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Softphone: What Is It and How Does It Work?

Daniel WeissLast updated on March 28, 2024
15 min

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Softphones represent the future—and for many companies, the present—of business phone systems. Rather than having a desk phone that's connected to a landline, a softphone system is operated using IP technology (internet protocol). As a summary, we could say:

  • Softphones are powered by IP technology and replace traditional hardware phones

  • Softphones use software that enables users to call phone numbers and use voice communication over the internet

  • Key business benefits of softphones include improved customer experience, optimized calling, and hybrid working

  • Cloud-based softphone features include call recording, routing, queuing, and customization

What is a softphone?

A softphone is a piece of software that enables voice communication over the internet, replacing traditional hardware phones. It uses smartphones or computers to transmit voice data to phone numbers through VoIP technology. Softphones offer flexibility, cost-effectiveness, and can be accessed from anywhere with an internet connection, making them ideal for businesses.

With a softphone, calls are placed using desktop software, mobile apps, or an internet browser-based application, rather than a physical dial pad. Softphone technology relies on your device's speaker and microphone system to transmit voice packets to the intended recipient.

While this software-centric solution may seem foreign to new users at first, softphones have similar features to hardphones, plus many time-saving benefits. They're also more flexible in terms of setup and adjustments, and most VoIP phone systems will be more cost-effective—in both the long- and short-term.

Softphones, depending on which solution you choose, can operate entirely on the cloud, which makes them accessible from anywhere with an internet connection. Remote work and work-from-home scenarios are possible with browser-based, mobile, and downloadable desktop phone applications.

How Do Softphones Work?

VoIP phone systems send voice data to recipients using the same pathways that email sends words and photographs. The data (in this case, sound data) are broken up into segments and converted into binary codes through a piece of software known as a codec. These codes can then be sent from computer to computer and “decoded” back into the original sounds.

The process is rather complicated and mostly unnecessary for end-users to understand, but there are a few takeaways users should acknowledge.

For one, even though your softphone service is a web-based application, it can be affiliated with a “real” telephone number, complete with a local area code if desired. This means your softphone is completely accessible to landlines. VoIP software providers can do this by purchasing numbers from “carrier” networks like Voxbone, Plivo, Twilio, and others, depending on your country.

Furthermore, if you're switching from a landline service to a cloud-based option, you can keep your current number through a process called porting, whereby numbers are transferred between carriers with minimal downtime (more on this later).

Second, users of VoIP softphones should be aware of call quality risks and how to mitigate them. Since cloud-based solutions are dependent on an internet connection, they're susceptible to many of the same problems all internet-based applications experience, namely slow performance due to limited bandwidth.

Bandwidth issues manifest themselves mostly through jitter and latency (which can result in choppy- or garbled-sounding audio) and dropped calls. However, these issues can be eliminated with careful planning. QoS (quality of service) adjustments can be made to your router to prioritize voice packets over other less time-sensitive information. Most VoIP softphone services can do this for you remotely.

The Key Benefits of a Softphone for Businesses

Not only do Softphones make a difference for your teams on a day-to-day basis, but they also have an impact on your overall business objectives. Here are a few areas where businesses see results:

  • Increased efficiency: by enabling a softphone’s efficient calling and data sharing, your teams can work faster and have more time to focus on value added services.

  • Reduced costs: by eliminating the need for traditional desk phones and the associated hardware, companies can greatly reduce their expenses.

  • Enhanced customer experience: with more seamless communication and personalized interactions, Softphones provide customers the best calling experience.

  • Increased employee satisfaction: in making the calling process effortless, employees don’t have to worry about missing important calls or being tied to a physical desk phone.

The Advantages of a Softphone

Now that we know what a softphone is and how it works, let's look at some of its key features and the benefits you can gain from a business softphone provider.

1. Next-level customer experience

One of the key features of softphone solutions is their capability to deliver next-level customer experience. This is due, in part, to the level of personalization you and your team can put into the system.

