Cloud Phone Systems vs. Landline Phone Services: What’s Best for Business?

14 minute read
14 minute read

Even now, with the rise of various chatbots, messaging apps, and AI assistants, over 60% of customers prefer to contact businesses over the phone. Moreover, 40% prefer to speak to a real person over the phone, especially when dealing with a complex issue. These numbers are indicative of why businesses need to choose the best option to handle phone calls — a cloud phone system or a landline business phone service.

Let’s delve into different types of business phone lines, go over the advantages of the newest advanced cloud business phone services, and discuss which business areas can gain the most benefits from a commercial phone service.

The Main Types of Business Phone Lines

As mentioned, customers prefer contacting businesses over the phone rather than online. That shows how important it is for any brand to have a quality telephone service for its business.

Let’s take a look at three types of business phone lines and analyze how each of them works and which one is the best solution.

Legacy Public Switched Telephone Network (PSTN)

The PSTN is nothing more than the traditional telephone we are all familiar with. What started with laying a fixed copper phone line has now turned into telephone poles and lines across the globe. This landline phone service is well-established and straightforward; it doesn’t require an Internet connection and comes with plain old functionality but requires additional maintenance costs and service.

But how exactly does this business phone landline work? The public switched telephone network consists entirely of copper phone lines. Each phone is hardwired to a copper wireline and is able to make calls and receive calls to this line exclusively.

Cloud Phone Systems vs Landline Phone Services - PSTN

Once a caller dials a number and establishes a signal, it converts sound waves (your voice) into electrical signals transmitted via those copper phone lines. Electrical signals first enter the local exchange office, where they get routed to the correct destination through cables. The process repeats once a caller receives these signals in the form of sound waves and answers.

The single telephone line does carry some inconveniences for departments receiving multiple calls simultaneously or when offices need to redirect individuals to other branches.

Due to the advancements of other business phone services, such departments are updating their business phone services, and the PSTN is being decommissioned worldwide.

In fact, it’s predicted to be phased out in most countries by the year 2030, which will spin traditional landlines out of service.

PBX Phone

The Private Branch Exchange, or PBX, is the next greatest alternative to a PSTN service, which is significant for big businesses with expanding departments and numerous business phone lines.

This telephone system, set up within an enterprise, interconnects multiple internal phone lines that employees can all dial or one external phone line. This telephone service for business is used in big or expanding industries to save the costs of connecting an individual line for each of the company’s phones.

The external phone line works exactly like the PSTN line, but the PBX internal lines do vary depending on the system. If we talk about a traditional PBX phone system, it is based on a copper telephone line, which enters the industry’s premises and gets connected to a PBX box.

Cloud Phone Systems vs Landline Phone Services - How_a_Traditional_PBX_Works

That box contains switches and other copper phone lines that are issued to all other business phone landlines in an industry. The internal industry phones can connect with one another without even accessing the external line, and all of them can dial someone outside the industry’s premises.

Unlike the traditional PBX, cloud business phone services allow companies to access new extensions, features, and security — all geared toward optimizing office phone services. On top of that, it enables enterprises to have control over incoming calls and leverage IVR, automatic call distribution, and call routing features.

Ultimately, it makes more sense for businesses cost-wise to opt for such solutions as Cloud PBX instead of managing and servicing multiple business landline phones.

VoIP Phone

A VoIP, or Voice over Internet Protocol, is the ultimate solution for small businesses or those looking to optimize their business phone services. A phone system such as VoIP doesn’t require installation and maintenance costs, attracting new businesses without a PSTN in place.

For instance, here’s the size of the global mobile VoIP market and how it’s projected to grow in 2023 and 2024.

Cloud Phone Systems vs Landline Phone Services - statista

Source: Statista

The business VoIP phone system is basically a synonym for cloud PBX since it’s accessible over a cloud-based IP network. Such a business phone line system converts sound waves into digital signals that travel through an Internet connection.

These signals then turn into the same sound waves they once were, and that’s when they reach their final destination.

  • Research shows that companies can save anywhere from 50% to 75% on communication costs using a business VoIP phone system instead of traditional landline service.

The business VoIP service has been growing rapidly. In fact, the market is expected to reach $83.0 billion by 2026. Not only do businesses respect its cost-effectiveness and ease of use, but they also enjoy its features that bring new insights and extensive opportunities, unlike business landline phone services.

Top Benefits of Using Business Phone Line

Now that we have looked into the types of cloud and business landline phone services let’s look at the benefits of what we consider the best solution — a VoIP phone service system. Based on statistics, businesses claim that VoIP has helped them handle phone calls better, increased their message management by 63%, and improved their performance remotely by 57%.

