Differences between virtual numbers and extension phone numbers

Virtual phone numbers and extension phone numbers share the same core purpose — to route calls to a specific endpoint. However, they function quite differently.

• Virtual number: A virtual number is a software-based phone number tied to an IP address rather than a physical phone line. When calls are made to the number, it’s forwarded to the device associated with the IP address. Employees can make and receive calls via VoIP business phones, as well as desktops and mobile devices, without location restrictions.

• Extension: Extensions are add-on numbers integrated into the core of your main telephone system and have no association with IP addresses. Unlike virtual phone numbers, extensions are typically free, although there may be limits to how many you can have on each line.

How to add an extension to a phone number

With the right provider, you can add an extension to a phone number in a few simple steps. Here’s how you can do it with Vonage Business Communications:

1. Sign in to Vonage Admin Portal as an administrator or super user.

2. Click on the Store section and click Extensions.

3. Choose the type and volumes of extensions you want and click Add.

4. Navigate back to the Extensions page and click the Pencil icon.

5. Click Devices and then Add Device.

6. Complete all of the required fields.

7. Click Save.

With Vonage, you can also use the admin portal to set extension rules, assign/unassign extensions, and reset/remove extensions.

How to dial an extension telephone number

Phone extensions are designed to make dialing and connecting to the right person more efficient for employees and customers alike. However, dialing a telephone extension internally is a little different than dialing one externally.

Internal calls

For internal calls (i.e., calls within your company), employees only need to dial the extension number to connect. For example, if your colleague Ashley Smith were assigned extension number 112, you’d simply dial that number if you wanted to call them directly.

Large companies might assign extensions to departments as well as individuals. So, if you worked in a different department than Ashley, you’d dial the department extension number followed by the personal extension number, which might look like this:

111 (department extension) + 112 (individual extension).

External calls

Anyone making external calls (i.e., inbound calls from third parties like customers and suppliers) will need to dial extensions a little differently. The caller would dial the main company number and, once they’re connected, proceed to dial the extension number when prompted. This routes them straight to the right person or department without having to wait to be transferred by a receptionist.

VoIP phone systems use virtual receptionist features to route incoming external calls. For example, if customers don’t know the telephone extension number of a department, Vonage Virtual Receptionist can direct customers to the right place using an interactive menu. This reduces call transfers and wait times while boosting productivity for live agents.

How are calls routed to a phone extension?

So, we understand that calls are routed to a specific place once the extension is dialed. But how exactly does this call routing work on a practical level?

First and foremost, calls are routed according to your call directory. A call directory is similar to a traditional phone book, in that it tells the caller the extension number for every department or person in your business.

It can be added to your IVR menu for internal and external calls or provided to employees in their online portal so that they can quickly look up the extension they require.

Set up dialing rules for callers

Individual users might wish to set up dialing rules to ensure that they never miss a call. To do this, they’d employ call forwarding, a feature provided by most VoIP business communication solutions.

Say your marketing manager is a hybrid worker. They have a desk phone and computer at their office desk, as well as a laptop, business phone, and softphone for when they’re outside of this office.

To suit their flexible schedule, they might use call forwarding to route incoming calls to specific extensions in a set order. So, the call might be sent to their office phone first and then to their remote business phone if there’s no answer, and so on.

Other options include forwarding calls to a group of extensions (such as team members’ extensions), routing calls to specific extensions based on the date, time, or caller ID, or setting calls to ring simultaneously across all devices.

Set up dialing rules for departments

Setting custom dialing rules for specific departments can help you develop a consistent call flow that maximizes efficiency.

For example, employees only call HR departments for specific, often sensitive issues, such as raising complaints or disclosing potential discrimination. Here, it makes sense to route all incoming external calls to your HR manager, followed by the assistant manager if the HR manager is unavailable. This is known as sequential routing.

By setting dialing rules, you ensure that employees get access to the most appropriate person, while guaranteeing that other employees aren’t receiving calls they’re not trained to handle.

Establish dialing rules for teams

For teams that receive high external call volumes, such as customer service teams, tech support, and sales teams, there are a range of different dialing rules that you can establish to increase efficiency and productivity.

For example, round-robin routing distributes calls evenly to extensions according to a predetermined order. So, if Agent A is first in line, they’ll receive the first call. The next call to come in would go to Agent B’s extension, and then Agent C's, and so on.

Some other options include routing calls to the agent with the least amount of talk time (least-occupied routing), the agent with the most relevant skill set (skills-based routing), or according to the agent’s time zone or business hours (time-based routing).

