VoIP, or Voice over Internet Protocol, is a feature-packed, budget-friendly alternative to traditional phone systems. But is it the right communication solution for your business?

We wrote the full guide weighing the advantages and disadvantages of VoIP phone systems to help you decide.

VoIP Advantages and Disadvantages: Overview

Want a quick overview? Watch our three-minute video on the pros and cons of VoIP below:

VoIP Advantages

Being VoIP providers ourselves at Nextiva, it would be fair to say we know a thing or two about VoIP. Here’s a detailed guide to its pros and cons:

• Lower costs
• Increased accessibility
• Complete portability
• Higher scalability
• Advanced features for small and large teams
• Clearer voice quality
• Supports multitasking
• More flexibility with softphones

1) Lower costs

The bottom line is vital for every business, large or small. So, you have to consider every cost-saving opportunity. One way companies can realize significant cost savings is by adopting a VoIP phone system.

Consider this:

On average, a landline phone system (POTS) costs businesses $50 per line each month. This rate comprises local (and sometimes domestic) calls only. VoIP plans, in contrast, are available for less than $20 per line.

Wait, what?

That’s right. Going by these figures means VoIP can lower your phone bill by more than half of what it is right now.

It’s important to note that a shift to VoIP is not a guarantee that your phone expenses will plummet. Businesses differ, and so do their needs.

But what you can be sure about is that switching to VoIP will bring about considerable cost savings. Cost savings in VoIP come in two ways: direct and indirect.

Direct cost savings

When it comes to traditional phone service, a business incurs massive initial costs. Especially in the name of business phones and PBX hardware.

a) PBX costs

A PBX (private branch exchange) is an on-premise physical piece of hardware. It connects many landline phones in an office and can cost a huge sum of money. We are talking tens of thousands of dollars — an amount you can amortize over several years.

You may argue that analog phones cost about the same as IP phones. The exact price will differ based on the desired features.

But onsite PBX installations are a costly capital undertaking. It can go for anywhere between $500 and $2,000 per user. So even a small business with a handful of employees needs to invest in physical hardware.

VoIP networks do away with this need for extra hardware since a broadband connection powers the service.

To ease the transition in their phone system upgrades, such organizations could use a Session Initiated Protocol, known as SIP Trunking. A SIP Trunk acts as a digital pathway for your voice services while maintaining existing phone hardware in your office.

The key benefits of SIP Trunking include lower costs, easier to manage, and you can activate service instantly. Technology leaders use a SIP trunking provider for adding new voice capabilities to an existing phone system.

b) Copper wiring charges

Broadband connections also do away with the extra wiring because VoIP networks allow both voice and data on the same channel. In IT and telecom circles, the correct word for this is full-duplex. It’s the ability to send and receive voice and data concurrently. Most VoIP desk phones need only one Ethernet to be connected to it.

Power over Ethernet (PoE) enables offices to be more modular with their office staff. Additionally, those offices won’t need to make changes to the building’s electrical wiring.

Going completely wireless? Professional VoIP service is also available as an app on your computer or smartphone. VoIP’s flexibility is a big win for entrepreneurs and enterprises alike.

c) Calling expenses

Direct costs also come in the form of the cost of calling. VoIP calls are cheaper compared to the Public Switched Telephone Network (PSTN) or the traditional circuit-switched telephone network by a stretch.

A large part of this has to do with the drastic fall in data carriage costs. Initially, data was priced out of the reach of most small businesses.

Even for large organizations, users had to contend with capping on enterprise internet bandwidth and broadband. Today, however, internet speeds have improved while data costs have correspondingly taken a nosedive.
Statistics reveal that small businesses using VoIP can reduce their company’s phone bill by up to 60%. They can also save up to 90% on international calls.

One easy way is to choose the right business phone service.

That’s a substantial number we are talking about in any given year.

These savings go back to the abandonment of expensive ISDN (short for Integrated Service Digital Network) primary rate interfaces. Or even the dedicated lines associated with a POTS system in favor of

VoIP service. Companies that make long-distance calls outside of the United States enjoy VoIP’s lower costs.

Traditional phone service costs approximately twice as much as compared to VoIP. VoIP offers a significant benefit for businesses that operate globally.

d) Recurring expenses

A VoIP service also enables businesses to cut other ongoing expenses such as taxes, repair, and maintenance fees. VoIP providers usually roll these costs into subscription plans which, like in the case of Nextiva, can cost as little as $5 per user per month.

All these costs, combined, make VoIP service an appealing proposition for growing startups and SMBs.

Indirect cost savings

Indirect savings are more difficult to quantify, but that doesn’t make them any less critical for your business. Below are some of the most common areas where organizations save money long-term.

a) Savings with remote work

Switching to VoIP lets employees stay connected to the corporate phone system while working remotely. This is thanks to the long list of VoIP phone features like call waiting, auto-attendant, instant video calling, conference calling, and others not provided by traditional phones.

Studies show that this not only can increase employee productivity, but it can also cut down on utilities and office space.

A typical business can save $11,000 per person per year by merely letting them work from home 50% of the time, according to a recent analysis by Global Workplace Analytics.

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b) Add-on features at no extra cost

You probably might be quick to point out that even traditional PBX supports remote working through functionalities like call transfer, group ringing, call queuing, and so on.

In essence, these features are not inherent in a standard PBX system. Rather, they are add-on features that you have to pay for separately.

By comparison, VoIP phone services include many of these features at no additional cost. No need to pay extra for whatever feature you think could be useful for your business.

c) Repurposed manpower

If your business relies on a secretary to handle phone calls and take messages, the auto attendant feature lets you repurpose that role at no additional cost. (An in-house secretary hired on a full-time basis pockets about $45K a year, which is not cheap.)

Of course, a secretary does make sense for companies taking a large number of walk-ins or large corporations with sizeable budgets.

However, smaller businesses may find it difficult to justify this kind of salary. But with the auto attendant feature a click away, you’ve just waived this cost.

2) Increased accessibility

Cost efficiency aside, accessibility is one of the biggest benefits of VoIP for business. One distinct advantage cloud-based VoIP service offers is the ability to make calls from anywhere.

If you have a decent data connection, you can make and receive calls for your business. And when you’re unable to answer the call, you can direct calls to another person or get voicemails emailed to you. A noted benefit of VoIP is the ability to take your business phone with you with nothing more than a softphone app.

In an increasingly mobile workforce, remote accessibility allows your business to be flexible. Mobile employees can stay productive regardless of their location.

VoIP adapts based on how your employees work. Employees don’t need to be physically present at the office.

They can work on their smartphones and tablets from anywhere.

3) Complete portability

Your number, also known as a virtual phone number, is completely portable. This means you can use the same number wherever you go.

For people who travel a lot, this should be more than welcome news. Better yet, in the event your business changes address, you can retain the same VoIP number.

4) Higher scalability

Scalability is another of the many VoIP advantages that make it an attractive proposition for growing businesses. While this is an often-talked-about aspect of VoIP, what does it mean exactly?

Given the option, every business owner would prefer a phone system that grows in step with their business.

A VoIP solution does away with having to purchase expensive hardware or a dedicated line as you grow. Think of all the possible scenarios here like you’re:

• Prepping for a spike in demand during the holidays
• Opening a new branch office

No matter what the scenario, toggle your preferences instantly without having to purchase additional lines or dedicated hardware.