No one likes to be left on hold, but with softphone providers, you can take the pain out of the process and customize the on-hold experience, including personalized messages and even hold music. You can also bring this level of customization to your call queuing.

2. Integration Possibilities

Because a softphone solution exists on your desktop, it can easily integrate with essential business tools to broaden what your sales team can do.

This brings huge benefits, as hardware won't hold them back. The softphone solution can be integrated with a messaging platform, which allows your teams to share instant messages. And with CRMs, they can access and share vital data like contact information.

3. Optimized Calling

Your sales team's time is of the essence. It's crucial they're spending it delivering memorable customer experiences and not on time-draining activities like searching for customer information in between calls.

Softphone providers bring huge benefits to your calling service, with functions like click to dial. Power dialers allow you to make calls in quick succession and automatically pull numbers from a webpage. 

4. Scalability

Unlike hardphones, softphone solutions are flexible, and far easier to scale to your business needs. This means that if you want to scale your sales operations, add more seats, or upgrade what you can do, the right softphone provider will be able to help.

Your team can scale their performance too, with features like automated call recording and automated transcriptions.

5. Hybrid Working

Without a centralized piece of hardware processing your calls, cloud-based softphones enable work-from-home possibilities for positions that would otherwise be in-office only. Using cloud technologies, your business phone system is accessible from anywhere with an internet connection — including your mobile device.

6. Superior Call Quality

Internet-based phone services have gathered a reputation for being less reliable or of poorer quality than their legacy counterparts. This may have been true 10 to 15 years ago, but now, delays in audio and unclear speech have been largely eliminated from VoIP calls due to improved router technology and greater bandwidth prioritization. Innovations like fiber-optic internet and newer cellular data signals mean that IP phone system quality will only continue to improve.

7. Greater Security

While phone system security was a common issue with onsite systems, VoIP security shouldn't be a top concern for end-users.

Your data and privacy are protected by laws and fail-safe measures. Larger VoIP providers are much safer than your individual onsite phone system. Hosting companies employ security teams of thousands to make sure their data is protected. Furthermore, cloud-based business tools are constantly updated to provide the most up-to-date security possible (while legacy hardphone systems aren't).

A Guide to the Phone System Marketplace

Softphones are clearly the future when it comes to delivering memorable customer experiences, but that doesn't mean there aren't many kinds of phone system setups available to businesses.

Some of these are compatible with softphone technologies, while others rely on landline and desk phones. Let's take a look at the phone system marketplace to better understand the benefits and drawbacks of each system.

Twenty years ago, PBX phone systems were the gold standard of business telephony, requiring in-house technology, servers, and physical desk phones for all employees. Many businesses still use these legacy systems and stand by them for their perceived reliability. It's true: if internet service (or, in some cases, power) is disrupted, PBX phone systems will remain operable since they connect directly to a landline.

To modernize these legacy systems, some phone service providers will encourage businesses to upgrade to IP PBX. This hybrid solution keeps the infrastructure of the PBX system (that is to say, onsite servers) but allows users to connect using softphones at their workstations.

While IP PBX software eliminates the need for desk phones, it still comes with the limitations of PBX, i.e. servers have to be maintained by a qualified IT team.

Companies using enterprise phone systems often rely on these solutions to “modernize” their current clients' infrastructure. The end result is an absence of a physical desk phone without the advantages that come with a fully software-based virtual phone system. Additionally, making adjustments to the phone system—like adding new users and numbers—is difficult.

The newest innovation in softphone technology has been the cloud-based VoIP phone system. Cloud-based solutions completely eliminate the need for onsite servers and physical phones. These business phones are downloadable software applications that can run on multiple devices, offering more benefits than other phone systems.

Advantages of Cloud-Based Softphones for Businesses

Cloud-based solutions are not location-dependent. Employees of businesses that have a virtual phone system can work from home so long as they have a reliable internet connection. The cloud has thus revolutionized the way we work,  allowing companies to operate a completely remote workforce and save on overhead costs.

