What Is a Virtual Phone Number?

What is a virtual phone number?

A virtual phone number is a telephone number that isn’t tied to a specific device or location. It uses voice-over-internet-protocol (VoIP) technology, enabling users to make secure phone calls from anywhere with a stable internet connection.

“This is only possible with cloud-based VoIP phone systems that don’t rely on old-fashioned copper landline wires, also known as Plain Old Telephone Service or POTS,” explained Mike Langberg, senior director of corporate communications at Ooma. 

>> Learn More: What Is a VoIP Number?

Part of the appeal is the clean, clear audio connections and the remarkable level of flexibility virtual numbers offer. For example, you can: 

• Choose a local number: Administrators can assign a virtual phone number to almost any area code, a process called direct inward dialing. Selecting a local number can help you build trust in a community. 
• Choose a toll-free number: Choosing a toll-free number can help you project a national presence, and as a bonus, your customers won’t be charged when calling you. It also shows that your business puts customers first.

How do virtual phone numbers work?

Think of a virtual phone number as a digital go-between for voice communication between two devices. Anyone with a desktop computer, laptop or mobile device can use one. Here’s how it works: 

Calls travel over the internet, not physical lines. 

A virtual line sends a call over a broadband internet connection by converting audio into a digital signal. These lines are created and managed in the cloud, allowing them to reroute calls to existing lines or team members’ devices — no physical wiring needed.

“Because VoIP systems don’t rely on physical wiring, other than an internet connection, getting started is easy,” Langberg noted. “Businesses can typically sign up for service online, select phone numbers in their area code of choice, and set up their system within an hour or two.”

You can manage everything over a cloud PBX. 

You can bundle multiple virtual lines to form a virtual switchboard. There’s no need for a complex or expensive local private branch exchange (PBX). A single broadband connection supports multiple lines, and you manage everything via an intuitive cloud PBX that’s easy to operate. 

From a desktop or mobile app, you can:

• Route calls
• Turn on call forwarding
• Activate voicemail
• Set up auto-attendants 
• Create new phone numbers

For example, an administrator could log into the cloud PBX and create a virtual toll-free number that forwards calls to different team members’ devices in a contact center. Representatives could use VoIP handsets or apps like Zoom or RingCentral on their smartphones, tablets, desktops or laptops. 

Traditional phone lines vs. virtual phone lines

Traditional and virtual phone lines operate in fundamentally different ways. Here’s an overview of some key differences. 

>> Learn More: VoIP vs. Landline

9 benefits of virtual phone numbers

Virtual phone numbers offer numerous benefits that might appeal to your business, including the following. 

1. Virtual phone numbers incur fewer costs.

The costs associated with traditional business phone systems can quickly add up and become prohibitive, especially as your business grows. In contrast, virtual phone numbers are more affordable. Here’s why: 

• No hardware costs: Because a virtual line doesn’t require specialized or dedicated devices, your hardware costs are minimal. 
• Free or inexpensive long-distance calling: Many virtual numbers offer free or reduced-cost long-distance calling that can substantially reduce your telephone expenses. This is particularly helpful when you’re expanding into new communities or regions and must reduce operational costs as much as possible.
• No need for copper wire connections: Unlike traditional phones, you don’t need a copper wire connection to the local exchange or a separate handset. This leads to significant cost-saving opportunities with VoIP-based virtual phone numbers. “By moving from POTS to VoIP, businesses unlock a broad range of advanced features and can also significantly lower their monthly phone bills,” Langberg noted. 

2. Virtual phone numbers serve multiple markets.

Because anyone can get a virtual number for any location, you can create local numbers to serve any region. This decreases costs by avoiding premium charges from long-distance calls as you expand into new neighborhoods and find new clients. 

“Businesses can often choose virtual numbers with specific area codes to create a local presence in a targeted geographic area,” explained Joe Petrocelli, vice president of communication services at AT&T Business. “This can be particularly beneficial for businesses looking to connect with local customers and establish trust by [building a recognizable presence].”

