The reality is that most businesses, including big ones that have more than enough in-house resources, generally choose to subscribe to a hosted VoIP system.

Benefits of a Hosted VoIP Phone System

The main upside of a hosted VoIP system isn’t just the fancy new features—it’s the offloading of potential headaches from maintenance and security concerns.

Maintenance Concerns

All the VoIP responsibilities that would otherwise need to be dealt with in-house can be passed off to a third-party VoIP provider.

This includes software updates, account management, call routing, and quality of service adjustments—all taken care of for you by a team of experts who specialize in these types of setups.

Security Concerns

Another thing to consider is that a hosted VoIP phone system doesn’t just benefit you. It also benefits your customers. When a security breach occurs, it’s often your customers who are at risk, given how their private information might be on the line.

Third-party VoIP providers specialize in the highest quality call security and encryption—after all, it’s part of their job.

Cutting Edge Features

There are plenty of advanced features that come along with hosted VoIP systems. Most notably, hosted VoIP providers usually have sleek front-end interfaces that make adding users and updating company contacts incredibly easy.

Additionally, with a hosted VoIP system, users can make calls and send messages from any device that’s connected to the internet as long as they sign in to their personal account. This is a total game changer for both remote employees and traveling employees.

Since businesses are always changing and evolving, these features are becoming must-haves.

How Much Should a VoIP Phone System Cost?

All things considered, hosted VoIP phone systems can be surprisingly inexpensive.

VoIP Costs for Small Businesses

For a core setup, including instant messaging as well as audio and video calling, you should expect to pay between $20-$30 per user per month.

For small businesses with 10-20 employees, these core features may be all that’s necessary—and that means that switching over to VoIP from your landline will probably result in some hefty savings.

VoIP Costs for Large Businesses

If you’re looking for a hosted VoIP system for a bigger corporation, you may need an enterprise-level solution. The good news is that once you reach such a large scale, most hosted VoIP providers change their offerings from per-user pricing schemes to a flat monthly fee.

For a maxed-out VoIP system with conference calling and every other advanced feature you could imagine, don’t expect to pay anything less than $500 per month. If you’re dealing with sensitive information such as patient data and need additional security measures to comply with HIPAA requirements, you could end up paying well over $500.

Additional VoIP Costs

It’s important to realize that the sticker prices don’t always tell the full story.

First of all, many VoIP providers will charge you different monthly rates if you pay month-to-month as opposed to annually. If you’re not looking to pay a lump sum for 12 months at a time, those monthly differences can cost you some significant cheddar.

Also, most businesses—even after deciding to switch to VoIP—still prefer to equip their employees with physical phones at their desks. Though these VoIP phones still cost much less than a full landline system, they’re not exactly cheap—think $60 per phone at the lowest and up to $1,000 at the highest.

Lastly, after switching over to a VoIP system, many businesses find their internet speed to be sorely lacking. This is because a landline uses copper wires, whereas VoIP leeches off of your existing internet network.

Depending on how many users will be on your VoIP system, you may need to upgrade your internet speed—and this is yet another external cost. This is also a great reason to run a VoIP quality test before you decide to purchase from a provider.

Basic VoIP Phone System Features

Many providers offer different features at different tiers of service. Here are some typical features you can expect from a basic, small-business VoIP provider.

  • Call routing and forwarding: This is a basic feature that allows you to direct incoming calls to specific extensions and/or departments in your company. Call forwarding lets you redirect calls to another number entirely, like to a remote employee’s mobile phone number.
  • Conference calling: This feature allows multiple employees to join the same audio or video call. It’s an extremely important feature for team meetings, collaboration with remote colleagues, or brainstorming sessions.
  • Caller ID and contacts: While caller ID is a basic feature of most landlines, internet account-based contacts are unique to VoIP. Universal contact information for unfamiliar employees from different departments can easily be found via keyword search when all employees operate on the same shared contact database.
  • Call waiting: If you’re currently on the line with someone and you get a new incoming call, call waiting will give you a notification. You can choose to ignore the new call or place the current call on hold to pick up the new one, but either way, it’s much harder to miss important calls.
  • Call logs: Most landlines feature basic call logs, though modern VoIP providers do so in a much more digestible and interactive format. You’ll be able to keep track of who called you, when they called you, and choose from a few quick-action options, such as calling back now or marking for a later follow-up.
  • Voicemail-to-email transcriptions: New VoIP systems can integrate with your email, allowing voicemails to be automatically transcribed and sent to your inbox in text format for reading at a later time.

Small business offices, retail stores, home-based businesses, and startups benefit most from VoIP providers with these basic features.

For example, call waiting and voicemail-to-email transcriptions can be especially helpful to receptionists who are constantly dealing with customers over the phone and in person.

Likewise, the caller ID and universal contacts features can be essential for retail stores, as employees may need to make calls to obscure off-site locations or managers with whom they have never spoken.

Advanced VoIP Phone Systems

Once your business reaches a certain size or complexity, basic VoIP systems can be stretched too thin. Though pricing usually moves from a per-user basis to a flat monthly fee at this point, the inherent per-user price can still go up as this happens.

The good news is that these price increases are usually compensated by corresponding upgrades in the VoIP system’s capabilities. In general, there are three complex business types for which a proper VoIP system can rise to meet that occasion: call centers, omnichannel contact centers, and enterprises.

