Sound Telecom

How much should an answering service cost?

Author: soundtele   I   Category : Answering Service, Bilingual Answering Services   I   Date : March 03, 2013

How much should an answering service cost?

Ok - give it to me straight. How much should an answering service cost?

Actually, this is a darn good question. But there is only one way to really answer it - you must have your expectations set properly so that you understand my answer. You have to first decide what level of service you are looking for. Most everyone wants the best answering service in the world for next to nothing. I get that. But is that realistic?

The other day, I spoke to a gentleman for almost 20 minutes. He wanted 24/7 live answering service support. He wanted all of his calls answered by a live person in 3 rings or less. He wanted little to no hold time ever on any of his calls and he wanted us to handle a very complicated emergency message relay involving several different people, email addresses and text message destinations. He finally told me that this "critically important" answering service would only be needed to handle about 15 to 20 calls per month. This was to be set up as a type of "insurance policy" to make sure that his new client (the one that was spending thousands of dollars a month on his services) was well taken care of. So I told the prospect I could provide that level of service for $45/month. He told me that my rates were "outrageous" and he hung up the phone on me. Clearly, this guy did not have realistic expectations.

There are a couple of primary ways that answering services bill for their service - by the call or by the minute. We bill by the minute so I will give you some general guidelines on per-minute pricing:

Per Minute range Quality
$0.0 to $.70 Low quality - buyer beware!
$.70 to $.80 Be careful - Good services use these rates for VERY high volume customers (over 10,000 minutes monthly)
$.80 to $.90 Market rate - you should expect to pay this rate for most usage plans (500 to 5,000 minutes per month)
$.90 to $1.00 Market rate - you should expect to pay this rate for most usage plans that are less than 500 minutes per month.

I have come across several "VERY SMALL" operations that charge a per-minute rate between $.55 and $.70 per minute and provide very good service. But these telephone answering service operations are usually VERY SMALL operations. This means that you have a family-based business that works out of the basement of their home and they have about 30 to 50 answering customers. Yes, these services can provide great service to their 30 or 50 customers but these operations are NOT scalable for larger volumes. Further, they tend not to have any advanced technical features like, oh, text-to-cell message delivery. Also, they run into staffing issues quite frequently and cannot handle call spikes well. These are very small businesses that can only handle very small volumes of calls. If you are looking for $.55 to $.70 per minute answering service, you are not being realistic because the small mom-and-pop shops are the exception, not the rule.

If you really want a quality operation that can handle low, medium and high volume then you should expect to pay somewhere between $.80 and $1.00 per minute based on the call volumes that you send into your chosen answering service. Most answering service calls take a minute and half to process. So let's say you are paying $.90 per minute. This means that an answered call is going to cost you $1.35. Is that too much? Well, if you operate a law practice and a prospective DUI client is worth about $15,000 in legal fees then I would say it is a $1.35 well-spent. What if you are a plumbing contractor? The average after-hour emergency service repair is going to be billed around $300. So is it worth $1.35 to your business to capture a $300 sale? Of course it is.

You should always strive to get the best value for whatever you spend your money on. But when you are shopping for answering service, don't consider price as the ONLY guideline for making a good decision. There are a number of other factors you should be discussing with your vendor:

  • How quickly do your operators answer my calls?
  • Where are your agents based (USA or overseas)?
  • Is there hold time? How much?
  • Do you offer custom message delivery?
  • What kind of reports can I get?
  • Do your operators sound professional, friendly and courteous?
  • Who do I contact if I need to make changes?
  • Can you handle a complicated on-call list of after-hours personnel?
  • And on, and on

Look at the WHOLE picture - not just price. Use price as a consideration but make sure you are getting a quality service that will properly represent your business.

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