The method you choose will depend on a variety of factors, such as the size and geographical scale of your business, your call volumes, and agent availability.

Benefits of using phone extensions

VoIP services have unlocked powerful communication abilities that make connecting with people inside and outside your company much cheaper, efficient, and effective. Phone extensions play a key role in the following ways:

1. Save money

Traditionally, you’d have to purchase and install a new line for every user, which can get expensive. Placing an extension on phone lines allows you to add employees, departments, and devices onto the same line, significantly cutting hardware and maintenance costs.

2. Simplify call management

VoIP phone systems let you view the real-time status of every extension from an integrated and detailed phone dashboard. For every extension, you can see call times, caller ID information, call queues, extension availability, and more, providing immediate insight into performance.

3. Improve internal communication and productivity

Rather than wasting time searching for and dialing lengthy phone numbers, employees can simply dial the shorthand extension. This enables them to quickly transfer calls and directly connect with the colleague they want to speak to.

4. Enable smooth scalability

Acquiring virtual phone extensions is cheaper and simpler than installing new physical lines, offering flexible scalability to suit immediate business needs and support growth. And if you need to scale down, you can remove the extension without incurring the cost of wasted resources.

5. Enhance flexibility

A virtual extension can be assigned to any mobile device to empower employees to make and receive VoIP calls from anywhere. Unchaining employees from their desks can deliver invaluable productivity and satisfaction benefits that lead to a happier, more motivated workforce. Plus, you increase employee retention and secure access to a larger talent pool.

6. Create better customer service experiences

When phone extensions are combined with IVR systems, it creates more efficient customer service experiences that facilitate faster resolutions. Customers can be quickly routed to the right department or agent without encountering multiple transfers or lengthy wait times — things that cause frustration and churn.

In Khoros’s “Getting To Know Your Customers” report, which surveyed over 1,000 customers, 79% said that receiving fast responses and resolutions was crucial to having a positive experience. Businesses that fail to deliver pay the price — 65% have switched to a different brand after a poor customer service experience.

7. Give your brand a professional image

A well-organized phone extension network gives your brand a polished and professional presence. It portrays you as a highly efficient, structured business that values effective communication, helping you make a good first impression on customers.

4 use cases where you need to use phone extensions

Fundamentally, phone extensions make it quicker and easier for customers to connect with employees and for employees to connect with each other. But aside from that, why else might you need to assign phone extensions to employees?

1. To empower remote workers and distributed teams

Distributed teams and remote workers can take advantage of virtual extensions to empower easy, productive internal communication — whether traveling between locations or in a different city or country altogether.

With a virtual phone extension, like the mobile unlimited extension offered by Vonage, you can give employees a virtual extension and direct dial number that they can use to make and receive calls via their mobile devices.

They also get advanced calling features like call forwarding, simultaneous ring, and follow me, along with voicemail-to-email to ensure they never miss a call.

2. To provide after-hours customer service

The more time you have available to support your customers, the better. If you receive incoming calls outside of business hours, you can choose to route them to one or multiple specific extensions, such as a mobile device or after-hours emergency number.

3. To streamline and boost sales

Customers crave convenience throughout the customer journey — including the moment that they’re ready to initiate contact with a sales rep.

By adding extension numbers to your sales communications, such as emails, ads, and pitches, you provide prospects with a direct connection to the right person. In turn, you lower customer effort, boost satisfaction, and drive more conversions.

4. To facilitate self-service

According to a Gartner study of 5,728 customers, which explored self-service technology’s capability to resolve customer issues, customers prefer the speed and convenience of self-service. 73% of customers use it at some point in their journey.

When combined with IVR, phone extensions empower self-service by allowing callers to bypass human receptionists. Instead, they can direct themselves to the right place, reducing the number of times they have to explain their issue and reducing lengthy holding times and transfers.

Manage your phone extensions with ease

Phone extensions bring convenience and structure to your internal and external business communications, leading to better employee and customer experiences. A VoIP communications system with advanced and intuitive extension controls can help you manage your phone extensions painlessly.

Vonage is a cloud-based VoIP system that allows businesses to add, remove, and customize extensions through an intuitive admin portal. Use advanced call forwarding and routing features to direct calls to individual, department, or team extensions, whether in-office or remote, for seamless internal connectivity.

And with a customizable virtual receptionist, you can streamline customer experiences by routing callers to the right extension without delay.

Get in touch with one of our friendly specialists to discover how a VoIP solution can improve your business communications.