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Every year, Software Advice speaks with hundreds of buyers from small businesses looking for VoIP solutions that are designed for their needs—granting us unique insight into the needs of today’s software buyers.

We recently analyzed a random sample of these interactions with small-business buyers (from companies with annual revenues of $100 million or less) to uncover their most common pain points and reasons for purchasing a new business phone system.

Key Findings:

1. More than half of prospective buyers were investing in business VoIP service for the first time.
 
2. Buyers were primarily concerned with reliability and scalability when evaluating new phone systems.
 
3. No buyers were interested in an on-premise IP-PBX, while a vast majority wanted a hosted solution.

Many Seek Upgrade From PSTN or Cellular Connections

Thirty-one percent of the buyers we spoke with were still using a landline. Additionally, 13 percent relied exclusively on their cell phones for business communications. Combined with the 14 percent who said they had no phone system in place, well over half of buyers were looking to invest in VoIP service for the first time (57 percent).

Prospective Buyers’ Current Methods

Buyers Want Both Reliability and Scalability

Seventeen percent of our sample specified lack of reliability as a pain point with their current phone system: Connectivity problems and dropped calls frequently induced headaches for the buyers we spoke to.

A number of other buyers noted that they were at the system's maximum capacity or otherwise needed more phone lines to accommodate company growth (15 percent).

One business owner reported that during an uptick in sales, the company’s “current phone system [couldn’t] keep up with the demand.” Scalable solutions, such as SIP trunking (see our definition of this service here), appealed to these buyers as a way to grow their businesses without dramatically growing their phone bills.

Top Reasons for Software Purchases

In addition to seeking a system with a lower price, increased functionality was another major incentive for buyers looking to switch to VoIP (the former came in at 15 percent; the latter at 14 percent).

One buyer lamented that “no one told us how to use the capabilities of our current system,” and a number of buyers noted the difficulty of incorporating new features.

On a related note, support was a major pain point for a number of buyers. For instance, one buyer was incensed by the fact that every time he needed to make changes to the system, he had to call someone else to do it.

Improved call quality was perhaps not as major a concern as telecom professionals might expect. Only a few buyers reported audio quality issues such as “static.” This finding tallies with the results of a recent survey we conducted on public concerns about VoIP, which found that only 10 percent of consumers were worried about call quality with VoIP services.

Small Businesses Seek Cloud-Based Systems

The concern with reliability and support that our analysis uncovered correlates with a high level of interest in hosted (Web-based) solutions. None of the small business owners with whom we spoke wanted to purchase an on-premise IP-PBX: 77 percent of our sample wanted a Web-based solution, while 23 percent didn’t specify a preference.

Deployment Preferences

This finding suggests that many small businesses lack the IT staff necessary to maintain an on-premise system. Buyers in this niche tend to prefer a hosted solution that they don’t have to maintain themselves and that grants administrative and user access via an Internet browser.

Auto Attendant Tops List of Desired Applications

Nearly all of the buyers we sampled were seeking private branch exchange (PBX) functionality from their phone systems—and those who didn’t specify this preference probably wanted a PBX without knowing the word for it, since PBX functionality is the backbone of a business phone system.

After the basic need for extensions and directories, an auto attendant was easily the most in-demand application among the buyers we sampled. The popularity of the auto attendant stems from its ability to lend the air of an enterprise to even a small business, such as a local florist. For instance, one business owner noted that she wants an auto attendant to give the appearance that hers is a larger company than it really is.

Top-Requested Applications

After auto attendants, staples of business communications such as conferencing and faxing were more of a priority than specialized applications such as computer telephony integration (CTI) and automatic call distribution (ACD) for most buyers.

This is perhaps because only 10 percent of our sample consisted of the contact-center employees who would most need these applications to handle high call volumes.

Buyers Want Voicemail-to-Email and Number Portability

Though journalists have been proclaiming the death of voicemail for nearly a decade now, more buyers requested this feature than any other (28 percent). Additionally, buyers expressed a high level of interest in caller ID (9 percent) and voicemail-to-email functionality (7 percent).

