ROI on Hosted Voice vs. Premise Based PBX

In a recent meeting, we were discussing the current state of the economy, the time value of money, our services, and the return on investment (ROI) between Hosted Voice and Premise Based PBX (click here for a brief description of both).

Our Sr. VP of Sales, Sean Burke offered us the following insights:

Let’s say the charges for our service is $3,000/month.  You may look at that and do the following calculation to determine the ROI on our solution:  $3,000 x 36 = $108,000.

That is merely tells you how much you are going to spend on our service over the next 3 years, but speaks nothing of your ROI.

The best way to determine the value of your investment is by looking at your investment taking the time value of money into consideration.  Let’s look at this from a strict money comparison (which does not include the value of added features, innovation, support, etc.):

Here are 2 examples:

  1. CONSERVATIVE – If your company received a small business loan today from the  Small Business Administration Loan (these are actually pretty hard to get too given the economy)- the rates range from NY Prime (3.25%) + 2.25% = 5.5% to NY Prime (3.25%) + 6.5% = 9.75%.  So let’s use 7% to show a middle ground calculation.  A $3,000 monthly payment over 3 years with a 7% rate is VALUED in today’s money at = $97,159 for a difference of about $10,000 (from what was calculated above based on total $’s spent). But even this calculation is extremely conservative and here is why…7% interest is a very conservative estimate of the value of a growing companies future value.
  2. A FAST GROWING COMPANY (REAL EXAMPLE) – The average growth rate of the Inc 500 companies is 46%.  If you use this number the value of $3,000 paid monthly over 3 years is = $58,057 for a difference of about $50,000. From a business perspective/cash flow perspective – leaders of high growth companies should understand that deferring your payments to monthly amounts so that you can free those dollars to invest in your high growth entity is ALWAYS a smart decision.  Think of it this way…the company is growing by 46%.  Which means each dollar you invest in growing your business is worth $1.46 in one year; in two years it is worth $2.13, in year 3 it is worth $3.11 – so there is a much larger value to them in investing their money INTO growing their business vs. buying PBX’s.

If you are interested in learning more, please contact us – we’d love to discuss this with you.

Also, for a calculator you can use to determine the time value of your money – click here.



Making Sense of Telecom Jargon – Part 1

Listening to someone speak about telecommunication systems can make us feel a little like Ginger in this Far Side cartoon:

It’s an industry that loves acronyms and isn’t afraid to use them.

Over the next few blog posts, we are going to define those common acronyms and terminology associated with telecommunications in the cloud.

Hosted PBX  – PBX stands for private branch exchange.  It is hardware that is stored in your office – generally in a back room or closet that connects all your internal phones to the outside phone lines through something known as the trunk line.  If you want to go really old school, your PBX would look like this:

With Hosted PBX, your system is managed off-site by a business phone services provider (Hi!) and instead of travelling into your business through a trunk line; all calls and PBX features (extension dialing, voicemail, conferencing, disaster recovery solutions, etc.) are connected to your internal phone system through the Internet.

The advantages associated with having your PBX hosted are no upfront costs associated with having to purchase hardware, or continuing costs from maintenance and upgrades.  A hosted solution is a subscription service, so you only pay for the lines and services you need and you can add or delete users as necessary.

Hosted VoiceHosted voice is essentially the same as Hosted PBX, but its features may be limited.

IVR – Interactive Voice Response.  IVR automates interactions through the telephone.  These come in the form of prerecorded prompts that the caller can respond to using dual-tone multi-frequency signaling (the touch tone key pad) or through speech recognition.  You know that drill:

Press or say “1” to hold, press or say “2” to hold….

IVR systems can be either installed in your business or integrated through your business’ network by using a telephony solution provider (hi, again).   The advantages of having your IVR hosted are the same as the PBX:  no upfront costs for equipment, no maintenance, no hardware to manage, and scalability.

Here are a sampling of ways an IVR system can help your business:

  • Capacity to handle high call volume
  • Provides answers to routine customer service questions after hours
  • Lowers call center costs
  • Prioritizes call – urgent problems can be dealt with first
  • Ensures that the caller reaches the right person/department quickly and accurately

Stay tuned for more!

Think Before You Speak: Even the Wires Have Ears

What is the most common statement of praise you get from your clients?  What is the most common complaint your customers have?

Who do you remember more: the angry customer or the happy customer?  More often than not, we remember the angry customer because there is more of a story to tell and usually an immediate call-to-action.  Your CEO probably hears stories of irritated, annoyed and frustrated clients regularly, but how many times do they hear about all the great things you’re doing everyday to deliver first-rate customer service?

Isn’t this information important too?