5) Advanced features for small and large teams

With advanced features like auto attendant and call transferring, VoIP allows even a one-person operation to project the image of a larger company.

On the other hand, it can make a large enterprise feel more approachable. It’s all about making the best use of all the available features.

Let’s say you have a Charlotte-based business, but you also serve clients in a far-away state like Oregon.

By signing up with a provider like Nextiva, you get a VoIP phone number with the Oregon area code, although you’re based in North Carolina. This makes customers perceive you as a local, even though you are not.

Similarly, the auto attendant feature can make you look larger than you are. For example, you could be a sole proprietor but still set up your auto attendant to sound like you are a company with multiple departments.

VoIP offers advantages over traditional phone systems with its multi-party calling capabilities. Organizations large and small often need a separate conference call provider that enables many people to join the same call.

Business VoIP providers include robust conference calling features built right into their service.

6) Clearer voice quality

When VoIP service first rolled around, one of its most significant disadvantages was its weak call quality. Calls would drop for no reason, the voice quality itself was bogus, and latency was the order of the day.

Today, as long as you have a fast and stable Internet connection, voice quality should not be an issue. VoIP calls tend to be crisp and clear, with no latency issues, lag, or call dropouts. We’ve all been on a miserable voice and video conference before.

The key to VoIP call quality is a robust connection with good bandwidth. Without this, it can be a nightmare, especially if you often find your office making concurrent calls. There’s always someone who calls in with a cell phone, and everyone else suffers through echoes, delays, and background noise.

VoIP phones end those interruptions so you can focus on the meeting’s agenda. Innovations such as noise-canceling microphones and advanced audio compression enable VoIP phones to achieve superior sound quality.

7) Supports multitasking

Along with traditional phone calls, VoIP allows you to send documents, images, and videos all while simultaneously engaging in a conversation. So you can seamlessly hold more integrated meetings with clients or staff from other corners of the globe.

8) More flexibility with softphones

Despite the name, softphones are not hardware devices. Instead, they are programs installed on a computer or other smart devices like a tablet or smartphone.

A good example is Skype, although enterprise VoIP providers like Nextiva have their applications tailored particularly for business.

The upside to having a softphone for your business communications is manifold:

• Frees up desk space
• Cuts additional equipment costs
• Allows for even greater portability
• Enables the constantly-connected workforce

More than that, softphones allow you to be flexible. They give you access to features that support your remote work style.

9) Increased security

Most people don’t care to spend more time than it’s worth to think about the security of their phone system. Phone system security is a big deal, especially for businesses. Demand for personally identifiable information (PII) has never been higher.

A typical entry point is to trick staff through fraudulent phone calls, typically known as social engineering.

VoIP can mitigate such security threats by leveraging the advancements made in IP technology including encryption and improved identity management. Hosted VoIP providers work around the clock to protect their networks, so you don’t have to.

Securing your VoIP system means you should work with a trustworthy VoIP provider that undergoes independent security audits, ensures staff practices healthy password habits, and configures automated alerts for questionable calling behavior.

Additionally, it is always advised to complete operating system updates consistently to ensure your business isn’t at risk through newer vulnerabilities.

VoIP Disadvantages

Everything that has an advantage has its disadvantages. VoIP telephony is not exempt from this rule.

Here are the downsides associated with the VoIP service you need to be aware of:

• Needs a reliable internet connection
• Susceptible to network jitter
• Limited location tracking for emergency calls
• Compatibility issues with some traditional alarm systems
• Security concerns

1) Reliance on a stable internet connection

VoIP calls travel over your internet connection, so a reliable connection is crucial for smooth operation. If your internet drops frequently, expect choppy calls or even complete outages.

A minimum upload speed of 100 kbps per device is recommended. While VoIP is efficient, low speeds can lead to dropped calls and lag.

Low latency (signal delay) and jitter (variation in latency) can also impact call quality. Think of it like a bumpy road for your voice data — the smoother the ride, the clearer the call.

The good news is that VoIP uses less bandwidth than you might expect, so you won’t need expensive internet phone service. A reliable plan should suffice for most users who work from home.

Types of connections best for VoIP:

✅ Fiber internet
✅ Cable internet
✅ DSL internet
✅ LTE internet (cellular)
✅ 5G internet (cellular)
❌ Satellite internet
❌ Dial-up internet

For larger businesses, the bandwidth will depend on the number of concurrent calls you plan on making. The best way to determine this is to run a bandwidth test on your current network to make sure you don’t face VoIP issues.

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2) Susceptible to latency and network jitter

Along with internet speed, two other issues can affect your communication experience: latency and jitter.

• Latency is the delay in sending and receiving information online. High latency means there’s a lag between pressing a button and seeing the action happen on screen.
• Jitter is the inconsistency in that delay. With low jitter, the delay might be slightly noticeable, but it stays consistent. High jitter means the delay keeps jumping around, making the connection feel jumpy and unreliable.

When communicating online, information travels in tiny packets and each message (whether email, video, or audio) is broken into bits of data called “data packets.” Ideally, these packets travel smoothly and arrive in the right order.

Latency and network jitter happen when data packets experience delays during transmission, increasing the time it takes for information to arrive, and when packets take wrong turns or get stuck, causing delays and requiring retransmission.

These issues can arise from various factors, like a crowded internet connection, outdated equipment, or worn cables.

You can easily minimize latency and jitter for a better online experience with a few best practices:

• Upgrade your internet plan: Consider a higher bandwidth plan from your ISP to handle the data flow.
• Invest in a quality router: A good router prioritizes voice traffic for smoother calls.
• Replace worn cables: Use Cat-5e or Cat-6 Ethernet cables for optimal performance.
• Enable jitter buffering: This feature, often pre-enabled on VoIP devices, helps absorb slight variations in packet arrival times, minimizing their impact on call quality.

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3) Limited location tracking for emergency calls

One important difference between traditional phone lines and VoIP is emergency calling. With a cell phone, emergency services can use cell tower data to locate you in an emergency. However, VoIP calls rely on IP addresses, which aren’t as precise for location tracking.

While this isn’t a concern for most calls, it’s crucial for emergencies. To have help arrive quickly, keep your E-911 information updated with your current address, so emergency services can identify your location even when using VoIP.

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4) Compatibility issues with some traditional equipment

Some older types of alarm systems and fax machines don’t work with VoIP.

There are two ways to address this:

• Upgrade equipment: For many businesses, modernizing equipment with cellular connectivity is the preferred solution.
• Use an ATA: An Analog Telephone Adapter (ATA) can convert analog signals from older equipment to work with VoIP.

But why do compatibility issues occur?

Traditional phone lines transmit analog signals, while VoIP uses digital data. This conversion process (modulation) can slightly alter the signal, causing problems with incompatible equipment.

5) Security risks

As with any internet-based technology, VoIP is susceptible to security risks such as hacking and phishing attacks. Hackers could potentially eavesdrop on calls, steal data, or disrupt service. What can you do to keep your business secure?

• Choose a reputable VoIP provider: Look for a reliable VoIP service with a strong track record of security that offers features such as encryption and two-factor authentication.
• Educate your employees: Train your employees on VoIP security best practices, such as how to identify phishing attacks and how to create strong passwords.
• Keep software up to date: Make sure your VoIP software and devices are always up to date with the latest security patches.

