A ‘Radical Transformation’ Is Brewing in SMB Phones

The huge shift from premise-based phone systems to voice over IP phone systems is no longer headline news. You won’t turn many heads by talking about the record number of business owners that are opting for all-in-one VoIP solutions over traditional landline-based PBX systems. What you might be surprised to learn, however, is that underneath this established trend, there is a radical transformation taking place — and it’s shaping the future of SMB phone systems. Much of it is being driven by telephony that’s powered by the cloud instead of copper.

While many businesses still rely on copper lines for phone calls, security systems, credit card processing, and fax, these landlines simply cannot accommodate communication channels and capabilities that customers and businesses have widely adopted. Look no further than text messages and you’ll find that landlines are falling short of keeping up with customer communication preferences. For local businesses that rely on the phone for inbound leads (which is nearly all of them), the functionality of copper lines pales in comparison to what call-tracking-enabled lines have done for years. Unfortunately for business owners, the VoIP packages being sold to them also fall far short of the level of functionality that call tracking provides.

What is this functionality, exactly? Imagine a phone system that tells business owners, as a call is coming in, where the caller found the business, what web pages they visited leading up to a call, and what email correspondence they’ve had with the business previously. Imagine this same phone system were able to intelligently route calls based on time-of-day and interactive voice response menus. Now imagine that this same phone system could provision a new local phone number, with all the capabilities mentioned above, within seconds. You’ve just imagined the world of cloud driven telephony that call tracking companies have been building for years.

As of today this technology is limited to call tracking enabled phone numbers that “sit” on top of a traditional business phone systems — be it copper or VoIP. SMBs are adopting this new functionality in droves, despite the fact that it adds an additional layer of infrastructure, complexity, and cost to their phone systems. The market is beginning to notice as well. This year alone we’ve seen a wave of venture capital investments pour into call tracking companies. We also learned in August that Google was jumping into the call tracking business, as a way to help close the loop on call conversions that AdWords might be driving.

A look into what’s driving this adoption is necessary to understand where SMB phone systems are headed. There are 3 main reasons that call tracking technology is garnering widespread attention on the part of business owners and the people that sell to them.

Reason #1: Focusing on ROI, business owners expect advertising to be more accountable than ever.

Reason #2: Phone calls to local businesses are on the rise due to smartphone usage.

Reason #3: Advancements in cloud technology have made it more powerful and affordable than ever.

Advertising Accountability Is Now An Expectation
SMBs are spending more and more money on advertising mediums like PPC, which provide a level of accountability that was once a marketer’s pipe dream. After all, a business owner only pays a PPC vendor, like AdWords, when someone clicks on their ad and is taken to their website. As SMB spending on online advertising increases, so does their appetite for other accountable means of advertising. Being able to attribute a phone call back to an advertising campaign, online or offline, is something local businesses are craving.

Inbound Calls to Local Businesses Are Increasing
When we looked at a full year of inbound call volume from a representative sample of more than 10,000 companies using call tracking, both big and small, we saw a 24% spike from 2013 to 2014. That sort of increase in phone calls for any business is tricky to explain, until you consider how the growth of smartphones with today’s consumers affects local business discovery.

150 million Americans are using smartphones every day. These smartphone users are searching, reading, chatting, sharing, and shopping in their local markets directly from their devices. Take into account the increasing number of websites, search engines, and advertising platforms that have adopted ‘click-to-call’ buttons and it is easy to see why the leap from searching to calling is so natural. After all, there is that phone inside of every smartphone.

Call Tracking Is More Powerful and Affordable Than Ever
Once a technology exclusively for large enterprises with large budgets, call tracking is now within reach for even the smallest business. Thanks to advancements in cloud technology, companies are now able to sell full-service call-tracking phone numbers at $3 per month and only $0.05 per minute. With spending on location based ads expected to surpass 5 billion dollars in 2014, affordable tools like call tracking that help tie phone call conversions back to those ads are in high demand.

Lastly, cloud driven telephony isn’t just affordable — it’s powerful. Modern call tracking platforms record calls, offer advanced call routing, and ship with real-time contextual caller ID right out-of-the-box. These are features available today, and with the level of investment into the technology this year we can expect much more from our phone systems in the near future. In the next few years many of us in the industry expect cloud driven telephony to become the backbone of SMBs’ communication platforms, integrated directly with their CRMs.

Mark Sullivan is Director of Analytics for CallRail, a call tracking service based out of Atlanta, Georgia that provides services for more than 10,000 companies in the U.S. and Canada. He can be reached via Twitter at @mpsulli.