Phone interviews are a lot like the kid's game Pin the Tail on the Donkey. You're blindfolded and hoping you stay on target to win the game. Interviews are tough enough in general, but on the phone, there are some unique challenges in making the right impression. And many ways to make the wrong one.
Start out strong
When meeting in person, you are able to give a firm handshake, smile, and make a pleasant greeting. On the phone, you need to do the same without body language to help you. Make sure you show your enthusiasm for the job by immediately saying, "Thank you for taking time out of your busy schedule to talk with me today. I've been looking forward to this call all day." Of course, the tone of your voice must be upbeat and you should sound genuine about the statement (hopefully you are truly happy about the call).
Maintain a conversational tone
Many candidates start strong in the interview and then fade. Your tone should stay friendly. If you smile when you talk, the interviewer can practically hear it come through in your voice.
Don't become a robot on the phone and talk with a monotone or give answers that are too short or non-descriptive. The interviewer is trying to gauge your interest and cultural fit with the company by how you sound. With this in mind, you shouldn't come across as too cocky (confident is fine -- overly confident turns people off). Humor is tough over the phone, and sarcasm is a no-no. It's hard to convey humor when you can't wink or smile, similar to e-mail. Of course, if the interviewer says something funny, you should laugh a bit.
Speaking too fast makes you sound nervous. And, if you have an accent, talking quickly can make you very hard to understand. Maintain a nice and easy pace. A conversational tone (like one you'd use with your friends at the dinner table) will convey that you are at ease speaking with the interviewers.
If you are comfortable standing while talking, you can fill your lungs better and project (which makes you sound confident). Just make sure you don't start pacing -- the extra movement may become a distraction.
Make sure to listen
Most people I know would say they are a great communicator. However, many think of this only as delivering a message. Half (or more) of communication is listening. During the interview, it is critical to keep things going smoothly (usually there is a limited amount of time). Making interviewers repeat the question can be a little annoying. If you don't listen to the questions carefully and end up answering the wrong question, you are conveying you're a bad listener. Bad listeners tend to not follow directions well.
It is also important to not interrupt. Make sure the interviewer has finished their sentence before answering (wait for a pause). If you do start talking over each other, you be the one to stop and let them reset the conversation.
Make sure you are in a quiet place where you will not have background noise. It is preferable to use a landline phone and not your cell phone (which could have poor reception, drop the call unexpectedly, or have battery issues). Speaker phones are not a good idea as they tend to distort your voice or make you harder to hear.
You should also eat a light snack an hour before the call so you are not distracted by your own stomach growling. Have a glass of water handy in case you get thirsty.
Don't give too much information
When interviewing in person, you can watch the interviewer taking notes and see if they are engaged in your answers. When they stop writing, you've probably said enough in answering the question. "Blindfolded" on the phone, you can't do this. Instead, you have two choices. You can pause when you think you've said enough and see if they jump in with the next question. Alternatively, you can simply ask, "Did I provide you with enough insight/examples or would you like more information?"
Take advantage of being unseen
As long as you are not interviewing in person, you should take advantage of being unseen. You can wear comfortable clothes. You should have your resume/notes strategically spread across the desk so you can reference key answers to questions you know you'll be asked. And you can have one little page of reminders taken from this article to make sure you don't slip into bad habits.
Have your own questions
Although a phone interview is less formal than an on-site one, you should still be prepared to ask questions of the interviewer. Asking good questions about the company vision, challenges, or products can help convey your interest in the opportunity (and provide you with more insight on whether you want the job). If they are running out of time, you can ask for their e-mail address and permission to send a few more questions to them.
Wrap up on a high note
Make sure you state that you are looking forward to next steps and meeting them in person. Let them know you will make every effort to accommodate their schedules to have the on-site visit. If it seems like it may be a while before you hear anything, you have time to send a nice thank you note. If they are moving fast in the process, send an e-mail instead.