VoIP Advantages and Disadvantages Summarized

Best Practices for Maintaining VoIP Quality

When challenges creep in, you don’t have to look the other way. Follow these best practices to ensure smooth and reliable VoIP calls:

• Monitor your network performance: Regularly monitor your internet connection speed for signs of jitter. Many VoIP providers offer tools and VoIP speed tests to help you monitor your network performance.
• Optimize your network bandwidth: Your internet plan should have enough bandwidth to support your VoIP needs. A good rule of thumb is to have at least 100 kbps of upload speed per VoIP device.
• Prioritize VoIP traffic: Configure your router to prioritize VoIP traffic (SIP traffic) over other types of internet traffic, such as video streaming, so your voice calls have the bandwidth they need for optimal quality.
• Use high-quality equipment: Invest in high-quality VoIP phones and headsets for clear audio quality and to reduce dropped calls.
• Conduct regular maintenance: Perform regular maintenance on your VoIP system, such as updating software and firmware. Keep your system running smoothly and securely.
• Test your system regularly: Schedule regular test calls to check for any problems with your VoIP system to identify and troubleshoot any issues before they become a problem for your users.
• Develop a disaster recovery plan: Have a plan in place in case of a power outage or internet disruption. This could include having a backup internet connection or using a mobile VoIP app.

Making the Switch To VoIP: Set Up and Benefits

How do you switch to VoIP?

One of the key benefits of VoIP is its relative ease of use. There are three main ways to connect to a VoIP service provider:

• Dedicated VoIP phones: Offer a familiar phone experience with high-quality audio. Simply connect to your internet router via ethernet or Wi-Fi. It’s a great option for home users.
• Analog telephone adapters (ATA): These adapters allow you to use your existing landline phone with a VoIP service. This can be a good option if you’re comfortable with your current phone but want the benefits of VoIP.
• Softphone applications: These software programs let you make and receive VoIP calls using your computer, tablet, or smartphone. It’s a convenient option for those who already use these devices for communication, travel frequently, or work remotely.

Businesses are particularly drawn to VoIP due to its cost-effectiveness and scalability. VoIP eliminates the need for separate private branch exchanges (PBXs) and data lines, leading to significant savings on monthly bills. VoIP plans often offer features like call forwarding and voicemail at no extra charge.

Unifying voice and data on a single network (phone calls, SMS, email, faxes, web conferences, and more), VoIP streamlines communication for businesses. You get features like video conferencing and collaboration tools, all accessible through the internet.

VoIP can spur growth in both enterprises and SMBs, without much of a budget to work with.

Choosing the Right VoIP Phone System

Looking at the pros and cons above, it’s clear that the benefits far outweigh any VoIP’s disadvantages. Now how do you choose the right VoIP phone system?

Here are some key questions to ask:

• Features: Do you need basic call functionality or advanced features like video conferencing and call recording?
• Scalability: Can the system easily adapt as your business grows?
• Security: Does the provider offer robust security measures to protect your communication channels?
• Budget: Do the pricing plans and features fit your budget?

At Nextiva, we understand the importance of seamless communication for businesses of all sizes. We offer a wide range of VoIP solutions packed with features that boost your team’s productivity and efficiency.

Our team of experts guide you through every step of the process, from initial setup to ongoing support. We ensure a smooth transition with minimal disruption to your daily operations, allowing you to focus on what matters most — running your business.

To learn more about our products and what we can do to help your company, check out our business phone service.

“Press 1 for Sales,” “Press 2 for Support” — this is an interactive voice response (IVR) system in action.

For businesses, IVR is more than just an automated voice. It’s one of the first touchpoints when customers call you up and makes for a powerful tool that drives and improves customer service experiences.

73% of customers have an average first impression with IVR and 63% expect a personalized IVR experience. To offer a better customer experience, you need to better understand how these automated technologies work and create user-friendly IVR flows that keep customers engaged.

We’ll dissect what exactly an IVR is, how it works, key benefits, and share some best practices to create an optimized interactive voice response system.

What Is IVR?

Interactive voice response (IVR) is an automated telecommunication technology that interacts with callers through voice or touch-tone input. It uses pre-recorded messages, speech recognition, and dynamic menu options to guide users to desired information or services.

IVR systems can:

1. Answer and route calls
2. Provide self-service options
3. Collect caller data
4. Integrate with databases for personalized responses

IVR acts as a virtual receptionist. It handles routine tasks and efficiently directs complex issues to appropriate human agents, streamlining customer service operations. Businesses can configure IVR rules based on factors like agent skills, call volume, or time periods.

Industries like banking, healthcare, and customer support typically use an IVR for better accessibility and operational efficiency. These systems offer 24/7 availability, reduce wait times, and help businesses manage high call volumes effectively.

IVR balances automation with human interaction. It’s an integral tool for optimizing customer service across various sectors.

How Does IVR Work?

Let’s understand an IVR call flow with a simple example.

A customer calls a bank to check their balance. The IVR system first greets them and might offer language options.

Then, it presents a menu of choices, like checking account balances, making a transfer, or speaking to a customer service representative. The customer can respond by pressing the corresponding number on their keypad or saying the desired option.

The IVR system interprets the input and directs callers accordingly. Could be directing the customer to pre-recorded information, transferring to a live agent, or even collecting relevant information using voice prompts.

Here’s what’s happening behind the scenes:

1. Caller interaction and menu navigation

A customer dials a company’s phone number and is greeted by an IVR welcome message, which is an auto-attendant of the automatic call distribution (ACD) system IVR uses. This menu can be one or several layers deep.

The IVR presents the caller with a series of options, typically via pre-recorded messages or text-to-speech technology. These options can be accessed by pressing a number on their keypad.

The option your caller chooses is recognized by the press of a button on a touch-tone keypad. This technology is called dual-tone multi-frequency signaling (DTMF). 

For example, you could offer:

1. Sales.
2. Support.
3. Accounts.

But you could also offer submenus inside each of those options. So, when someone presses 3 for accounts, they get a second menu. 

This could include:

1. Make a payment.
2. Query an invoice.
3. Request a copy of an invoice.

The option pressed by the caller on their keypad routes the call to the relevant department.

3. Call routing

When an option gets selected, the IVR routes the call to the individual, department, queue, or message you’ve configured in your IVR application.

• Live agent: The call is connected to a representative in the most relevant department.
• Self-service options: The IVR provides automated services like account balance inquiries, bill payments, or appointment scheduling.
• Information retrieval: The IVR accesses databases to retrieve information for the caller, such as business hours or product details.

In some queues, you might want to offer a callback option. Here, the caller can opt to leave the call but keep their position in the queue to receive a callback. 

When it’s their turn, your call center software triggers an outbound call. The caller carries on with their day without the need for long wait times.

4. Error handling

If a caller makes a selection error or needs further assistance, the IVR can offer options to repeat the menu, connect them to a contact center agent, or provide a clear path for escalation.

• Press 9 to repeat the menu.
• Repeat the menu automatically if no option gets selected.
• Press # to speak to an agent.

If a customer gets stuck in a self-service option, you can enable your IVR to automatically escalate the call to a human agent.