Furthermore, software products are able to communicate with each other in ways that traditional solutions couldn't. For example, integrations between CRM tools and phone systems are commonplace. All customer calls can be logged and documented automatically.

Accessing call recordings is much easier with cloud-based solutions. In many cases, a link to an online audio file is automatically created after each call and can be stored or shared easily. It can be used for quality assurance or training purposes.

Adjustments to call routing structures (how incoming calls are categorized and whose phone rings in what order) were extremely difficult with legacy phone systems. On virtual softphone systems, this process is as easy as adjusting your email inbox settings. Additional customizations, like an IVR system or personalized voicemail messages, are achievable through the admin dashboard.

These types of adjustments used to take hours of a qualified professional's time, but with a cloud-based option, it will only take a few minutes.

How to Set Up a Softphone System

Setting up a business phone system can be an overly-complicated, long-running process. The installation can prove tricky, requiring engineers to come into your office and causing significant disruption and downtime to communications.

There can be other disadvantages such as the skills your team has to learn and the onboarding they need to be a part of as they familiarize themselves with complicated hardware.

With a softphone system, it can be set up in minutes and appears on your team's desktop or phone, making the whole process seamless. This is imperative when you need your sales operations to keep their momentum and can't afford to miss customer calls.

Once you've picked a softphone provider or gone for a VoIP solution like Aircall (where a softphone service is included), getting set up really is as easy as “1, 2, 3”:

  1. 1. Download the softphone provider file, following instructions from your IT team.

  2. 2. Click on the file to begin the installation.

  3. 3. Double-click on the softphone provider icon to launch the service.

There is virtually no installation time and your team is able to get started right away. Softphone providers like Aircall will also come with an extensive online knowledge center where your team can watch videos on its many features once they have learned the basics.

We've all become a little more digitally fluent in recent years, so softphone interfaces shouldn't take us too much by surprise. In fact, you might find the softphone solution you choose resembles other tools in your tech stack and that your team's digital intuitiveness helps get them up and running.

However easy this might all seem, it's best to ensure you're still available to support your team as they begin to use a new softphone provider. Making sure they feel comfortable and confident in handling their daily calls is a priority, and a system with multiple features like this one can support them now and in their long-term growth.

And for times when you might have more complex questions, Aircall also offers live support from its team.

It might be a case of not running before you can walk, but when your team is ready, the possibilities of softphone solutions can help them develop new skills, enhance their autonomy, and share skills with their colleagues. This will all contribute to them delivering a next-level customer experience.

How to Switch to a Softphone Software From Other Systems

Switching to a softphone solution from other legacy systems is simple, particularly if you're adopting a cloud-based phone.

First off, unlike hardphones, you won't need to purchase any specific hardware to accommodate the new system. Cloud-based phone systems like Aircall operate either directly in the browser or via a downloadable desktop or mobile application. That being said, if remote work is one of your business goals, it makes sense to invest in laptop computers or other portable devices.

Another note on equipment: it's vital that your users have quality headsets and microphones. While your VoIP softphone can use the audio outputs and microphone inputs on any device, the overall call quality will be better if the headset is specifically designed for making IP phone calls. The Jabra 40 is a quality entry-level model for teams looking to make the switch to VoIP.

Many new cloud-based phone users worry about downtime when switching. They think, “Will I have to switch phone numbers? Will our customers be unable to reach us?”

But, as we'll explore, transferring your number to a softphone service is another example of how easy this process is.

Transferring Numbers When Switching to a Softphone Application

Number porting is a process involving four parties: you, your current provider, your new provider, and a network carrier.

The bad news is that you'll need to fill out some paperwork. The good news? Your new phone provider will do the vast majority of the heavy lifting.

Normally, all you need to provide is:

  • The name of your current phone provider

  • The name of each number's account owner

  • A full address associated with each number

  • A copy of the last bill for each number

  • If you can provide each number's CSR (Customer Service Record), this document will contain most of the necessary information. This will greatly expedite the process.