Phone System for Small Business

Source: Phone System for Small Business: What Is It and Why You Need It

1. Cost-Effective Solution

Unlike traditional business landline phone services, VoIP has much more to offer. One of the most talked-about advantages is the cost-effectiveness of a VoIP system. What’s great is that the appealing prices don’t affect its quality.

  • On average, a traditional copper phone system can cost anywhere from $20,000, which is only an on-premises service, while a cloud business phone service like VoIP can start from $0 and doesn’t limit you to a specific area.

Furthermore, traditional landline business phones charge for each call with an additional fee for the distance. The bigger the distance, the more lines need to be passed, making it more expensive. A study showed that after switching to a VoIP system, a business’s average communication cost savings were around 45%.

2. Call Forwarding and Integration

Since all calls use a connected data network, call forwarding and integrated calls can be reached with a few clicks with a VoIP business landline phone. In contrast, a traditional landline makes this almost impossible — you can’t physically switch wire connections. In fact, the conference call feature is stated to be a top VoIP tool as it increases phone small business productivity by 65%.

3. Advanced Call Analytics

You’ll notice an increase in employee productivity the moment you implement a cloud phone system. Unlike business landline service, this system has it all, including call analytics. With a traditional landline, it’s impossible to watch all departments and review the call duration, voicemails, and how many calls they accepted and handled successfully.

According to a Cisco annual report, VoIP features improve small business productivity by 77%. On top of that, employees who know that all their calls are stored in a database show greater productivity.

4. Voicemail Functionality

A cloud business phone service is great at storing voicemails on a data cloud that companies can reach whenever they want. However, such systems often limit the number of voicemails coming through.

When it comes to the landline business phone systems, they can support mailboxes. The only issue here is that the deleted messages cannot be restored.

Just five years ago, the average voicemail response rate was estimated to be 5%, so you can only imagine how low it is now. Wondering what caused such a drop? Companies just don’t find answering voicemails effective and say it takes up too much time.

The companies that transferred from the landline phone business system to a cloud one can now minimize their voicemail count by choosing specific call destinations.

5. VoIP Can Be Easily Integrated With Other Business Tools

Unlike a landline phone for business, VoIP integrates well with other business tools, like email, calendar, or Microsoft Outlook. This function is great for scheduling appointments, boosting sales, and easily reaching customers other than by phone. That feature can be useful for brands targeting millennial audiences since 61% prefer to communicate with businesses over text.

6. Increase in Customer Engagement

VoIP systems come with features that enhance the customer journey and experience and minimize employee communication malfunctions. Such features as call waiting ID and IVR are designed to streamline call flows and improve response rates. As for the call forwarding feature, it allows departments to direct customers to the right sales reps or agents. That is when it gets interesting — call forwarding can work regardless of the system, whether cloud VoIP or VoIP on a business phone landline.

7. Improved Professional Image

What’s great about a VoIP business phone provider is that you have freedom and many customization possibilities. For instance, a cloud phone system like Phonexa’s Cloud PBX works hand-in-hand with call tracking software, allowing brands to control inbound and outbound calls, leverage the call scoring system, use local, vanity, and toll-free numbers, and get insights into phone conversations.

Cloud Phone Systems vs Landline Phone Services - graphic 1b

Source: The Definitive Guide To Call Tracking: How It Works & What Is Its Impact

Moreover, businesses can customize the actual call experience. With call tracking, they can capture valuable data about customer engagement and ensure accurate attribution.

According to Forrester, over 62% of contact centers use IVR and self-service speech solutions in their customer service phone centers. To make the experience more unique, companies can add personal greetings with the help of Phonexa’s IVR system. This way, instead of regular dial sounds, callers can hear custom hold music and greetings that create a polished professional image for businesses.

8. Better Employee Mobility

As of 2023, 12.7% of full-time employees work remotely, while 28.2% work hybrid. As years go by, these numbers will only rise, making it essential for companies to provide tools for remote jobs.

Just in 2020, there were over 204 billion VoIP users worldwide. The great thing is that cloud-based business phone service operates online, and no area or distance affects its quality or price. With the right business telephone service and a good Internet connection, companies and individual employees can access contacts and files from any place and stay accessible to clients.

9. Call Supervision

The cloud-based business phone service is equipped with call logging and recording tools, where managers and supervisors can monitor calls in real-time and create call reports. The tools also allow for call whispering, assisting busy agents with information about a specific client, the reason behind the call, or caller ID.

Statistics claim that 86% of customers expect conversation to shift smoothly between departments and different agents. Therefore, such cloud phone system features allow supervisors to keep control of the departments, ensure all customers are happy, and take over a problem quickly if required.