5. Analytics and reporting

Modern IVR systems track call interactions (both self-service and agent-assisted) providing valuable data on call volume, resolution rates, and customer satisfaction. This data helps businesses optimize their IVR for better performance.

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What Are the Benefits of an IVR?

When thinking about the benefits of an IVR system, it’s important to consider not only the benefits to your business but also the benefits to your customers. Here are a few reasons why you need to use IVR systems.

For businesses:

• Improved customer service: IVR offers 24/7 availability, reduces wait times, and directs incoming calls to the right agent, leading to a more efficient and satisfying customer experience.
• Reduced operational costs: Automating routine tasks frees up call center agents to handle more complex inquiries, saving businesses on operational expenses.
• Increased productivity: Agents can focus on resolving complex issues while the IVR handles simple questions, which improves efficiency.
• Data-driven insights: IVR analytics provide valuable data on customer behavior and call trends, allowing businesses to make informed decisions regarding their communication strategy.
• After-hours call handling: An IVR lets you provide a distinct call flow outside of business hours. The after-hours IVR menu can exclude the ability to talk with an agent and instead encourage callers to leave a voicemail or call back during regular business hours.
• Scalability: IVRs adjust to handle varying call volumes without hiring more staff. You can expand it to include more options and functionality as your business grows.

For customers/callers:

• Faster service: IVR allows callers to get information or resolve basic issues quickly without waiting on hold.
• 24/7 availability: Customers can access information or self-service options outside of regular business hours.
• Convenience: IVR provides a user-friendly way for customers to get what they need without requiring interaction with a live agent.
• Multilingual support: Advanced IVR systems can offer options in multiple languages, catering to a broader customer base.

Common IVR Applications & Use Cases

IVR systems have become imperative in our daily lives, serving a wide range of purposes across various industries. Let’s look at some of the most common uses of IVR systems.

1. Financial services and banking

Banks use an interactive voice response system as digital assistants to help customers perform various functions like checking their account balance, making payments, or reporting a lost card without waiting for a human representative.

Need to know if that check cleared? Just punch in your account details, and the IVR will give you a rundown of recent transactions. It’s like having a 24/7 teller at your fingertips, minus the small talk.

If you call Bank Of America, you’re asked to enter your unique identifier (card or account number) before being offered menu options. This allows them to check the status of your account and offer a more personalized experience.

2. Healthcare and appointment scheduling

IVRs help healthcare providers streamline patient services. Gone are the days of waiting on hold to book a doctor’s visit.

Now, customers can schedule, confirm, or cancel appointments with a few button presses. Some systems even handle prescription refill requests or provide basic health information. It’s not quite a robot doctor, but it’s a handy first point of contact for many medical needs.

Veterans Home Care, for example, uses Nextiva’s IVR to serve its at-risk veterans.

3. Logistics, shipping, & utilities

Whether tracking a package or reporting a power outage, IVR systems have got you covered.

Shipping companies use them to provide real-time updates on deliveries, while utility providers rely on IVR to manage service disruptions.

Say it’s 2 AM, and the power goes out. With IVR, customers can report the issue and get status updates without waking up a call center employee.

4. Customer service and account management

IVR systems have become integral to customer service operations across various industries, from telecom providers to retail stores. They serve as the first point of contact for many customers, efficiently handling a wide range of basic inquiries and account management tasks.

When customers call in, IVRs can quickly authenticate their identity using account numbers or personal information. Once verified, callers can access a variety of self-service options.

• Resetting passwords or PINs
• Updating personal information (address, phone number, email)
• Checking account balances or recent transactions
• Making payments
• Reviewing order status or delivery information
• Requesting product information or technical specifications

IVR systems significantly reduce the workload on human agents. Customer service representatives can focus on more complex issues that require human intervention, problem-solving skills, or empathy.

You can even integrate your IVR with other business systems (workforce management tools, payment processing, customer relationship management systems) to create a more efficient, personalized experience for your customers while optimizing your operations.

It’s about making every interaction smoother and more productive for both sides of the conversation.

5. Travel and hospitality

Airlines use it for flight status updates and booking modifications, while hotels employ IVR for reservations and information about amenities.

An IVR system is many customers’ first point of contact when booking a room, checking flight times, or finding out more details about an accommodation.

As the technology continues to evolve, we can expect these digital assistants to become even more capable and user-friendly.

Hertz’s IVR includes:

6. Government agencies

IVR systems play a crucial role in managing the diverse needs of citizens contacting government agencies. When calling local, state, or federal offices, callers are greeted with important announcements and can access a range of self-service options.

For example, California State’s IVR offers services like:

• Requesting birth certificates
• Getting information on laws, regulations, or public projects
• Locating nearby schools or farmer’s markets
• Filing for unemployment or disability
• Registering to vote
• Applying for licenses or health coverage

If self-service can’t fulfill a request, callers are connected to appropriate agents based on their selection. This system efficiently routes calls, reducing wait times and minimizing transfers. For complex situations, some agencies may use a dedicated operator to triage requests.

How To Design an Effective IVR System

A well-designed IVR system significantly impacts the customer experience. It’s about creating an experience that’s efficient, user-friendly, and meets customer needs. Creating an IVR system that enhances customer experience requires careful planning and execution.

1️⃣ Offer clear menu options

The foundation of a good IVR is clarity and simplicity. Keep your menus concise and use straightforward language, avoiding technical jargon. Think of how you’d explain something to a friend — direct and easy to understand.

Make sure to also have a dedicated IVR phone number. For example, 1-800-123-4567 might connect to your company’s IVR system for customer support.

To minimize user frustration:

• Offer an “opt-out” option for callers who prefer a live agent immediately.
• Include estimated wait times during high call volume periods.
• Provide a clear path to escalate complex issues to a human representative.

🌐 Improve accessibility

Make your IVR systems accessible for people with impairments. This could involve:

• Offering options for users with visual impairments, like text-to-speech menus.
• Providing support for users with hearing impairments, such as compatibility with TTY devices.

This could go a long way in helping all kinds of users without bias.

🖇 Personalize your options

Personalization and language options can significantly improve user experience. Use caller data to tailor interactions, greeting returning customers by name and offering relevant options based on their history.

In our diverse society, providing multiple language choices makes your service more inclusive and accessible to a broader audience.

☎️ Simplify live agent access

While automation is the goal, always provide a clear path to human assistance. Some callers will inevitably need or prefer to speak with a person, so make this option easy to find.

Also, consider offering call-back options for those who’d rather not wait on hold, showing respect for their time.

📝 Use natural language prompts

The interface of your IVR should feel natural and intuitive. Use conversational language in your prompts, aiming for an interaction that flows like a normal dialogue.

Implementing accurate voice recognition technology can further enhance this, allowing callers to speak their choices instead of relying solely on keypad inputs.

📈 Keep it current

Regular maintenance and updates are crucial. Continuously test your system to identify and fix issues, checking for dead ends or confusing options.

Keep your IVR content current, reflecting any new services, promotions, or changes in your business. This ongoing attention ensures your system remains effective and relevant. That also includes embracing modern technology.

With a modern IVR, such as an intelligent virtual assistant (IVA), you can respond to customers using artificial intelligence and natural language processing.

🤝 Align your IVR with your business

Consider the broader context of your IVR. Ensure it’s mobile-friendly and works well with smartphone interactions.

