The first Voice-over-IP (VoIP) application was created in 1991, more than 25 years ago. At the time, VoIP was hailed as the future of telecommunication. Now it’s 2017 and the future is here, so where is this telecom utopia we imagined in the 90’s? Despite widespread adoption, finding a VoIP provider, picking the right mix of services, and getting everything set up is still difficult. To make matters worse, prices vary widely by each provider further complicating a process that 25 years of competition didn’t iron out.
Don’t worry if you are confused about what mix of VoIP services makes a good fit, you are in good company. The marketplace was designed to confuse. By pricing out different tiers of features and functions, VoIP providers make it much more difficult to compare their pricing to competitors. Small business owners who’d rather not spend weeks or months doing a deep dive into what they need and buy more than is necessary. As a result, small businesses who’d rather not spend days researching VoIP solutions unintentionally opt into overpaying. They choose a service provider they’re familiar with presuming the marketplace is competitive enough to keep their pricing within a reasonable range. Unfortunately, VoIP providers don’t earn the benefit of the doubt that small businesses grant them.
VoIP Pricing, how does it work?
The markups on VoIP services from familiar national brands capitalize on small businesses confusion. Since the cost of each phone number can range anywhere from $20 to $200 per line, monthly bills vary drastically, and those year-long service agreements that provide a discount aren’t really a bargain at all. The initial markup is so high that annual commitments don’t necessarily translate into reasonable costs for small businesses.
Since shoppers can’t accurately compare pricing, the incentive to compete through pricing is low. Large VoIP providers understand they have a captive audience and benefit more from increasing margins on services rather than offering competitive pricing. To help small businesses get the right mix of services at a reasonable cost, we recommend deploying a few simple strategies that should take no longer than an afternoon.
What small business can do about confusing VoIP pricing
Most of us have become accustomed to shopping and purchasing online, but picking up the phone is still one of the best ways to do an end run around all of the marketing fog. Most business owners don’t know exactly what mix of features and functions they need, but that’s not a problem. By picking up the phone and talking to a customer service agent, service recommendations are free and provide a good basis for comparison.
- Make a list of the recommendations from the agents in a spreadsheet, and ask what each feature and function is included in a package, or priced out individually. With 3 or 4 VoIP providers recommendations listed out, a total price range should become clearer. If prices still vary widely, keep researching and adding service providers until a few total service prices cluster.
- Eliminate the service providers with prices that seem either unreasonably high or unreasonably low from your list.
- Call the VoIP providers back who recommended similar solutions and total prices to see if they can offer more competitive prices or add features within the same total – a little haggling can go a long way.
At this point, small businesses should have more than enough info to make an educated decision about what mix of features and pricing makes the most sense for their unique needs. While shopping for VoIP isn’t as easy and a 1-click purchase on Amazon, it’s also not rocket science. By adding a few hours of research, small businesses will get the service they need and save thousands a year in unnecessary VoIP costs.