How Brands Can Get a Business Phone Line

When considering a PSTN, traditional PBX, or VoIP business phone service, you need to make sure it’s the best fit for your company, whether a small business or a big corporation. It should be cost-effective and ensure the best environment for customer engagement.

If you’re looking for a comprehensive solution with a cloud-based business phone service, check out Phonexa’s pricing plans or schedule a consultation to find out how you can get more functionality and ensure lower usage fees with our cloud phone system.

What Companies Can Benefit the Most from a Business Phone Line?

A business phone line can be beneficial to a wide range of industries and company departments. The cloud-based telephone service for business isn’t industry-specific, meaning any company or institution can adopt it and use the tools and features that most benefit the business. Let’s take a look at some of the industries where a business landline phone service is crucial.

Insurance Companies With business phone lines, insurance companies can accelerate their insurance office technology while improving their customer support efforts, providing real-time emergency assistance, and building better customer relationships.

A comprehensive insurance tracking technology would also help gain trust and ensure the best customer experience.

Banks and Financial Firms Clear and reliable communication is crucial for firms working in finance. Powered by tech tools, they can leverage various forms of business phone service and its integrations for faster scalability and growth.

Banks should be able to maintain trust, provide timely information, and handle sensitive matters quickly, and a dedicated business phone line can surely help with that.

It’s worth mentioning that 94% of companies have reported better security after transferring to a cloud-based business phone service.

Educational Institutions The education industry has embraced business VoIP solutions to improve communication between teachers, students, and their parents, whether that’s for calling in sick, applying for a new class, or providing needed documents.

Without a business phone service in place, many miscommunications and unresponded calls ought to happen, causing trouble for both institutions and students.

Government Institutions

Government institutions often have to deal with the influx of calls, making it challenging to manage without the right phone system and features like call routing. While many institutions still use business phone landlines, switching to cloud-based business phone services seems inevitable.

Tech Companies IT and software companies constantly expand and introduce new projects with new team members. Therefore, they must have a business phone system that will migrate and change as quickly as their requirements and teams.

Statistics show that 84% of IT managers consider mobility a crucial factor playing a major role in boosting PBX growth.

Healthcare Institutions

No matter how large a healthcare organization is, whether public or private, business phone lines are essential in any department.

Implementing a cloud-based business phone service is a way to stay connected, respond fast, and easily handle all incoming emergencies. In fact, cloud-based phone systems can be a substantial corporate asset that reduces over 90% of expenses and provides noticeable productivity changes in routine tasks.

Hospitality Business While many other industries are focused on organization, the hospitality industry focuses on making the customer experience as best as possible.

Cloud-based business VoIP solution allows such industries to achieve their mission with intelligent call routing and instant call responses.

Real Estate Firms

Real estate agents must be available around the clock. Otherwise, they risk missing an important client or big business opportunity. A commercial phone service like VoIP can guarantee no calls will go unnoticed or unattended.

Home Service Providers Home service professionals are closely dealing with customers. They need a cloud-based business telephone service and a powerful call management solution to better address their needs and provide the best service.

This way, they can maximize their efforts and ensure they clearly and — most importantly — efficiently communicate and interact with their clients to offer the right service at the right time.

Key Takeaways

A designated business landline phone service is essential for any business, big or small. For those who have yet to implement a telephone service for business or choose a suitable type, we strongly recommend a cloud-based business phone service. It leverages all the Internet capabilities, comes at a lower price, increases productivity, facilitates teamwork, and is simple to use.

Implementing a cloud-based business telephone service today is essential, especially if you want to gain a competitive edge and be able to provide an outstanding customer experience.

Gain access to the single operating solution for partner and performance marketing to scale your business with confidence, or book a free consultation with one of Phonexa’s experts to learn how our software suite can meet your business requirements.

Frequently Asked Questions

What is the best way to get a business phone?

One of the easiest and most reliable ways is a landline for business. However, businesses tend to shift their focus to cloud-based business phone lines. Here, you usually get several virtual phone numbers included in each available plan, providing access to scalable business solutions with only the needed features.

What are the main types of business phone calls?

There are different types of calls that are most common in business, such as warm, cold, traditional, follow-up, support, and others. Depending on the call type, businesses can prepare specific call scripts and launch agent training to ensure a smooth call experience for customers.

What is PBX vs. VoIP?

As we mentioned previously, a Private Branch Exchange (PBX), in its traditional sense, is an on-premise telephone system that is not connected to a data network. VoIP (Voice over Internet Protocol) is a flexible phone system technology.

Got Questions?

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Phonexa is the leading all-in-one platform for call tracking, lead distribution, email, marketing, and digital marketing. The Phonexa staff is responsible for authorship of Phonexa blog posts.
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