3. Virtual phone numbers are easily scalable.

Without the need for dedicated hardware — and with no line limitations — creating additional virtual phone numbers to scale with your business is easy. When you’re building a sales team and hiring more employees, you can simply call your administrator and add all the virtual lines you need.

Langberg pointed out that it’s also easy to reassign or repurpose lines. Similarly, multiple numbers can all route to one internal line, making call processes more efficient. 

“Multiple virtual numbers in different area codes can be set to seamlessly ring through to an organization’s main number so there’s only one line that needs to be monitored,” Langberg added.

4. Virtual phone lines allow for custom numbers.

When you have a memorable or toll-free customer support phone number, your customers gain a sense of security and recognition. Virtual phone numbers make it easy to set up specific numbers to help your business look more professional. 

Whether it’s a toll-free number or a vanity number like 1-800-CONTACTS or 1-800-FLOWERS, a virtual number can help reinforce your brand identity. 

5. Virtual phone numbers allow for optimized call data and tracking.

It’s not easy to record, digitize or analyze a traditional phone call. But because a virtual call is already digital, it’s easy to record, transcribe and archive with just a few clicks. You can also evaluate the content to identify trends, questions or pain points.

With all the information a virtual number provides, a business can track key internal performance indicators, such as average call length and customer satisfaction, to improve its services.

6. Virtual phone numbers enrich your customer information knowledge. 

With an easy way to record and archive phone calls, businesses using virtual phone services can quickly compile critical know-your-customer information, such as customer preferences and broader business trends. This type of data helps an organization detect fraud and comply with various government regulations. 

Compliance is a particularly important factor for businesses in highly regulated industries, like banking, healthcare, financial services and insurance, where verifying a customer’s identity is essential and HIPAA laws and other privacy regulations must be followed.

7. Virtual phone numbers improve security.

Establishing a secure phone line for conducting business is easier than ever with a virtual phone number. Because it utilizes VoIP technology, a virtual number can be encrypted and protected behind multiple layers of firewalls and other security measures. These protections keep out prying ears, so you can keep your business running smoothly without interference. To ensure security, check with your internet service provider to confirm that your virtual business phone number is encrypted.

8. Virtual phone numbers improve flexibility. 

Because you can tie a virtual number to any PC or mobile device, you can receive calls from anywhere in the world. This number assignment flexibility allows calls to be routed to your device of choice and is a big plus for businesses managing remote or mobile teams.

“With virtual phone numbers, businesses can manage calls more flexibly and efficiently, often integrating with other digital tools for seamless communication management,” Petrocelli noted.

This flexibility is especially helpful for companies with remote work plans and employees who travel often. They can still answer a support call or return a sales prospect’s call. “Calls can be forwarded to any device, enabling employees to work remotely or on the go,” Petrocelli added.

9. Easy and enhanced integrations.

One big advantage of virtual phone numbers is how easily they integrate with other tools your business is already using. A T-Mobile spokesperson pointed out that “virtual phone services typically offer many advanced features like SMS integration that enhance productivity.”

These integrations go beyond texting. Langberg noted that virtual phone systems often connect with top CRM and business platforms like Salesforce, QuickBooks, Square, HubSpot and Zoho. That kind of integration can boost efficiency and make it easier to track customer interactions across your entire business.

How to get a virtual phone number

Setting up a new virtual phone number is remarkably easy; some service providers, such as Google Voice, even offer one for free. “One of the great things about virtual phone numbers and VoIP services is that no physical infrastructure is required other than an internet connection,” Langberg explained. “Desktop and mobile apps for VoIP services typically are available on all major platforms — Windows, Macintosh, iOS and Android.”

To get started, select a provider like RingCentral, Ooma or GoTo Connect. Then, create an account, select a plan, choose your area code, and the service will generate a new number for you.

Just make sure you have a strong internet connection, since that’s the backbone of your virtual phone setup.

Jeremy Bender and Eduardo Vasconcellos contributed to this article.