People share negative stories more than positive experiences – especially socially.  It’s rare for someone to be out with a friend and say, “I got this really nice call center agent on the phone today and she was so helpful.”  You’re much more likely to hear someone say, “The customer service rep I got on the phone today was completely clueless.  I’m switching services.  XYZ Company is awful!”

About 13% of dissatisfied customers tell more than 20 people about their experience (White House Office of Consumer Affairs, Washington, DC), and according to Facebook, the average user has 130 friends.  That means that if 130 dissatisfied Facebook users told 20 people each about their experience, 2,600 people now think your company delivers poor customer service.

Do you know what they’re saying about you?

Whether you’re disputing false statements or endorsing true experiences about your company brand or promoting your product to a potential customer, you need firsthand knowledge of past conversations to settle the dust in the air.   Likewise, when reviewing your team’s strengths and weaknesses, you need positive feedback in your reports.  Conversations and disagreements also happen within your company; you want the knowledge to handle disputes fairly.  Great customer service comes from happy employees, and happy employees receive both constructive and positive feedback.  No one wants skewed data.  You should be able to gather statistics on important keywords, save and share useful evaluations, and train employees with real live recorded examples – all on one platform.

Eliminate the Paper Cuts in Your Preparation

How often does your largest client call…and whom are they calling?

Even if your CEO has never asked you this question, knowing how often and whom within your company your top client calls IS information they want.  The real question is: If you were asked for this information, could you gather it…quickly? 

You of course have filing cabinets filled with old telephone bills that yoEliminate the Paper Cuts in Your Preparationu can sort through to get the information you need, but what if your CEO asks you for this data in a meeting with your peers?  What if they need the information by tomorrow for a meeting with that client?

For many people the next step will be preparing to endure some severe paper cuts as they dig through old phone bills to pull the requested data.  On top of that, if you’ve been tasked with gathering the most recent data including today’s call logs – you have an additional problem: Your most recent bill only shows calls from two weeks ago, and the new bill won’t arrive for another 3 days.  What are you going to do?

Here are your options.

Answer 1 – You can face the music and admit defeat,

Answer 2 – Or… you can implement hosted recording and analytics into your business that give you the power to pull real-time, up-to-date, statistics on the fly.  You can sort by most frequent callers, most active call handlers, or both – and for those complex clients with multiple locations – calls by location.

Gathering information in preparation for large client meetings is a no-brainer.  Gathering the information that best helps you streamline large client meetings to focus on your customer’s needs is challenging.  Knowing how often your clients are calling, who they’re calling, and what they’re saying is the information you need to address their concerns before the fire alarm sounds.  By going with Answer 2, your CEO has the knowledge to accurately and efficiently address the customer relationship, taking them from satisfied to loyal.

By going with Answer 2 …You have successfully avoided possible death by a thousand paper cuts, and your boss is happily on their way to that important meeting – with accurate information.

Hosted Voice: Part II

By Marc Tribbe

Hosted Voice, beyond just a single business presence to a user, also brings additional inherent capabilities to the business:

  • Seamless location integration to tie your branch offices and users together
    • Everyone in the company cannot only see one another across locations, but can simply extension-dial each other as one company.
  • Having an Automatic Disaster Recovery plan
    • Since all calls are going through the ‘Cloud’ or ‘Hosted Service’ now vs. a premises-based phone system in a back closet, the ‘Hosted Voice’ system knows if your location (or even phone) is there or not.  If not, these calls can be configured to redirect to another number.
  • Mobility – Anywhere, Any time, on Any device
    • You have a business phone on your desk, a mobile phone in your pocket, and a new tablet in your briefcase, a laptop, and a desktop computer.  Let’s face it, this is a lot of hardware and there is a good chance they probably don’t talk or sync to one another.  They should, and they can.
  • Application and Integration availability
    • In my previous post, I described a real scenario, which shows the power of integrating not only your devices together, but also how a ‘hosted business presence’ can trigger such events, seamlessly.

This is what others are saying about Hosted Voice / Hosted VoIP (Voice over IP):


“Voice over IP (VoIP) is a family of technologies, methodologies, communication protocols, and transmission techniques for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet.”

“Calls can be made and received using regular phones with adapters, IP phones or computers.  A hosted VoIP service provides a “virtual IP PBX” for an organization without requiring a physical PBX.”

Cisco’s Blog:

“A hosted voice service…is the great equalizer.  All employees, no matter where they’re working, have access to the same calling and messaging features through the hosted voice service, including extension dialing and conferencing.”

I Google as much as the next guy, and while I don’t disagree with these definitions, I would like to apply their definitions to my business.