What is a VoIP Phone Extension, and How Does it Work?

Virtual business phone system

Do you have several employees, departments, and maybe offices? If so, you probably get inbound calls from people seeking service from different departments. Also, your employees need to communicate without moving from one office to another.

Effective business communication – both inbound and outbound – is one of the main challenges small businesses face. Without an efficient approach, internal communication becomes troublesome and time-consuming. It’s even more complicated if you have employees working remotely.

For this reason, you need a dynamic communication solution that connects all of your employees, enabling effective collaboration and communication. The solution? A VoIP phone extension.

What is a VoIP Phone Extension?

If you’ve ever been to an office looking for someone and the receptionist dialed a short number and then directed you to the person, you probably have an idea of a phone extension. A VoIP phone extension is a short number – usually three, four, or five digits – that a caller can dial to reach an organization’s specific department or employee.

You set up and assign phone extension numbers to represent different segments of your team, such as internal lines in conference rooms and departments. As with traditional lines, phone extensions are linked to your business phone numbers and function in the same way. The only difference is that, unlike phone lines, you can use extensions to cover many departments and employees without investing in extra lines.

They are also efficient and convenient. If a client needs to track their package, they can dial the short number and immediately get connected to your shipping team. Similarly, users within the same organization can reach one another by dialing the three-digit extensions instead of hunting for the entire 10-digit phone number.

Types of VoIP Extensions

  • Standard Extensions: With a traditional extension, you get all the functionalities of a business phone system. These include unlimited inbound and outbound calls, local and long-distance, and concurrent calls. You get all of this plus a fully-featured phone system included in a single price.
  • Virtual Extensions: On the other hand, virtual extensions only give you access to unlimited inbound calls. They are thus less expensive than regular extensions.

Virtual extensions usually rely on an external device such as a cell phone. You can seamlessly route calls to the cell phone through the extension, and the caller won’t notice the difference.

The ability to tie a cell phone to a business number makes virtual extensions incredibly useful for people managing the business on the go, such as field sales agents. Another helpful feature is forwarding calls to an off-hour answering service.

H3: Related: What is an IP PBX Phone System and How Does It Work?


How Does a VoIP Phone Extension Work?

Usually, VoIP extensions are four-digit numbers, though some providers offer three and five-digit ones. As mentioned before, extensions function like regular phone lines. Whenever you need to call another user, just dial the short number assigned to them.

With VoIP extensions, users can dial each other regardless of the recipient’s location. VoIP supports calls over the internet. As long as the users have an internet connection, they can make and receive calls.

If you have remote workers or branches in different locations, communication becomes more accessible and more efficient. The extensions can even be directed to your workers’ phones, allowing them to be part of your organization’s phone system and receive essential work calls.


How a VoIP Phone Extension Benefits Your Small Business

VoIP phone extensions aren’t only for large organizations. This approach to communication can also benefit small businesses.

Makes Your Business Appear Large and Unified

A VoIP extension allows all your workers to be part of the same phone system. For a small business, this can be a powerful tool and create the appearance of a large and unified business. It doesn’t matter which business phone number a customer calls; the recipient can quickly transfer them to the right person.

Alternatively, the auto-attendant can forward the calls to the extension and connect them to the person they seek. This can give your caller the impression that they’re dealing with a large and established business. As a result, you’ll present yourself professionally and be better poised to attract potential customers.

They’re Convenient and Save Time

One of the main benefits of VoIP extensions is the convenience and time-saving they offer. You don’t have to dial 10-digit numbers for every department and office. Plus, dialing a three-digit number consumes less time than a 10-digit one. It may be a matter of seconds, but they add up quickly.

Workers in customer support, sales, tech support, and reception benefit more from phone extensions. They handle a lot of calls daily and transfer some to other users. Extension dialing makes it easy for them to handle and transfer calls. They’ll also be less prone to making mistakes.

Imagine if a customer support agent transferring a call from an angry customer to the finance department about billing makes a mistake and dialing tech support instead! A bad situation becomes worse, which your organization can avoid with a simple three-digit extension.

You Can Create a Local Presence

Another reason to consider getting a VoIP extension is that it allows you to create a local presence. You can use it as a local number that transfers the calls to the central business phone number.

You can target a specific area and make your business look locally based. Consequently, you’ll gain more local leads and potential conversions.

When convenient, 91% of consumers prefer doing business with small, local businesses. And even when it’s not convenient, 74% still search for opportunities to support them. Whether you have an office in a region you’re targeting or not, VoIP extensions create a local presence anywhere. Every call is a local call with VoIP.

Allows You To Track Essential Metrics

Wondering how many users call your tech support department for queries about your newly-developed app? A phone extension can help you track the metrics by the number of calls that come into the extension.

You can track metrics such as:

  • Average call duration
  • Call completion rate
  • Conversion rates
  • Call source
  • Call volume
  • First time vs. repeat callers
  • Return on investment for specific campaigns

Tracking your call metrics helps you see the big picture of your business’s performance. They can give you better insights into your marketing campaigns, help you identify calls with high conversion rates, where they are coming from, and how you can improve.

Related: 6 Benefits of a Multi-Line Business Phone System


Help You Offer Better Customer Service

Extensions make it easy and quick to transfer a customer’s call. You can resolve their issue quickly and leave them satisfied. No one likes waiting in line as the customer support agent dials the correct 10-digit long number to transfer them. If they can do it quicker, your customers will likely have a positive experience with your service and are more likely to return.


Make Calling Your Business Convenient With a VoIP Phone Extension 

Finding a trustworthy business communication solutions provider is the first step toward getting a reliable VoIP extension system for your business. Phone.com allows you to set up as many phone extensions as you need. You can route calls to different departments or if you prefer a direct line for every employee, add a separate phone number for each of them.

The feature is part of our advanced business phone system that offers other enterprise functionalities like auto-attendants.

If you’re already using our business phone system, here’s how to add extensions. If not, sign up today and get a business communication service that keeps you connected from anywhere and allows unlimited extensions for a fraction of the cost.




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