Align its tone and messaging with your brand identity for a cohesive customer experience. And don’t forget to use IVR data — integrate analytics to gain insights into customer behavior to improve both the system and your customer service.

Challenges To Overcome When Using an IVR (And Solutions)

Implementing an IVR system can present several challenges, but with the right approach, you can effectively address them:

1. Team morale & agent performance

Contrary to common fears, IVR systems can actually boost agent morale and performance. By handling routine queries, IVRs allow agents to focus on more complex, specialized tasks. This leads to more engaging work and improved job satisfaction.

Solution: Position IVR as a tool to enhance, not replace, human agents. Use it to streamline simple requests, freeing up agents for more personalized customer interactions.

2. Navigation complexity

Overly complex IVR menus can frustrate callers, leading to hang-ups and dissatisfaction.

Solution: Simplify call flow navigation. Design direct routes with minimal steps, but ensure they effectively address customer needs. Regularly review and optimize your IVR structure using contact center analytics.

If you’re a small business, fewer menu options are better. Your IVR will likely be one layer (the term for the number of menus you offer callers).

📖 Read more: Creating a Phone Menu in Nextiva

3. Impersonal customer service

The lack of human touch in IVR interactions can be off-putting for some customers.

Solution: Always provide clear options to speak with a human agent. Consider implementing voice recognition to allow callers to request an agent verbally, enhancing the system’s responsiveness.

4. Excessive wait times

Poor call routing can lead to long wait times, starting customer interactions on a negative note.

Solution: Use data analytics to identify and address bottlenecks in your call flow. Implement callback options (like Q-for-Me) to respect customer time and reduce frustration during peak periods.

5. Continuous improvement

To maintain effectiveness, IVR systems need ongoing attention.

Solution: Regularly track key call center metrics like most-used options, average hold times, and success rates. Make incremental improvements based on this data, and communicate significant changes to frequent callers.

Key Takeaway: Enhancing Customer Experience With Modern IVR

Advancements in speech recognition technology and machine learning are constantly improving the capabilities of IVR software. We can expect IVR to become even more sophisticated, with features like natural language processing allowing for more conversational interactions.

AI-powered IVR systems might be able to understand the context of a customer’s request and provide more personalized responses. The future is bright for call centers and contact centers that heavily use IVR technology.

Here’s more on how IVRs are transforming customer service:

• AI-powered personalization: Modern IVRs use artificial intelligence to recognize callers and tailor interactions based on their history. They integrate with CRM systems, offer personalized options, and streamline customer support.
• Advanced self-service: IVRs now handle complex tasks like payments, account updates, and detailed inquiries. Natural language processing allows callers to speak naturally rather than navigate rigid menus.
• Intelligent routing and insights: Sophisticated algorithms route callers to the most appropriate agents, improving first-contact resolution. IVRs also generate valuable data, helping optimize staffing and improve service strategies.
• Omnichannel integration: IVRs seamlessly connect voice, text, and web interfaces, allowing customers to switch channels effortlessly during interactions.
• Visual IVR: Some IVR platforms offer visual menus on smartphones, combining the ease of touch navigation with voice support.
• Conversational AI: Chatbots and virtual assistants are being integrated with IVRs, providing more natural, conversation-like interactions.
• Biometric authentication: Voice recognition and other biometric methods are enhancing security and speeding up caller verification.

As technology continues to evolve, IVRs are becoming increasingly sophisticated, adapting to customer preferences and business needs in real time.

Call center IVR systems now offer contact center as a service (CCaaS), unifying customer data, and allowing personalized interactions based on the customer’s history and preferences.

I Need an IVR System; Now What?

Eight in 10 people regularly have negative experiences with customer service. Traditional customer service can be a pain. But, IVR systems change that by automating tasks and routing calls efficiently.

Here’s what to do before getting an IVR:

1. Define your goals: Improve service, boost sales?
2. Identify automation options: Payments? Sure. Emergencies? No.
3. Plan for updates: Use data to make your IVR better.
4. Understand caller needs: Which departments get slammed?

Once you’ve planned, choose the right partner. Nextiva provides both a basic IVR and an advanced IVR as part of its contact center solution.

Nextiva simplifies the whole IVR setup with a visual call flow designer that lets you intuitively direct inbound calls to your team. More advanced IVRs can be set up with additional planning and fully integrated with your office phone system.

If you need an IVR solution and want to partner with a communications platform, recognizing that customers and businesses deserve better, see what Nextiva can do for you.

Looking to upgrade your company’s phone system to something more reliable, easy to use, and cost-efficient? 

Although there are several options to choose from, chances are you’ve whittled it down to a premise-based or cloud-based  system. 

There are advantages and disadvantages of running your business phone systems on-premise or hosting it in the cloud. That’s what makes it such a tough but important decision. But choosing the right one for your needs can make your business communication stress-free. 

In this article, we’ll share the pros and cons of both options. By the end, you’ll have a much clearer picture of which telephone system fits your unique requirements.

What Is an On-Premises Phone System?

A premise based phone system is one that is physically installed in a building.

It either consists of physical wires around the office, which connects your office’s data center to employee desk phones, or uses IP technology, which allows you to make calls through an internet connection. Either way, the main PBX system is inside your physical workspace.

Premise based phone systems can be expensive to set up because of the equipment needed. For example, you’ll need IP phones and SIP trunking – not to mention a dedicated room in your office for the equipment.

Plus, maintenance is inevitable. You’ll either need your own IT team or a third-party service to come in and repair any problems. These additional costs can be expensive for your business.

There’s also a lack of flexibility that comes with a physical PBX phone system: Anyone needing to make calls needs to physically be in the office. Remote employees can’t dial in and make or receive calls away from their desks.

What Is a Hosted Cloud Based Phone System?

A hosted phone system functions similarly to an on-premise solution. The only difference is that calls are made using an existing internet connection. This gives you a lot more flexibility and freedom that you don’t have with an old-school setup. 

This means that cloud phone systems are usually cheaper than their alternatives because all you’re paying for is the connection to be set up. And since that connection is made through the internet using a Voice over Internet Protocol (VoIP) solution, it’s much quicker to get up and running.

Here’s a quick look at how a hosted VoIP phone system works:

But one of the biggest differentiators between on-premise and cloud phone systems is the fact that remote teams can use the hosted solution. They’re not tethered to a desk phone. Team members on the other side of the world can still make phone calls and join conferences, so long as they’ve got compatible VoIP software installed on their device. 

Speaking of which, you’ll still be able to use your normal, everyday equipment. You don’t need a special IP phone or hardwired desk phone to use a cloud phone system. Simply download the provider’s app onto a laptop, mobile device, or VoIP conference phone to start taking calls. 

And if you’d prefer new equipment, VoIP headsets are a great option. They provide clear and crisp sound, and cordless ones have incredible range. You can take a walking phone call, or sit on the other side of the office and still have a crystal clear connection. 

VoIP desk phones are both powerful and easy to use. They provide mobility not seen in a traditional phone system. Your team in the office can physically take their phones to multiple locations, like home or on the road, and continue working without any interruption.

On Premise vs. Cloud Phone Systems: Pros and Cons

Now that we have a better understanding of both telephone systems, let’s review some of the key differences between the two.

