How VoIP reduces costs and boosts ROI in Small Businesses
With the coronavirus pandemic still posing a major threat in most parts of the World, businesses in all industries are undergoing significant changes. A huge one of these is to ongoing costs, as all companies are trying to save as much money as possible on their operations. One way to do that is by switching from a traditional PSTN to a VoIP service. However, does that change make sense in the current business climate and does VoIP really offer a good return on investment?
Let’s find out if this technology is a reasonable investment for small businesses in these unprecedented times.
First things first – establish your current costs
Before determining whether VoIP will make sense for your small business, you first need to look at your current costs. You will need to consider the following:
- How many lines you have
- What type of hardware you use
- Additional costs such as international calls
This is not accounting for extra tools that you use alongside the landline that comes as standard with a VoIP provider. When comparing the two ways to make calls, you should also factor in that, when switching to VoIP, you need to pay for the installation as well. But more on that later.
Once you have all of this noted down, it’s time to evaluate how much it will cost you to switch from PSTN to VoIP.
Getting started with VoIP
Once you decide that you’re ready, it’s time to look into installation costs for VoIP. Besides the recurring fees (which will cost you anywhere from $20 per month), you need to factor in the costs of installation. This means hooking up your entire workplace, including number porting, the costs of different telephone devices, and more.
Installing and setting up a PSTN line will set you back at least $100 per line if you’re in the US. On the other hand, if you already have an internet connection then installing VoIP will be completely free and chances are that your provider will waive this charge for you.
When it comes to hardware, a good quality VoIP phone will cost anywhere from $70 and up, with top-of-the-line models selling for hundreds of dollars. However, you don’t have to purchase a phone because you can use your computer or an existing mobile phone to make VoIP calls.
To sum up, your main cost is the subscription fee that you pay regularly to your provider. At $20 per line per month, it’s a steal compared to PSTN. In general, you’ll save more than $500 per year per line if you use VoIP instead of PSTN.
Scaling up (or down)
Whenever you want to add a new line to a traditional phone system, you have to pay several hundred dollars each time. The same goes for removing one if you want to downsize. In unprecedented times like these, when you have no idea how the size of your team may change, this is not only a nuisance but also a major cost. Add to the fact that even the most basic feature such as caller ID costs an extra $3-10 per line, and it’s clear that nothing comes free with PSTN.
On the flip side, adding a new line with a VoIP provider is simply a matter of getting in touch with them and asking to add new seats to your plan. The cost will just be added to your monthly bill.
Maintaining your phone lines
When calculating how much VoIP (or a landline) will cost you, it’s a good idea to keep in mind that the decision you make will stick with you for at least several months if not years. There could be issues with your phone lines, so be prepared to pay for the upkeep.
Here too, there is a major difference. The average price of a repair for a standard phone line is around $145, while the price of a standard VoIP repair is $75.
Much of that difference is because of the fact that VoIP relies entirely on your internet connection to make calls, which is generally cheaper to fix compared to copper wire systems used in traditional phone systems.
When you think about it, PSTN offers you very little besides just calls. The most you will get out of a traditional phone is caller ID and perhaps call recording, but you would have to purchase a separate device in order to use even those functionalities.
On the other hand, VoIP offers small businesses features such as:
- Interactive voice response
- Call queuing and recording
- Fax to email
- Personalized greetings
- Call masking
- Conference calls
- Call flows
- Skills-based routing
- Call forwarding
- Third-party integrations with CRMs and other business apps
And many, many more.
On the surface, having something like an IVR may seem like a feature that’s nice to have rather than a necessity. However, in the long run, it can actually save a huge amount of time on inbound calls and provide your customers with self-service options. Moreover, IVR can help them reach the right agent more quickly thanks to skills-based routing. Indirectly, a feature such as this can massively improve your customers’ satisfaction, decrease churn, and even please your agents who’ll be speaking to people they are most qualified to help. It’s a win-win situation.
Perhaps the biggest advantage for small businesses in times of a global pandemic is that VoIP allows you to be completely remote and location-independent. Anyone with a mobile phone or a computer can log in and start making or receiving calls from anywhere in the World. In an age when remote work is becoming the new norm, this is of utmost importance. You won’t only save on your phone bill but have no need for an office anymore either, resulting in huge cost savings.
You can’t improve what you don’t measure. If you have a traditional phone, the most you can analyze is how many phone calls you make every month. Great, but that’s hardly useful if you want to improve how you drive sales or provide customer support.
By switching to VoIP, you’ll be able to access some of these analytics:
- Typical call length
- Average volume of calls per day/week/month
- Best/worst-performing agents in terms of calls
- First call resolution
- Customer satisfaction scores
- Agent performance KPIs and call transcripts
And much, much more. Using this info, you’ll be able to make smarter business decisions, delegate your agents better, invest more (or less) in customer support, and in general provide a better service for your existing and potential customers.
There are indirect savings too. Thanks to these analytics, you’ll be able to put the right agents in the right places so they can resolve customers’ problems more quickly and efficiently. As a result, you’ll reduce turnover of employees and their morale will increase too.
In the end, is there a ROI from VoIP for small businesses?
It depends on how much you rely on phones for your business and whether making calls is crucial for your sales/customer support. If you make numerous calls every day and you have teams dedicated to customer support or sales then yes, VoIP is the way to go. Not only will you save lots of money but you will also reap the many benefits of a modern VoIP system’s features.
On the flip side, if you don’t really use phones for your business all that much and you rely on other methods of communication, you might be thinking that VoIP is not worth your time. However, as we’ve outlined above, you’ll still be able to save money (compared to traditional phone lines) and also make use of some great VoIP features that will undoubtedly change the way you do business.
If you’re just launching a new startup and are wondering which business phone system to use from the very beginning, VoIP is the clear winner here too. It’s low installation costs and the quick scalability make it a great choice for smaller teams with no clear plans for growth.
Over to you
Do you still want to rely on copper wires and telephone devices to make calls or are you ready for the future? One thing is for certain – VoIP keeps getting cheaper and its features getting better with each passing year. No matter the size of your company, your industry, or what you sell, VoIP is a sure bet in 2021 and beyond.