What is a virtual phone number and how does it benefit small businesses?

What is a virtual phone number?

A virtual phone number can be used on any device customers use to reach your business. As a VoIP technology, these numbers are entirely cloud-hosted and, since they operate on any VoIP endpoint, they’re very portable. These numbers are never tied to a physical location, so answering an inbound call from your business number at your desk or a local coffee shop on your smartphone is equally easy.

This is critical for remote teams. Rather than having your agents appear geographically dispersed, all outbound calls appear to be from your business’s preferred location. This also works for inbound calls. When customers reach out to your business in New York, agents living on the West Coast will be able to receive the call. 

Virtual vs. physical phone number

The best way to compare a virtual phone number to a landline number is to look at how each is attached to a business. Landline phones use a copper wire-based physical phone network, and numbers are specifically assigned to hardware at your business location. These phone numbers cannot be affixed to any endpoint not attached to this network via wires. Additionally, these numbers are restricted to one user at a time.

With VoIP-based virtual numbers, also called direct inward dialing (DID) numbers, the phone number itself is cloud-based. If business locations have internet connection, calls from these numbers can be received or made, even if the locations are dispersed geographically. Without the need for the supporting copper wire system, the options for endpoints are extensive.

How virtual phone numbers work  

Virtual numbers work by connecting to a VoIP system. VoIP routes calls using data packets that are converted from voice signals and sent from caller to caller. These numbers connect to other numbers on other VoIP, landline, or cellular networks. Unlike other network types, VoIP numbers are based entirely in the cloud and are not tied down to any physical or cellular network. 

With a virtual phone number, you’re also allotted four potential phone number types:

• Local: Inbound and outbound calls using a local DID number are associated with a specific location without being in that location. Surveys have shown that at least 62% of customers prefer working with a smaller local business rather than a national one, and a local number adds that feeling. 
• Toll-free: A business with a toll-free number appears more national. These add convenience because customers won’t spend extra to reach your business. These numbers usually have 1-800-style prefixes.
• Vanity: Vanity numbers can be either local or toll-free but tend to use an alphanumeric combination to make the number more memorable. A good example would be 1-800-FLOWERS.
• International: These numbers are for global expansion without creating branch offices in the intended territory. You provide your international customers with a number in their home country, allowing them to reach your office locally. 

How to get a virtual phone number

This depends on your virtual phone number provider. For example, most providers deliver a new phone number to their users at sign-up with options to purchase additional numbers as needed.  

How to get a free virtual phone number

Some providers, such as Google Voice, provide a virtual number at no cost―this is useful for solopreneurs. While these services use VoIP technology, their free plan does not include key business phone features.

Benefits of having a virtual phone number for small businesses 

The number one benefit of having a business virtual number is that it isn’t bound to a physical location. This means that a solopreneur makes and receives calls easily, even without an office, using any smartphone with a VoIP app. This opens up new geographic location options since these aren’t tied to a particular location. Even the smallest business can work with customers hundreds or thousands of miles away without issue.

These DID numbers help create work/life balance. With a professional business number, customers have a means to reach you during work hours. When work hours end, they can be sent to voicemail without disturbing your time. 

Disadvantages of virtual phone numbers

One of the major downsides of virtual phone numbers is how expensive they can become. If you’re looking to expand into multiple local jurisdictions, you’ll have to purchase numbers within these areas. As you expand, expect to keep paying monthly fees for the service.

With landline phones, emergency services link calls to physical locations quickly. With virtual numbers, this isn’t always possible because these numbers are cloud-based. While many providers, such as RingCentral, have Enhanced 911 service, it’s not as reliable as standard 911.

The takeaway 

Virtual numbers add convenience and professionalism to reaching a business. Not only are these numbers usable anywhere but they allow you to reach new domestic and overseas markets. These numbers are often offered by the top VoIP providers with a slew of useful call management features to help small businesses grow.

Are you wondering where to start on your DID number journey? Consider contacting a VoIP provider. Most will have at least three virtual phone number types available and many will provide a free number with their service.