Another very popular feature (and one offered by many VoIP service providers) is number portability (7 percent). One buyer insisted that keeping his original number was a requirement, and a number of other buyers in our sample expressed similar sentiments. Lack of number portability can thus be said to be a dealbreaker for many small-business owners.

Top-Requested Phone System Features

Call-center specific features such as hold music and interactive voice response (IVR), which allows users to navigate menus with their voices, were less in demand among the buyers in our sample.

Buyers Seek Unified Communications Solutions

An overwhelming number of our respondents (76 percent) were interested in "integrated suite" as opposed to "best-of-breed" software. In other words, these buyers tended to favor unified communications (UC; the integration of modes of communication such as chat, email, video conferencing and voice calling) over dedicated software packages for each kind of communication.

Integration Preferences

While the most advanced UC solutions on the market today are well beyond the financial reach of small-business owners, VoIP systems make it much easier to integrate voice calling with other modes of communication. This is primarily because most VoIP technology routes audio streams with the session initiation protocol (SIP), a signaling protocol which also serves as the basis for other UC features such as chat, presence and video conferencing.

Most Buyers Looking to Implement System Immediately

Sixty-four percent of the buyers with whom we spoke wanted to get a system in place within 30 days. A number of these buyers noted that they needed to get something in place as soon as possible.

This finding suggests that many buyers prioritize ease of setup and maintenance when choosing a new system. Only 1 percent of our sample was willing to take a full year to make a decision and get a new system installed.

Prospective Buyers’ Time Frames for Implementation

Few Buyers Have IT Backgrounds

Most of the buyers with whom we consulted owned their own business (42 percent), and many others were in a management position (39 percent). Only 6 percent of our sample listed job titles in the IT field.

Demographics: Prospective Buyers by Job Title

This is likely because most of the businesses in this market niche are still too small to support a dedicated IT team. And without IT professionals to handle potential hiccups, these buyers are going to put a premium on technical support and ease of maintenance when choosing a solution.

Buyers Need Extensions for Less Than 10 Employees

Fifty-nine percent of our sample consisted of businesses with less than 10 employees. While such businesses are not yet ready to invest in the highly sophisticated IP-PBXs tailor-made for the enterprise, our chart showing top reasons for phone system purchases attests to these buyers’ interest in scalability.

Demographics: Prospective Buyer Size by Number of Employees

Sixty-two percent of buyers’ current systems supported between one and nine phones, and 76 percent were relying on nine phone lines or less. This correlation shows that many buyers in this space are using one or two phones per line—a number that could potentially be reduced if they move to VoIP systems.

Buyers Represent Broad Spectrum of Industries

Communications infrastructure is part of the nervous system of almost every kind of business. Interest in VoIP is not at all restricted to industries with particularly high call volume—in fact, only 13 percent of buyers we sampled worked in retail or contact centers.

Demographics: Prospective Buyers by Industry

The “Other” category represents industries that each accounted for less than 3 percent of our sample, such as education, transportation and insurance.

Conclusions

Our data shows that small businesses are shifting toward VoIP solutions, even though many still rely on landlines or cellular phones. Moreover, these buyers are interested in solutions that are not merely reliable, but also scalable: They want to add users easily and cheaply as they grow. Few buyers in this market niche have an IT background, so they place a high premium on both reliability and effective technical support.

Finally, small-business buyers are increasingly interested in unified communications solutions that offer features such as voicemail-to-email. Because 13 percent of the buyers we sampled are totally reliant on their cell phones for business communications, small-business owners are interested in remote access to, and control of, their phone systems. As VoIP technology continues to advance, it will become easier for small businesses to integrate voice calling, video conferencing, email, voicemail and chat using technologies that were formerly restricted to the enterprise.

Methodology

Software Advice regularly speaks with organizations that contact us seeking new VoIP software. To create this report, we isolated a random sample of 362 interactions with small-business buyers (those from companies with annual revenues of $100 million or less) from 2013 and 2014 to analyze. It should be noted that these findings exclusively represent those buyers who contacted Software Advice for guidance on software selection; they may not be indicative of the market as a whole.

If you’d like to further discuss this report or obtain access to any of the charts above, feel free to contact me at danielharris@softwareadvice.com.