Call Center VoIP Systems

Call centers receive a high volume of incoming calls on a daily basis—and since most of these calls are directly from customers, each and every one of them needs to meet quality standards.

The following features are five of the most essential for a call center VoIP system:

  • Automatic call distribution: This feature intelligently routes customer calls to the most appropriate available agent based on various criteria such as skill level, priority, or customer history.
  • Interactive voice response: This isn’t the most fun feature to deal with when you’re a customer, but sometimes it’s necessary for call centers to use voice prompts and keypad entries to guide the caller through options before connecting to an agent.
  • Call recording and monitoring: Call recording is necessary for monitoring the performance of customer service agents and making sure they adhere to regulations. If you care about tracking, this is pretty much a must-have for any call center VoIP system.
  • Real-time analytics and reporting: Many modern VoIP systems feature the ability to monitor calls remotely as they’re happening.
  • CRM integration: Customer relationship management software keeps all of your customer information in the same, easy-to-access place. A VoIP system integration with existing CRM software can save huge amounts of time.

In particular, automatic call distribution and real-time analytics usually provide the most benefit for call centers.

For example, since the VoIP system uses existing system data to find the best customer-to-agent match, automatic call distribution saves time on both the company side and the customer side. This means agents aren’t scrambling to transfer calls, and customers aren’t waiting 15 minutes just to have a simple question answered.

Meanwhile, these systems can also prioritize high-value customers, route technical inquiries directly to specialists, and balance out call distribution to minimize idle time for agents.

As for real-time analytics, this feature allows call centers to make snap decisions based on data that would otherwise fall by the wayside. For example, since the VoIP system gives supervisors immediate insight into ongoing calls, they can adjust internet settings and reallocate resources to optimize call center performance anytime something unexpected happens—like a huge surge in call volume.

Omnichannel Contact Centers

Omnichannel contact centers are like call centers on steroids. They usually serve the same purpose of customer service, but customers can reach the center through several different channels, including email, text messages, social media, and phone calls.

This means omnichannel contact centers need the same features as call centers, along with additional integrations and unifications.

  • Unified communication channels: An advanced VoIP system for omnichannel call centers will have a built-in mechanism or interface for unifying all the different types of communication in one place.
  • Multichannel customer history: If a customer calls about a problem and then follows up later via email, agents should be able to read the email and put two-and-two together so they can pick up where they left off. This is only possible with a multichannel customer history trail.
  • Real-time cross-channel analytics: As with generic call centers, omnichannel contact centers can benefit greatly from a VoIP system that allows real-time monitoring of performance for every type of communication channel.
  • CRM integration: VoIP integration with existing CRM software can be just as important for omnichannel contact centers as it is for standard call centers.

Multichannel customer history is an especially important feature for omnichannel contact centers. Agents always need to be aware of the full context of past customer interactions, and this becomes much harder when a given customer may have contacted them in the past via four or more different channels. Usually, advanced VoIP systems will come with a built-in softphone interface (like Microsoft Teams or Nextiva), which makes pulling up full customer histories intuitive and simple.

Similarly, since customer relationship management software is the backbone of any customer service agency, omnichannel contact centers can really benefit from an integration with CRM software. If your company is looking to switch from a landline to a VoIP system, a smooth integration with existing CRM software can eliminate another decade’s worth of headaches.

Enterprise VoIP Phone Systems

Compared to other types of businesses that focus mainly on agent-customer communications, enterprise VoIP phone systems need to meet the intense demands of business communication from employee to employee.

To that effect, there’s a different set of advanced features needed to optimize VoIP properly for this environment.

  • High scalability and flexibility: Enterprises everywhere are constantly evolving. That’s why it needs to be easy to add and remove users at the drop of a hat. This is an essential feature for any enterprise VoIP solution.
  • Advanced security measures: Since enterprises are often dealing with big-name clients with confidential information, VoIP security measures must also be top-notch.
  • Quality of service: VoIP phone systems in enterprises are often going to be stretched to the max, as some corporations have thousands of employees all working together in the same building. These VoIP systems must come with adjustable settings for prioritizing different types of internet usage at different times.
  • Customization and integration: Though a standardized VoIP package might work fine for small businesses with only a few employees, large enterprises need VoIP systems that are tailored to their specific industries—and the needs across industries vary greatly.

Depending on the nature of the business, many enterprises deal with extremely high employee turnover rates, as well as surging profits and resulting company growth. In all of these scenarios, the ability to upgrade an existing VoIP system from one level of service to another, as well as the ability to add and remove new users, is paramount.

Additionally, enterprise-level VoIP systems can generally be configured to handle massive user loads, which means enterprises will never have to worry about hitting the proverbial ceiling and having to switch to a new provider.

Furthermore, many enterprises—especially in the medical industry—deal with extremely private information that needs to be protected not only to keep customers happy but also to comply with strict governmental regulations like HIPAA. The right enterprise VoIP system will come with the highest quality security measures—features like encryption and automatic intrusion detection.

This is a perfect example of a situation where an in-house VoIP system could not hold a candle to a hosted VoIP service. The level of security provided compared to the price paid makes it basically a no-brainer.

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