Essential Guide to Answering Service Pricing

Post Update: Article originally published on June 6, 2017, and updated on June 16, 2020, for accuracy and comprehensiveness.

Our statistics have shown that having a phone answering service could increase your sales by 20%. According to Nextiva, customers want what they want, when they want it and prefer to speak to a live voice that will solve their problems or questions.

If your business is not ready to answer incoming calls, the customer will simply call another company. This is one of the main reasons why having a telephone answering service is crucial to all businesses.

Hiring an answering service brings a wide range of benefits to your business, including:

• Ensures excellent customer service
• Boosts staff productivity
• Helps control labor costs
• Eliminates the need to train new staff
• Maximizes return on investment (ROI)
• Boosts profitability
• Increases reliability, consistency, and therefore customers’ loyalty
• Helps your business cope with the unexpected

Many business owners have taken action and outsourced their calls to a professional call answering center ready to ensure a variety of phone services, including appointment setting, appointment reminders, call overflow management, and after-hours support.

Do you dread getting your answering service bill? Are you overpaying for these services?

Your answering service bill is the most accurate reflection of your investment. If you’re a business manager or owner, your goal is always a satisfactory ROI.

But understanding the charges on your bill isn’t always easy. It is not uncommon for answering service companies to create confusing, hard-to-decipher statements. That makes it more difficult for their clients to determine their real answering service cost per month.

Below are three easy steps that can help you answer these questions:

• How much does an answering service cost
• What are the types of answering service rates
• How do I make an answering service pricing comparison

Step 1: Determine Your Preferred Pricing Model

Elizabeth Wasserman wrote forInc.com, “One of the secrets to business success is pricing your products properly.” The same goes for picking a service that meets your business needs.

The first step is to determine your preferred pricing model and what services it includes. Not all answering service plans are created equal. It may not cost as much as you think.

Many factors drive the cost of an answering service. The main factor is what your business needs. If you need a basic service that involves message taking and just passing them to a company contact, you will pay a lower price. However, if you need additional services, you can expect to encounter different answering service pricing plans based on the type of receptionist answering service you need to ensure high-quality customer service.

An answering service typically offers four types of pricing structures — which may include different charges depending on the provider:

Pay by the minute

Billing by the minute is typical when it comes to professional answering services. With this model, you pay only for what you use. The company will bill you for any outbound and inbound call increments.

Some models include a base rate that offers a set number of minutes per billing cycle. Accrued time consists of any time an agent engages in some part of a call.

Make sure you know how the provider calculates call time. If you have doubts about their methods, simply ask them to simplify their billing process for you.

Ask your provider if it rounds up your call time and what their overage fees are, which may vary depending on the allotted time. Often, they’re inversely correlated to the plan price.

Pay per call

With this model, you pay a flat rate for each call received. So, you’re billed not on how many minutes an agent is on the phone but on the sheer volume of inbound/outbound calls per billing cycle. Some models include a base rate for a specific number of calls per billing cycle.

In this case, you should clarify what constitutes a connection and also ask about charges for wrong numbers, disconnected calls, and what add-on fees accrue with your plan.

Be careful with this model. Providers try to keep calls under a minute to boost profits. That can detract from your brand’s customer service experience, costing your business.

Monthly fees

Many services opt for monthly billing, such as fees or subscriptions. Typically, this fee includes a set number of calling minutes per billing cycle. Plus, you pay a fixed rate for each additional minute used.

Flat rate pricing is tricky, however. It can be a cost-effective model or a budget breaker, depending on how steady your monthly call volume is.

Providers may not charge overage fees when you work with a monthly rate, but when you meet your plan’s threshold, they’ll bump you to the next plan up. If your provider is charging overage fees, you may genuinely have a pay-per-call or pay-per-minute model.

Providers may offer virtual receptionist services for call transfer or appointment scheduling using a subscription model. Review the monthly cost and compare how many phone calls or minutes are included in your plan before signing.

Tiered pricing

Providers offer tiered pricing for different levels of service. The higher the level, the higher the cost. This approach usually varies with the provider offering the model.

A common approach is based on the number of minutes you use per month. Tier one might include zero to 50 minutes and grows as you go up.

This can be an excellent model to start with if you don’t know exactly how many minutes per month to expect. After a couple of months, you should have a good idea of what tier you will need to be in. You can then work with your answering service provider to get the right tier for your business.

Verify your plan and what additional charges you can expect.