Costs and maintenance

It’s your responsibility to maintain an on-premises solution after the lengthy and expensive setup is finished. Costs and maintenance associated with the upkeep of an on-premise system is one of the main points we touch on in our video:

Fortunately, a cloud-based system takes these concerns off your hands. The most obvious advantages are the cheaper set-up costs and the fact that you don’t need ongoing maintenance (since the host provider takes care of that). 

Flexibility for remote teams

A cloud-hosted solution is much more flexible for distributed and remote teams in multiple locations. Employees don’t need to use their personal devices when they’re out of the office or working remotely. They can use their business phone number on a mobile device to make and receive work calls.

An on-premises phone system lacks the flexibility for remote and distributed teams that a cloud-hosted solution offers, and the physical nature of this system limits the ability to easily scale with the needs of a growing remote workforce.  

Related Article

45 Remote Work Tools To Easily Work From Home or Anywhere

Reliability

It’s also worth noting that hosted phone systems are more often more reliable than their traditional counterparts. Your hosted PBX provider is responsible for the maintenance, security, and general upkeep of your cloud phone system. Of course, you still must have a stable internet connection.

The reliability of on-premises phone systems is contingent on local infrastructure, hardware, and maintenance. And though it isn’t dependent on the internet, it is susceptible to local power outages.

Which Solution Is Right for Your Business? 

We already know that on-premise solutions typically come with large upfront costs and limited features. But that doesn’t mean you should rule them out completely; this option is still favored by some companies. 

But do you absolutely need an on-premise system? Or can you make the switch to the cloud? Ask yourself these four questions to help you decide what’s best for your business.

1. How much can you afford to spend?

Arguably the most important thing to consider when choosing between hosted VoIP and on-premises phone systems is the cost. 

Both providers will give you an upfront cost and monthly service fee when you inquire. But it’s worth noting that, overall, VoIP is much cheaper than premise based phone systems when it comes to total cost of ownership.

Sure, there’s a monthly fee to stay connected, but maintenance costs aren’t as high because it’s managed by your provider remotely without disrupting service. You don’t need IT coming in to a physical office for updates or repairs to the network. 

The set-up cost for VoIP is cheaper, too, because you can use the devices you’ve already got. Remote employees’ personal phones can double as work phones. You can also retrofit your current analog phones or PBX setup by using a VoIP adapter. 

Related Article

How Much Does VoIP Cost? [2024 Pricing Guide]

2. Do you have a remote team?

It’s harder for a remote team member to call into a premise-based phone system. Connections are made physically inside the office from data center to device. That makes them a bad choice for businesses with remote teams. 

However, cloud solutions allow remote teams to thrive. Employees can use this system from anywhere in the world to access their business phone system using Voice over IP. All they need is an internet connection with a strong enough bandwidth to make and receive business calls. 

If you’re unsure whether or not your internet can handle VoIP, use our free network speed test to see if your connection meets recommended VoIP network requirements.

And the best part? Call quality is noticeably better. VoIP solutions send and convert voice waves into digital files using the internet. It has twice the bandwidth of a typical analog phone call, even if the end-user isn’t using a VoIP system themselves.

3. Do you plan to expand your team?

A hosted phone system is more scalable than an on-premise alternative. That’s because you don’t need extra wire lines connected to your on-premise data center. 

Instead, your hosted service provider can add another line to your online account. Any new team member can have an account created within minutes. And since they use the technology they’ve already got, devices like their work laptop or mobile phone can double as their business communications tool. 

This means that expansion of the system makes hosted VoIP superb for growing teams. If you plan to expand your contact center or hire new employees within the next few years, call management is easier with a hosted provider.

4. How much control do you need?

Do you need complete control over your entire network? If so, an on-premise solution might suit your business needs better. You’ve got direct control over the system when it’s inside your office, and you’ll have access to an in-house IT team that probably has a superior understanding of the nuances of your network. 

But if you’d prefer a hands-off approach to managing and maintaining your business phone system, a hosted solution might be ideal. Your provider is responsible for all the upkeep and, since there’s no additional equipment in your office, all you need to do is update the software on the devices you’re using. It’s that simple.

Choosing a Business Phone System Provider

Now it’s time to choose an on premise phone system or a hosted phone system provider to give you the perfect phone service you need. 

Remember, there are four key factors to consider when choosing any new phone service provider:

1. Reliability: How often does your cloud provider have technical problems or outages? The more uptime, the less chance you have of your business phone system shutting down. (Nextiva’s business voice network connected more than 2 billion calls last year!)
2. Accreditations: Check that your provider is ISO/IEC 27001 certified, and SOC-2 and PCI compliant. This shows that their network is secure. If you’re working in specific industries like healthcare, also make sure that your hosted VoIP provider is HIPAA compliant.
3. Security: Both on-premise and VoIP phone systems are secure on the whole. Check that your provider is committed to security by asking for their security protocols, and see if they explain how to report a vulnerability.
4. Important features: Check if your provider offers features that make the system more powerful for your employees. This can include voicemail-to-text, call recording, real-time analytics, and so much more. If you need help breaking down all the different VoIP features, we wrote a guide on the 40+ features to consider in your research.

Once you’ve found a business phone provider that ticks off all four of these key factors, book a demonstration with each. It’s the best way to fully understand what they’re offering and ask any questions about unified communications features your business needs. 

Related Article

The Complete Guide to Unified Communications as a Service (UCaaS)

Nextiva Is Your Cloud-Based Phone System Solution

Hosted VoIP will be the best choice for some businesses. Others might get more value from an on-premise solution that’s in the office. 

But after reading this article and answering the questions we presented, you should have a much clearer idea of what’s best for your particular business. 

If you’ve decided that a cloud-based phone system is the option for you, get in touch with Nextiva. We’ve helped thousands of businesses of all sizes create a strong, robust, and reliable VoIP network with almost-perfect uptime. 

We’re rated the best business phone system by U.S. News & World Report for a reason.

Premise and Cloud Phone System FAQs

Do your sales or support reps spend hours each day dialing numbers and waiting on hold, leaving them with less time to close deals or provide better service?

40% of employees spend at least one-fourth of their work week on manual, repetitive tasks and around 70% say that automation will save that wasted time. That’s exactly where auto dialer software comes in.

An auto dialer automates your outbound calling, freeing up your team to focus on high-value tasks (closing deals, resolving customer issues, conducting research).

We’ll break down how these automated systems work and share real-world examples of how businesses use them to boost outreach, customer engagement, and their bottom line.

What Is Auto Dialer Software?

Auto dialer software is a specialized call center tool that automates outbound phone dialing at scale. It eliminates the need for agents to manually dial numbers, driving better efficiency and productivity.

With an auto dialer, call center teams can focus on speaking with contacts rather than spending time on the dialing process.

Some key features of auto dialer software include:

• Automated dialing from contact databases
• Call routing to available agents Integration with CRM systems
• Call monitoring and recording capabilities
• Customizable dialing modes (predictive, power, progressive)
• Reporting and analytics tools

Although pretty popular in sales, where teams use it to connect with potential customers, it’s not just for salespeople.

Market researchers use it for surveys, debt collectors for tracking down payments, and customer service teams for handling high call volumes. Even healthcare providers and political campaigns widely use auto dialers.