From there, all interactions with your legacy phone system will be handled by the new cloud-based phone provider. Porting requests will be scheduled with a carrier (e.g., Voxbone or Twilio). This ensures your numbers are officially active and accessible.

Remember, while the process is simpler in many ways, porting numbers takes time. Requests with carriers must be scheduled at least eight days in advance. This timeframe—plus collecting the necessary information—means you should budget at least two weeks for the full transition.

How to Choose the Right Softphone Provider for Your Business

With so many softphone providers out there, it can be confusing trying to pick just one. The choice is worth dwelling on though. Despite the multifunctionality of softphones, some providers won't deliver everything you need. Some may also hide the feature you're really after behind a pricey membership plan beyond your budget.

When choosing the right softphone solution, ask yourself the below questions to ensure it's a collaborative partnership from the get-go.

Do they offer an integrated service?

A great softphone service is one that integrates with other software and apps. That's not to say that your softphone service won't upskill your sales or support operations on its own. However, by opening the door to integrations, you can take your sales processes in new and exciting directions.

It could be a question of software and apps you already have as a part of your tech stack. It could also be that your softphone provider is the first step in taking your business in a new and improved direction. The important thing is that it's possible.

Think about whether you want your softphone provider to be able to draw customer data from a CRM system. Or if you're focused on a customer's purchase history, an eCommerce integration is essential. Internally, you might want to implement call recordings and transcriptions into your training or even share quick updates via a team messaging system.

The sky's the limit when it comes to integrations, so don't limit your possibilities with a softphone service that isn't able to integrate.

Are they a true partner for my business?

When choosing a softphone provider, you need to ask whether they're able to be a true partner for your business.

This can come down to the customer support a softphone provider offers and whether you and your team feel supported, both during the onboarding process and while you're using the system.

It's important to select a softphone solution that aligns with your goals and how you plan to use the system. This way, when you're growing, you're still performing.

Ask yourself about scalability too. It could be that the phone lines your softphone provider offers from the start is just what you need, but what about in the future? Picture where you want your business to go and ask yourself whether this softphone provider can get you there.

Is it compatible with your business?

We might assume that all software providers are compatible with existing tech. However, there's nothing worse than signing up for an extended plan with a softphone provider only to find out it doesn't work for half of your team's preferred operating system. Aircall helps you avoid this by being compatible with all major operating systems and devices, but not all providers do.

Ask your team to do a quick straw poll to find out which OS they use. From there, you can see if the softphone provider you want meets their needs. While the setup might be hassle-free, throwing a new device into the mix for your sales team won't be.

Many softphone providers also offer free trials. Use these as an opportunity for you and your team to get hands-on and make sure it's the right solution.

Another factor you want to consider is cost. It could be that a free version is enough for your team or the price plan with all the features you need is way beyond budget. Ask your team what functionalities are essential to help you decide what's worth paying for and what isn't.

Do your protocols match?

While softphones are mostly easy to understand, there's one area that demands particular attention, and that's protocols.

Protocols are how data is processed and transferred over any given network. To ensure a conversation can happen, both endpoints need to use the same protocol. Despite “protocol” serving as the last letter of VoIP, it's actually an umbrella term for several protocols required to transfer voice and video.

Still with us? Good!

When it comes to choosing a softphone solution, you need to ensure your softphone protocol is the same as your VoIP provider's protocol.

If you've chosen a cloud-based calling software like Aircall, then rest easy. Your softphone and VoIP provider are one and the same. But if you've gone for two separate providers, you'll need to check if their protocols match. Otherwise, you won't be able to make calls.

You can read more about protocols over on Aircall's VoIP Protocol FAQ.

Connecting with Aircall

Making the switch to a cloud-based softphone may seem like a daunting task, especially if it's on short notice. But really, it's one of the easiest and wisest decisions you'll make. If you're curious about the process and want to know more, reach out to the Aircall team.

Published on May 5, 2020.

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