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Is It Time to Hang Up? Why VoIP Providers are Losing Customers

Tony Campbell
Tony Campbell

It typically takes a lot of time, effort and money for a hosted VoIP provider to win a new customer.

Why then are so many customers left dissatisfied with a service that promised so much, yet delivered so little?

Besides the actual on boarding, setup and installation of a VoIP phone service, there is a significant amount of upfront work required to simply find a new customer in the first place. Marketing departments are targeting every possible channel with differentiated messaging to deliver a steady stream of leads to determined sales teams. When one of these prospects finally converts into a new customer, this initial effort becomes a distant memory, and we often see providers neglecting both new and old clients alike.

After more than 10 years helping and advising businesses at, we think we have heard pretty much every gripe, complaint, problem or issue related to business phone service. If your company is currently considering a new VoIP solution, watch out for some of the upcoming red flags, ideally before you sign-up.

Related Article: 5 Reasons the VoIP Market Will Reach $88 Billion by 2018

Here are some of the top reasons that VoIP providers are losing customers:

1. Poor Customer Service

Very few people know how to effectively troubleshoot a problem with their phone service. Top notch customer support is, therefore, critical to the majority of customers. Some typical complaints are:

  • Long hold times.
  • Support is off-shore and as such creates frequent complaints around poor communication skills.
  • Lack of knowledge results in inability or delay in resolving an issue.
  • Very slow response to tickets or emailed issues.

2. Technology Issues

The biggest problem in this area is a result of a poor quality Internet connection and not enough bandwidth being available to support VoIP. This is rarely the providers fault but as it affects voice quality, the VoIP provider will typically get the blame. Utilizing a bandwidth speed test tool prior to installation can significantly help avoid any issues while network monitoring tools can ensure this does not become a problem as a company's network grows.

3. Overall Quality of Product/Service Drops Over Time

Providers can lose long-term customers by figuratively taking their eye off the ball and letting a great service become mediocre. Frustrated users often complain about:

  • Dropped calls
  • Voice quality issues
  • Frequent outages resulting in no service availability
  • Lack of new features
  • Unreliable or out of date hardware (phones, adapters, etc)
  • Costs jump significantly after new customer specials or incentives disappear. Many providers also require customers to sign long-term contracts to receive the best pricing. At this point in time, many existing customers decide to look for an alternative solution with better terms.

In addition to these, providers may have inadvertently introduced problems by changing to less reliable wholesale carriers, or by directing calls to least cost routes, as opposed to higher cost best quality routes.

Related Article: Kiss Your VoIP Troubles Away

4. VoIP Service is No Longer Required

No matter how great a service is, there will always be some customers that simply do not need it anymore. While this should ideally be a very small portion of cancelations, it is still worth looking at to see why this situation might occur:

  • Moving to Cell-Phones instead of desktop VoIP phones. Some smaller businesses may decide that it is more productive and cost-effective to use cell phones for all their business calling needs. While using a cell phone is, in fact, unlikely to be cost effective, there may simply not be any need for an additional in-office solution. In this scenario, a smart provider should look to offer a BYOD (Bring Your Own Device) mobile solution, and can tempt the customer with a lower cost service that offers key features such as an auto-attendant, a mobile app and business caller-ID.
  • Company Acquisition. In most cases, the acquiring company will move all IT and Telecom over to its existing network infrastructure and services.

Of course, if a company is going out of business there will also be no need to continue paying for a phone service.

5. Never Win the Customer in the First Place 

While it can be argued that you are not really losing a customer if they never were a client in the first place, there is a lot to be gained from evaluating up front processes and seeking continuous improvement. Here are just a few of the areas where providers frequently mess up:

  • Poor Online Reputation Management. People tend to believe what they read on the Internet so ensuring your brand has a consistent message is critical. This includes monitoring review sites while encouraging customers to write testimonials for your services.
  • Ineffective Pre-Sales Processes. Sales teams are not always as effective as they believe themselves to be. Many prospects are lost due to slow response times, lack of follow-up, pushiness, poor listening and providing unwanted information. We have even heard many instances where the customer has never even had a response to an inquiry.
  • Product and Price Disconnect. While most providers offer very similar feature sets, overall pricing can vary widely if there are premium feature costs in addition to various contract requirements. Features and pricing need to be frequently re-evaluated to ensure competitiveness.

It's a buyer's market for business VoIP phone service so providers need to be continuously monitoring customer cancelations and evaluating opportunities for improvement.

If you are in the market for business phone service, ask providers about their customer retention rates and probe deeper to see if there are any cracks in their products or services.

Image Credit: Monkeybusinessimages / Getty Images
Tony Campbell
Tony Campbell Member
Tony Campbell is the co-founder at Marc One Technologies and has spent over 20 years in the telecommunications and networking industries. As an entrepreneur and business leader, Tony brings a wealth of hands-on experience in both start-ups and fortune 500 companies and is focused on helping small to medium sized businesses with telecommunications and cloud solutions. Tony also works directly with enterprise customers to provide marketing services for new customer acquisition.