Auto dialer software reduces the time agents spend waiting between calls and minimizes errors like misdialing. This leads to cost savings as teams can handle more calls in less time.

Many auto dialers integrate with customer relationship management (CRM) systems, allowing for better data management and follow-up.

Note that the use of auto dialers is regulated in many countries. In the US, for example, the Telephone Consumer Protection Act (TCPA) sets rules for how and when auto dialers can be used, particularly in telemarketing contexts.

Practical Benefits of Auto Dialers

When used effectively, auto dialer systems offer businesses many advantages.

1. Simplicity

Auto dialers are easy to set up and use — a suitable choice for businesses with limited technical expertise or time constraints. Complex software implementation can be counterproductive, and difficult-to-use systems often face low adoption rates.

Your team needs minimal training, as the software handles the dialing process automatically. Simply put on your headsets and start engaging with customers and prospects.

2. Scalability

Auto dialers can be scaled to accommodate varying numbers of users, making them suitable for businesses of all sizes.

Once you succeed with your auto dialer, you can easily roll it out to all your agents. Most modern dialer software is cloud-based and scales seamlessly. You can easily purchase additional user licenses without hardware investments or dedicated physical space.

Whether you’re a growing contact center, a small business, facing seasonal demands, or expanding to new regions, auto dialer software enables you to scale your operations without complex technical deployments or extensive training requirements.

Auto dialers are particularly beneficial for small and medium-sized businesses (SMBs) with limited resources. By automating the dialing process, SMBs can compete on a level playing field with larger companies that have dedicated call centers.

3. Cost-savings

Auto dialer software has a relatively low initial cost but offers a significant return on investment. On average, employees switch between applications 3,600 times per day, leading to manual errors and inefficiencies.

Automating the dialing process drives down operational costs and time lost to manual tasks is also substantially reduced. Automating the outbound calling process offers additional benefits:

• Eliminates misdials
• Archives bad contacts
• Automatically re-queues missed calls — all without operational time, cost, or effort.

4. Productivity

Outbound dialer software reduces idle time too. It eliminates searching for the next contact between calls and enables agents to spend more time on core competencies: making successful calls and following effective call scripts.

Auto dialers automatically route calls to the available agent, removing downtime, streamlining operations, and enhancing agent productivity. You can improve your sales process by automating callbacks and follow-ups with potential customers.

The software can automatically re-queue missed calls and send notifications to sales reps, ensuring no lead falls through the cracks.

More time on the phone means more sales, improved research, and better customer service.

5. Improved lead generation and management

Many sales reps rely on cold calling and dialing systems with features like answering machine detection and voice response to maximize productivity.

However, managing high call volumes across different time zones can be challenging without proper workflow automation and telephony integration.

Auto dialer software integrates with customer relationship management (CRM) systems like Salesforce to streamline lead generation, nurturing, and follow-up processes.

You can efficiently track lead interactions, automate lead distribution, and timely follow-up with potential customers. All this improves lead conversion rates and overall sales performance.

Some businesses combine auto dialers with outbound SMS campaigns. They might send a text message before a call to introduce the purpose of the upcoming contact, potentially improving engagement rates.

Types of Auto Dialers

There are four different dialing modes (or types) of automated dialers to choose from:

1. Predictive dialer

A predictive dialer uses algorithms to predict when agents will be available to take calls. It automatically connects the next call to an available agent, factoring in metrics such as average talk time, wrap-up time, and agent status.

Key features:

• Dials multiple numbers simultaneously, connecting live calls to available agents as they finish previous interactions.
• Minimizes agent idle time, maximizing productivity.
• Suitable for high-volume outbound campaigns where maximizing connect rates is crucial.

Best for: High-volume outbound call centers.

👉 You may also like How to Create a Predictive Dialer Campaign

2. Preview dialer

In a preview dialer, the software displays information about the next contact before connecting the call (via CRM integration). This allows agents to personalize their approach and prepare for the conversation.

It’s like Call Pop for inbound calls, but in reverse.

Unlike predictive dialing, the power to start the call lies with the agent, allowing enough time to get ready to fully engage with the customer. 

Key benefits

• Reduces abandoned calls by ensuring agents are available before connecting.
• Ideal for complex calls requiring preparation or agent discretion.
• Allows time to personalize calls based on previous customer interactions and company information.

Best for: Situations requiring targeted conversations.

3. Power dialer

A power dialer uses sequential dialing, calling numbers sequentially from a contact list (pre-populated, computer-generated, or purchased).

When you load contacts into the software, it hunts for agents ready to take the next call.

Key features

• Connects calls only to available agents.
• Simple and efficient setup, suitable for basic outbound campaigns. If you’ve used click-to-call software in the past, it’s a little like that.
• Minimizes abandoned calls by ensuring agent readiness before connecting.

Best for: Scenarios where the quantity of calls takes precedence over personalization.

4. Progressive dialer

A progressive dialer combines elements of preview and power dialers. Agents have access to information before a call, and the dialer automatically connects the call after a brief preview period.

Progressive dialers are popular call center dialers, as they provide a hybrid of agent control and speed to connect.

Key benefits:

• Allow limited agent control with a short window to review information before the call connects.
• Balance call efficiency with agent preparation time.
• Suitable for moderate-volume campaigns requiring a balance between speed and agent readiness.

Best for: Call centers with a limited number of agents and B2B sales calls that involve complex products or services requiring a more nuanced conversation.

5. Voice broadcasting

This mode delivers pre-recorded messages to a large list of contacts efficiently. It’s ideal for reminders, surveys, and general announcements.

Key features:

• Broadcasts pre-recorded messages to a large number of contacts simultaneously.
• Efficient for one-way communication without the need for live agents.
• Suitable for reminders, surveys, and general announcements to a wide audience.

Why You May Want To Avoid Predictive Dialers

Predictive dialers can inadvertently violate the Telephone Consumer Protection Act (TCPA) by connecting agents to live calls before they’re ready, leading to abandoned calls and potential legal consequences.

Companies can accidentally incur a high abandoned call rate when predictive dialers connect to live callers but no agent is available to take the call.

Performance also decreases when reaching voicemail, answering machines, or IVRs. Predictive dialers may accidentally call numbers on the Do Not Call Registry, resulting in fines and penalties.

To avoid issues, companies must scrub contact lists against the DNC registry, present accurate caller IDs, and have the means to log calls and opt-out requests.

When using predictive dialers, companies can accidentally incur a high number of abandoned calls. How does this occur?

👉 Read More FAQs: Frequently Asked Questions about Predictive Dialers

Key Features of Auto Dialer Software

To maximize the benefits of auto dialer software, certain features are crucial:

• CRM integration: A seamless connection between your auto dialer and CRM centralizes data management and improves call context. Advanced auto dialer software also integrates with telephony systems and workflow automation tools to streamline operations.
• Call monitoring and recording: Monitoring calls empowers supervisors to evaluate agent performance and identify areas for improvement. Call recordings provide valuable training material and aid in dispute resolution.
• Customizable call dispositions: Categorizing call outcomes (e.g., sale closed, busy signal) facilitates insightful data analysis for better call center management.
• Lead distribution and management: Auto dialer software can streamline lead assignment and follow-up processes, ensuring no lead is missed.
• Real-time reporting and analytics: Gain valuable insights into call center performance with real-time data and metrics on call volume, agent activity, and call duration. Analyze trends and identify areas for improvement.

