So you have decided to upgrade to a VoIP based phone system for your business. You have read about the benefits it can offer your business and see the promises of huge savings. Yet, it can be difficult to take the plunge once and for all. With a practically unlimited choice of vendors, features, and incredibly low prices, where do you even start?
The big issue for most business owners is that comparing the pricing between VoIP vendors is not easy. Advertised prices are suddenly not applicable to the plan you are interested in. Or the low sticker price does not include the basic features you need for your company. Additionally, some providers will quote you prices based on the number of users while others base it on the type of features the plan offers.
No wonder getting a good apples-to-apples comparison of VoIP pricing can seem impossible. That’s why we are here to breakdown the various costs involved in switching to business VoIP. Cloud-based VoIP services are a type of information service. And as with all information technology services, the actual costs vary from one organization to another.
Consider all VoIP costs
The biggest mistake many companies make when comparing the cost of VoIP is to focus on the monthly plan price or only think about the initial investment. If vendor A charges $10 per month and vendor B charges $15, then A is the cheaper service, right?
Unfortunately, the answer is not so simple. If you look closely, you might find that vendor A does not include call recording or automatic voicemail transcription in its pricing but vendor B does. If those features are indispensable for your office, then it’s worth paying the extra amount.
So when doing a comparison of VoIP prices, it is important to consider and account for all your costs. You should not forget about one-time costs, recurring costs, and even long term costs. In other words, think about the Total Cost of Ownership (TCO) over the lifetime of using the service.
How to compare VoIP pricing: Break down different costs
One time costs
These costs occur only once, typically when you first switch to a new technology system or service. Quite a few businesses make the mistake of ignoring these initial costs since you only have to pay it once. But these initial costs can make a massive difference, especially for a small business that does not have a lot of financial resources.
1. Setup fees
Some vendors charge an initial or setup fee when you first switch to VoIP. It might cover the cost of consultation or administrative expenses. Some providers simply roll it into other fees and do not charge it separately.
2. Hardware costs
Compared to a traditional business phone system, VoIP phone services do not require a lot of expensive equipment. But you do need phones or devices that are capable of handling VoIP calls. That means you may have to purchase phones, headsets, or adapters for your existing system. Some of your employees may be able to get by with using a softphone app on their mobile devices but many others will require a dedicated VoIP desk phone.
3. Number porting fees
One obstacle involved in switching to a new provider is the potential to lose your existing business phone numbers. Thanks to number porting, you no longer have to worry about this aspect. Most businesses do not have to pay any separate fees for porting their numbers over to a VoIP provider. But depending on the complexity of your existing setup, vendors may charge a separate number porting fee.
Monthly costs
These are the recurring expenses that you have to pay every month for using VoIP phone services. Quite often, this is the sticker price advertised by vendors. There are different types of monthly costs and ways of estimating your total bill. You should be especially careful when comparing these VoIP prices as it is easy to get carried away when adding features or upgrading to a different plan.
1. Plan costs based on features
Some vendors bundle their features into bundles or plans. You may or may not be able to add specific features to the plan you select. Other vendors do not have separate plans for clients. All features are available to everyone and total costs are calculated based on the number of users only.
2. Call costs
Call costs are what you pay for the actual minutes you spend on making outbound calls. Most providers offer a wide range of calling plans – from pay as you go to minute bundles and unlimited calling plans, you have many options to choose from. Do not just compare these costs based on per-minute charges or total plan costs. First, estimate or get a report of your average call volume and then select the type of plan that is the most cost-effective for your business.
3. Per-user costs
One common method of VoIP pricing is to offer different rates based on the number of users. For instance, an organization with fewer than 25 users may pay $20 per user per month while a bigger company gets a discount and only pays $18 per user per month. There’s not much you can do to change this number but make it a point to estimate your costs based on your organization size.
4. Commitment period
VoIP providers also charge different prices based on whether you sign a contract or not. Almost every provider will give you the option of month-to-month pricing. But you will get a bigger discount if you sign up for a longer period. If you are unsure about VoIP services in general or about the vendor in particular, month-to-month is a good way to start.
Additional costs
Some costs are easy to overlook when you compare VoIP pricing. These miscellaneous costs may catch you unawares and many businesses do not consider them at all when deciding to upgrade.
1. Faster internet
The major selling point of VoIP services is that they don’t need much equipment, wiring, or expertise to use. But the quality of VoIP calls relies on your data network. You need fast internet for good audio and to minimize dropped calls. If you have to upgrade your internet connection for VoIP, then that is a cost that must be factored into your budget as well.
2. More bandwidth
The total bandwidth available for VoIP calls is also important to consider. If your existing network is struggling to handle traffic during peak hours, then how can you add VoIP calls to the mix? Many companies find that they have to upgrade their data network for high-quality voice calls.
3. Upgrading network equipment
When was the last time you upgraded Network equipment such as modems, routers, and switches? Older hardware is generally not equipped to handle modern VoIP services. In some situations, all you need to do is update the firmware. Sometimes you have to replace the equipment with newer models. In either case, you should not forget to include these costs in your comparison.
4. Training
Your employees don’t need much training to start using VoIP. The experience of making and receiving calls doesn’t change much. However, you may still need to spend some time bringing everyone up to speed on the new phone system. The staff that needs to use more sophisticated features may need additional training when compared to others. You may not pay anything to the vendor for this but should account for the hours lost in training.
5. Network security
Similar to most other information technology services, VoIP is also vulnerable to spam, fraud, Denial of Service (DDoS) attacks, and other tactics. Hackers can also target your employees and break into your phone system. Protecting your information assets (in this case your data) is crucial and can be expensive if you decide to add security later. It pays to consider the cost of network security in advance.
Future costs
These are more long-term costs which often come up after you have been using VoIP services for a while. For example, you may want to upgrade to a different plan as your organization grows which can become expensive. Future expansion may force you to purchase additional lines, phone numbers, and add more users.
Even switching to a different provider comes with its own set of costs. In most cases, you don’t have to buy any new equipment as all your VoIP phones should work with any VoIP service. However, that doesn’t mean you don’t lose any time when switching and your workers may need more training for the new system.
Conclusion
As you can see, comparing VoIP prices depends on various factors and may include unexpected expenses. Rather than trying to get one number for comparison, it is important to add up all the individual components as they pertain to your business. You can also ask vendors to provide custom quotes based on your requirements. This can make it easier to decide on a particular vendor.
Fortunately, you can always test the service for a few days or weeks before signing on the dotted line. Head on over to VoIPstudio and sign up for a free 30-day trial and see the benefits of VoIP for yourself!