Step 2: Compare Answering Service Rates

The second step is to identify if your answering service pricing is competitive.

Comparing prices from different providers helps. Just make sure you’re comparing apples to apples and not apples to oranges.

There’s a difference between a low-cost answering service and an affordable answering service. Choose carefully. Your brand’s reputation is on the line, so look for the best value you can get based on the volume of calls you’re expecting.

Hiring a cheap answering service may seem like a good idea at the moment, but it has its pitfalls that can come back to haunt you later. You may, for example, be sacrificing quality for cost, so tread lightly.

Below you’ll find the average pricing from providers in the answering service industry:

The average cost per minute isn’t the only consideration when it comes to pricing. Consider the way the provider’s agent is going to answer your calls. Are they just answering the call or managing it? What about call agent quality? Are they well-trained?

If you’re a healthcare provider, for example, you will need a HIPAA-compliant answering service and healthcare-trained agents that can use your practice’s software. Not every answering service offers this kind of quality and has the expertise to handle medical calls.

Also, be careful of pricing that falls below the extremes of our chart.

If your pricing is too low compared to competitors, ask yourself why. Is the provider offering a short-term promotion? Are there hidden fees on the bill? Can you trust the quality of service provided?

Customers want a flawless experience every time they connect with you. If they don’t get what they expect, they’ll leave you for your competitors. Sacrificing customer service for the cheapest plan is not always the best approach if you’re looking for effective answering services.

Step 3: Make Sure You Understand Your Answering Service Cost Metrics

The third step in this process is understanding your metrics. Many answering service providers are transparent when it comes to their monthly reports and invoices. Others hide additional charges in the numbers or group charges together to confuse you.

To avoid this situation, access the complete reports, and understand what these metrics mean for your business.

Below are critical answering service metrics your provider may track with a brief description of what they mean:

• Secretarial Calls – These are the calls live agents answer on your behalf. If your provider is billing you by the minute, verify how it calculates time. Some companies round up to the nearest half-dollar or even full-dollar! Make sure you’re paying only for the time you use.
• Check-in Calls – This metric reflects instances where employees need to call the answering service, receive updates, get messages, or verify the information.
• Callouts – Agents must call out to complete a task according to your processes. A typical example is when an agent follows up with a patient to confirm that the hospital staff called them back.
• Patches – A patch is when a live agent transfers the call to another person.
• Outgoing Data Calls – This metric includes text messages, messages sent to pagers (alpha pages), faxes, emails, and other communications other than live phone conversations.
• Incoming Data Calls – As the name suggests, this metric refers to managing incoming data and not to sending text messages or other outgoing data.
• Non-live Calls – This metric refers to agents performing additional duties post-call, like sending out email messages. The time to complete this duty can appear under non-live calls.
• Account Updates – These charges include instances where you need to change your processes in the account. Most high-quality services don’t charge for minor changes.
• Client Maintenance – Like account updates, this metric refers to updating information in your account for agents to use.
• Agent Training – Depending on the level of service needed, agent training may be required to handle calls. Ask if the provider includes training in your pricing plan. If not, ask if it bills it on either a flat or an hourly rate.
• Connect/ Non-Connect – Be wary of connection charges. Some answering services will charge you even if the call doesn’t connect. Avoid these companies. They are trying to nickel and dime you.
• Time in Voicemail – This charge is another sign that a provider is trying to nickel and dime you. If your service is charging you for clients leaving voicemails, keep looking!
• Pre-Announcements – When you open your account, you may have the option to use a pre-announcement to introduce your company. Some providers charge for this service. Others include it for free.
• Hold Time – Being charged for hold time isn’t a regular practice in the industry. But it happens. Avoid answering services that do it.

Answering service providers can have different names for the services mentioned above. So, review the charges carefully. Look for any rare charges and ask your provider to clarify them.

Also, question each line item you don’t understand. This way, you’ll know your real answering service cost per month.

Make sure you’re comfortable with the bill’s charges and have a clear understanding of what you’re paying for.

If you’re reviewing answering service providers, ask for a sample bill or a report to see what metrics it provides before hiring it.

Finally, every company’s answering service needs are different. Make sure the pricing model you select fits your budget and needs. Otherwise, you’re throwing money away.

Follow this rule of thumb when considering reliable answering service providers: An excellent virtual telephone answering service is transparent answering service.

Post Update: The article was updated on January 10th, 2023, originally published on June 16th, 2020. It has been completely revamped and updated for accuracy and comprehensiveness.