Best Auto Dialer Software for Call Centers

Although there’s no one-size-fits-all auto dialer solution, here are the top 5 auto dialer software on the market to consider:

1. Nextiva: A cloud-based auto dialer that integrates with Nextiva’s VoIP phone system. It supports various dialing modes, including preview, power, and predictive dialing, and is known for its scalability and customizable features.

2. RingCentral: A cloud-based communication and collaboration solution that offers an auto dialer as part of its contact center solution. It integrates with RingCentral’s other features like IVR, smart call routing, and workforce automation and management.

3. Five9: A popular cloud contact center solution that includes a powerful auto dialer. Its dialer supports various modes, is highly customizable, and integrates with various CRM systems.

4. Aircall: A cloud-based call center software with an advanced auto dialer. Aircall’s auto dialer is known for its ease of use and seamless integration with popular CRM and helpdesk tools.

5. PhoneBurner: A dedicated auto dialer software that offers a range of dialing modes, is highly customizable, and provides extensive reporting and analytics features.

Auto dialer software comparison table

Choosing the Right Auto Dialer for Your Business

If you’ve decided an automated dialer software is right for you, the next step is finding the right one. Review the points in this section to help narrow down your options.

✅ Assess your needs

Interview stakeholders and users to get a holistic view of your unique needs. Combine these with your technical and business requirements to form a shortlist.

Consider the following as a minimum:

• Call volume
• Number of users
• Agent availability
• Campaign goals
• Compliance
• Budget

Once you understand your needs, rank them in terms of priority. Assign a P1, P2, P3, etc., ranking or use the MoSCoW method:

• M: Must have
• S: Should have
• C: Could have
• W: Won’t have right now

Your final list will be very helpful when deciding between different types of auto dialers and which vendor to select. 

Remember to consider all the use cases of your outbound call center when assessing your needs for an auto dialer.

🔍 Research dialer types

You can choose from the following auto dialer types:

Matching the functionality and usability to your business and users will help you get the most out of your auto dialer purchase. 

Be sure users will be comfortable without a preview, check whether you can upload your own data, and make sure you won’t run the risk of violating TCPA guidelines.

Related Article

TCPA Compliance Checklist and Best Practices for Businesses

When you know which type of dialer you need, it’s time to weigh the different auto dialer features and pricing packages.

👈🏼 👉🏼 Compare features and pricing

Look for a good deal that aligns with your budget constraints. Various providers may offer dialers as part of a wider call or contact center platform.

If you’re a formal contact center operation, check with your current vendor about auto dialer options.

Next, consider integration with your existing business phone system. Also, look for call center features important to your business, such as call recording or call monitoring.

Use this opportunity to review your entire call center solution and consider cloud-based communication solutions or omnichannel contact centers for better functionalities.

Since auto dialers handle customer data, prioritizing data security is paramount. Make sure your auto dialer software provider employs robust security measures, such as encryption and access controls.

Related Article

16 Must-Have Call Center Features for Sales Teams

👁️‍🗨️ Read reviews and ask for references

Review sites make your purchasing decision easier. If there’s one vendor with consistently bad reviews, it’s a red flag. You’ve just narrowed your shortlist even further.

Likewise, tons of good reviews are a great signal.

If you’re a member of an industry community or attend events with peers and competitors, ask their opinions on the type of auto dialer they’re using.

Likewise, when talking to vendors about their dialer software, check for case studies of businesses like yours. If you can’t find one, ask for a reference client.

In most scenarios, vendors will be happy to connect you with an existing customer so they can push the deal forward.

📊 Try free trials or demos

Trying an auto dialer out for size is a must. Nearly every vendor will offer a proof of concept, or, at the very least, they should offer a transparent sales demo. If not, it’s not advisable to make a purchase.

The great thing here is that there’s not a lot to demo or test, so there’s no long waiting period to find out if one solution works well or not.

Unlike some SaaS technologies, it’s unlikely you’ll need to provide card details to get set up with a trial. You can fly through functionality testing and arrive at your final few vendors to pick from.

✅ Choose a reputable vendor

Don’t just rely on marketing claims. Evaluate the factors that matter most when selecting a business partner:

• Great customer service: Check review sites, testimonials, and awards.
• Customer support times that match yours: 24/7 availability if needed.
• Recent outages: Consider frequency and resolution time.
• Guaranteed uptime: Aim for a Service Level Agreement (SLA) with 99.99% availability.
• Experience with dialers: Look for a vendor with a strong track record in auto dialers.
• Fully integrated service: Consider if they offer a comprehensive contact center solution.

Use this checklist to work your way to a final decision.

Considerations & Best Practices for Effective Auto Dialing

Auto dialer is a powerful tool for boosting outbound call center productivity, but you need to use it responsibly and strategically to achieve your call center goals while maintaining compliance and ethical conduct.

Here are some key considerations and best practices to keep in mind:

• Familiarize yourself with regulations in your region regarding auto dialed calls. The Telephone Consumer Protection Act (TCPA) in the US, for example, outlines restrictions on telemarketing practices. Ensure you have the necessary consent before using auto dialers to contact mobile phone numbers.
• Maintain and adhere to national Do Not Call (DNC) lists. Scrub your calling lists regularly to remove DNC numbers and avoid potential penalties.
• Use auto dialers strategically to reach a relevant audience who might be receptive to your message. Avoid bombarding people with unsolicited calls, which can damage your reputation.
• Respect your audience’s time. Don’t overwhelm them with excessive calls. Consider the best days and times to reach your target audience to maximize call reception.
• Be upfront about the purpose of your call. Identify yourself and your company clearly at the beginning of the call.

Best practices for optimization

• Start with the right dialing mode: Choose the dialing mode (predictive, preview, progressive, etc.) that best aligns with your business needs and call objectives.
• Data quality: Ensure your call lists are accurate and up-to-date to minimize wasted dials and maximize agent talk time.
• Agent training: Train agents on how to effectively handle calls generated by auto dialers. This may include familiarization with the software, scripting for specific call types, and handling objections.
• Monitoring and analytics: Regularly monitor call performance metrics and agent activity. Use these insights to refine your calling strategies and improve overall call center effectiveness.
• Opt-out mechanisms: Provide a clear and easy opt-out option for recipients of your calls. This could be through a recorded message menu or a designated phone number to be removed from the calling list.

While auto dialers offer incredible efficiency gains, it’s important to acknowledge potential drawbacks. Overuse of auto dialers can lead to agent burnout, and a purely automated approach can negatively impact customer experience.

The key is to find the right balance between automation and human interaction.

Using an Auto Dialer With Nextiva

Nextiva ticks all the boxes on the reputable vendor checklist and would love to invite you to try out our dialer options. 

As part of our full-featured contact center with optimal workflows for automatic dialing, disposition tracking, and robust business integrations in one platform, we’ve helped with countless rollouts and seen some great implementations.

Before you get started, there’s a little information you need to know.

1. Nextiva allows auto dialers (via our SIP trunking service) as long as they’re used for legitimate purposes and the call ratio does not exceed one call per second.
2. If your dialing software has a ratio setting, you will need to adjust it so that it meets Nextiva’s requirements.

All checks out?

Auto Dialer Software FAQs