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Business VoIP Pricing Considerations: An Overview

This article was published on March 20, 2023

If you’re a business owner, cutting unnecessary costs helps save money that you can put toward other vital goals and needs. One area where you can experience cost savings (and boost call quality) is through your business phone system. A Voice over Internet Protocol (VoIP) system could be a great solution for your business, especially if you’re growing or have virtual or hybrid employees.

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How a VoIP Phone Service Can Help Your Business

Remote and hybrid work have changed the way businesses operate. With 66% of employees working remotely at least part time, business owners have had to figure out how to adjust so customers still receive a satisfactory experience. One issue that some small and medium-sized businesses have run into is figuring out how to ensure they answer customer calls in a timely manner with fewer people coming into the office at a time. For owners, taking advantage of a VoIP business phone system is a good solution.

What is VoIP? Voice over Internet Protocol allows employees to make and receive phone calls over the internet instead of through a traditional analog phone line. Employees don’t need a desk phone to answer customers’ questions. Rather, they only need a device that can connect to the internet, such as a work laptop, smartphone, or tablet. Not only does the switch to VoIP mean fewer cables that cause tripping or fire hazards in your office, but business VoIP pricing also tends to be more affordable than traditional multi-line analog phone systems. Let’s break down some of the costs associated with VoIP.

How Much Does Business VoIP Cost?

Like with any product or service on the market, VoIP pricing for your business will vary from provider to provider. Even a single provider will charge their customers different amounts based on:

  • Number of employees using the system

  • Features selected

  • Equipment needed

Other additional fees you may have to pay include:

  • Initial setup

  • Per call (with higher prices for international calls)

Despite these variations in pricing, businesses that switch from a traditional multi-line phone system to VoIP can save 75% in operational costs, in addition to other savings. Let’s take a closer look at the costs associated with VoIP systems and differentiate between hosted and on-premises VoIP systems.

How Much Does It Cost to Install VoIP?

How much it costs to install VoIP will depend on whether you choose to have your system hosted or on-premises. If you elect a hosted option, it means that your provider will keep your software on their servers. If you choose the on-premises option, on the other hand, it means you’ll have your VoIP software on your own servers. The latter requires more work to set up — for example, it costs about $1,000 on average for a technician to get everything installed, set up, and configured. The hosted version typically doesn’t have those costs. However, should you opt to go the hosted route, you will have to pay a subscription fee, usually determined by how many users you have on your plan (more on that later).

In addition to the installation costs associated with the on-premises VoIP system, you will also have to pay for:

  • Software licenses. These may cost as much as $4,000 upfront for 20 people.

  • Ongoing maintenance costs

No matter where you choose to host your VoIP phone service software, you will also have to pay for the equipment needed if you don’t already have it. You will need:

  • High-speed internet

  • Devices that can connect to the internet

  • A VoIP adapter if you want to use traditional phones

  • VoIP headsets (if you want them)

If you want to purchase VoIP phones, they typically cost $3,000 for 20 phones. Note, though, that purchasing these phones is not necessary if you already have devices that can connect to the internet. All you need to use these “softphones” is your provider’s app. Also, you may elect not to purchase VoIP phones if you have several employees who work remotely.

Additional equipment you’ll need should you choose to host your own VoIP software can include:

  • A server, which allows you to make and receive calls to phones not using the internet

  • A battery backup to keep your phone system running should you lose power

  • Switches to connect routers to the devices you’re making calls from

  • Routers to make and receive calls via the internet

This equipment typically costs around $6,495 during installation and setup.

How Much Does a VoIP System Cost Per User?

If you have a hosted VoIP system, you’ll pay a monthly subscription fee per user on your plan, typically ranging from $20-30. If you add any features to your plan, you’ll notice that you have to pay for them on a “per user” basis as well. Some providers may drop the subscription or feature costs the more users you have on your plan.

On-premises systems that use VoIP don’t require a subscription fee. However, you will have to purchase enough software licenses for each of your users. As mentioned above, these typically cost about $4,000 for 20 users, which breaks down to $200 per user.

Do VoIP Calls Cost Money?

Whether you have to pay any VoIP call charges will depend on your phone plan. Some providers offer a pay-by-call option for their most basic phone plan. It works better for businesses that receive few calls or have few employees.

