Live Answering Service Pricing in 3 Easy Steps

Understand live answering service pricing

Post Update: Article update October 16,2018. Originally published on June 6, 2017. 

Do you dread getting your answering service bill? Are you overpaying for these services? Is your answering service pricing competitive? This post discusses these questions and more about answering service rates and pricing.

Today’s blog will help you better understand your answering service bill. Like most smart people, you want to know what you’re paying for on your bill. If you’re a small business manager or owner, you also want to see if you're getting a good ROI?

But understanding the charges on your bill isn’t always easy. Technology companies often create confusing, hard-to-decipher statements. That makes it hard for you to determine your true answering service cost per month.

Below are three easy steps that can help you understand your answering service pricing. Taking these three steps to determine if you’re overpaying for your answering services tells you how much your answering service does cost and if you’re getting a good ROI.

Step 1: Determine Your Pricing Model

The first step is determining your pricing model and what services it includes. Not all answering services are created equal. The same holds for pricing models. Make sure you know what your pricing model is and what services it provides.

A live answering service typically offers four types of pricing models—each of which may include different charges depending on the provider:

Pay by the minute

Billing by the minute is typical. With this model, you pay only for what you use. This approach works for many businesses—regardless of call volume. With this model, the company bills you for any outbound and inbound calls in increments. Some models include a base rate that offers a set number of minutes per billing cycle. Accrued time includes any time an agent engages in some part of a call.

Make sure you know how the provider calculates call time. If you don’t know, ask how. Also, ask your provider if it rounds up your call time and what its overage fees are, which may vary depending on 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 the sheer volume of inbound/outbound calls per billing cycle. Some models include a base rate of a specific number of calls per billing cycle.

With this model, you need to clarify what constitutes a connection. Also, ask about charges for wrong numbers disconnected calls, and what add-on fees accrue with this 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 charge a monthly fee or subscription. 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 call volume is per month.

Providers may not charge overage fees with this model, 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 really have a pay-per-call or pay-per-minute model. Also, providers may offer services like call transfer or appointment setting, but these services don’t usually come cheap.

Tiered pricing

This model is straightforward. Providers offer tiered pricing for different levels of service. The higher the level, the more the cost. This approach usually varies with the provider offering the model. So, verify what your plan includes, what overages will cost you, and what additional charges you can expect.

Step 2: Compare Answering Service Pricing

The second step is determining 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. For example, make sure you’re comparing live answering service pricing from one provider with live answering service pricing from the other provider.

Pricing, of course, is critical when considering providers. No doubt about it. But pricing isn’t everything. Also, there’s a difference between low-cost and affordable answering services. So, consider which you want carefully. Your brand’s reputation is on the line, so look for the best value you can get.

Hiring the lowest cost answering service may seem like a good idea at the time. 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 is the average pricing from provides for the answering service industry:

Cost Per MinuteQualityNote
$0.00 - $0.70Low QualityExpect this pricing for high-call volume or for simple services like message taking.
$0.70 - $0.80Low – Mid QualityHigher call volume or priced for simple services like message taking.
$0.80 - $0.95Standard Market RateThis is the typical price range for call volume of 500 to 5000 minutes.
$0.95 - $1.00Standard Market RateThis is the typical price range for call volume under 500 minutes
$1.00+Specialized ServicesCalls that require specialized agents or the use of third-party software.

What you pay per minute isn’t the only consideration when it comes to pricing. Consider how are a provider’s agent 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 may want to have healthcare-trained agents that can use your practice’s software. Not every answering service offers this kind of quality. So, do your homework.

Also, be careful of pricing that falls below the extremes of our chart. If your pricing is too low compared to competitors, ask why? Is the provider offering a short-term promotion? Are there hidden fees on the bill? Is there be a drop in quality of service?

Customers want an amazing experience every time they connect with you. If they don’t get that kind of service, they’ll bolt. Sacrificing customer service for a lower answering service cost per month doesn’t always make sense.

Step 3: Make Sure You Understand Your Metrics

The third step in this process is what your metrics mean. 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 determine if this is happening to you, you need to not only get the right reports s but also understand how these metrics on these reports accrue and what they mean for your company.

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

  • Secretarial Calls – These are 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 into the answering service, receive updates, get messages, or verify information.
  • Callouts – Agents must call out to complete a task according to your processes. A common example is when an agent follows ups with a patient to confirm that 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, not 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, run from that service!
  • 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 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 these items above. So, review charges carefully.  Look for any additional activities you’ve been charged for and ask your provider to clarify them.

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

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

If you’re starting to review 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 your needs. Otherwise, you’re throwing money away.

Follow this rule of thumb when considering answering service providers: A great answering service is a transparent answering service.