Hosted VoIP systems typically include unlimited domestic calling with a subscription to their services. You will have to pay fees for any international calls you make. If a customer calls you internationally, then they will be charged for that call. If you expect to receive a lot of international calls, you may want to consider setting up an international phone number. Doing so will allow customers to call you without having to pay a fee. And adding a toll free phone number will allow customers from the United States and Canada to call you without charge.

Are There Any Free VoIP Services?

Free VoIP services for personal use do exist, but there aren’t many free VoIP business service phone service options. You may have heard of small and medium-sized businesses relying on Facebook Messenger or WhatsApp for communication between employees or between employees and customers, but these options don’t offer everything you need for effective, efficient communication with your customers.

Some features that make for smoother, quicker customer service that free versions don’t offer include:

  • Call Hold: Not only can you place customers on hold as you look for answers to their questions with this feature, but you can also set it up so that they hear music while they wait or can hang up and receive a call back from you.

  • Follow Me: This feature is great for employees who work in a hybrid environment. It allows them to answer work calls on their cell phones if they are away from their desk. With this feature, you can forward calls to your cell phone if you don’t answer your desk phone after a set amount of time. If you don’t answer your cell phone, either, the call will go to voicemail.

  • Simultaneous Ring: Have an incoming call ring as many as five different phone numbers simultaneously to ensure you miss fewer customer calls. Any calls that do go unanswered will be sent to voicemail.

With Unified Communications as a Service (UCaaS), you have access to even more features to improve your customer service. Companies like Vonage combine voice, video, chat, messaging, and contact centers into one service so that you can do all your communicating among employees and customers in one place. Additional features you can pay extra for through Vonage’s UCaaS include:

  • Business SMS and MMS: Send texts to and receive them from customers and colleagues as a quicker, easier option in some cases.

  • On Demand Call Recording: Not only can you start and stop recording at any point in a conversation with this feature, but you can also send recordings to yourself or colleagues as needed. These recordings are password protected.

  • Virtual Receptionist: Once you set up a preconfigured menu, customers will hear it when they call your business and can answer prompts to route calls appropriately based on working hours and holiday schedules.

While your first instinct may be to choose the cheapest VoIP phone system option over a more expensive one, remember that a smoother customer experience may mean paying for some features. When you have happier customers and employees and smoother workflows, paying for these features is worth it. Plus, even VoIP services you have to pay for typically cost less than traditional multi-line phone systems.

Why Should My Business Switch to VoIP?

Aside from the money you could save by switching from an analog phone system to VoIP, other reasons you should switch to using a VoIP phone system include:

  • Keeping customers happy. With a VoIP system, you can allow customers to get through to an employee quicker and more efficiently than with an analog phone system, particularly for businesses with hybrid or remote employees.

  • Working from anywhere. Because you only need an app to connect to your VoIP system, you can make and receive calls no matter where you’re working from. And if you can’t take a call, you can easily transfer it to another employee.

  • Easily scaling up operations as your business grows. If you were to add phone lines to your traditional multi-line phone system as you hired more employees, you would need to purchase more hardware and possibly even get more phone jacks installed and set up. With a hosted VoIP system, you only need to contact your provider to get more lines added. And, if you decide that you need more features to make operations flow even smoother as you grow, you can easily add those features onto your plan.

  • Needing less equipment. Say goodbye to the days of tripping over cables or figuring out where to store everything you need for your phone system to work. All you need for your VoIP is an internet connection and devices that can connect to the internet.

  • Communicating with more clarity. As long as you have a broadband, high-speed internet connection, VoIP calls provide better quality, so both your employees and your customers can hear each other without having to constantly repeat themselves.

  • Relying on a solution that works. Worry about fewer outages with a VoIP system. For example, Vonage provides 99.999% uptime reliability, based on averages from July 2021 through February 2022.

The way businesses operate is changing. Your phone system should, too, to fit the needs of both your customers and your employees.

Who Provides VoIP?

If you want a reliable VoIP provider that offers all the features you need to easily scale up operations and satisfy your customers, then turn to Vonage. No matter what you need in your phone system, we’ve got you covered. Over 100,000 businesses around the world trust us with their phone system. No more looking to multiple providers for solutions — your plan and features will be in one place for easy access.

Want to learn more? Check out our pricing plans. We’re ready to do business with you.

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