What is the average cost for a telephone answering service?
A phone answering service costs $1.12 per minute on average, or about $1.75 per call.
Keep in mind that the prices for answering services vary depending on many factors. Comparison shopping in the world of phone answering services can be a challenge. Transparent pricing isn’t always available, and measuring one company’s offerings against another when you compare answering service prices can be like comparing apples and oranges. Fortunately, we have researched the industry prices for 2020 and this guide will explain everything you should know when it comes to the cost of an answering service.
A quoted price should only be the start of your research into answering service pricing. You don’t buy a car, hire employees or choose a place to live based on the lowest available price, so why should you do the same with answering services? The price quoted to you for the cost of an answering service should be one of many factors you consider before making a decision. Rather than looking solely at the sticker price, it’s worth considering the big picture to truly get the most cost-effective phone answering service plan.
This in-depth article will help you easily understand different pricing models, billing practices, hidden costs, and the scope of pricing plans for answering services. We’ll also delve into the differences between cheap services and affordable ones, and how value – not price – is key. There is a lot at play when it comes to the true cost of answering services, but be sure that we have done our homework and will make things as simple to digest as possible.
Our 2020 Answering Service Price Research
We gathered 2020 prices for our answering service comparison from 18 different providers across the industry (ours included) that are headquartered in the United States. That collective data is what brought us to conclude that the average cost for an answering service is $1.12 per minute or around $1.75 per phone call. Call duration can obviously vary, so the industry mean of 1 minute and 35 seconds per call was used to calculate the average per call price.
Since answering service prices are often dependent upon the plan you choose, here is expanded information to give you a closer average estimate based on your usage.
- Average cost per minute for plans that include 100 minutes or less: $1.33
- Average cost per minute for plans that include 101-499 minutes: $1.13
- Average cost per minute for plans that include 500-1000 minutes: $1.00
- Average cost per minute for plans that include over 1000 minutes: $0.87
Answering services often charge a slightly different rate for any minutes used over the plan allotment. Here are those figures:
- $1.13 is the average overage rate.
- $1.30 is the average overage rate for low use plans.
- $1.16 is the average overage rate for medium use plans.
- $1.05 is the average overage rate for high use plans.
Note: There are a few call answering companies out there that charge between $2 and $3 per minute, but we did not include them in our calculations as they are outliers that would skew the data.
This may seem like a lot of information to take in and likely raises additional questions. Read on to develop a clearer understanding of what this all means and how you should use the data.
How Do Answering Services Charge? What You Should Know About Answering Service Fees and Plans
There is an answering service available at just about every price point. The good news is that you’ll be able to find one that fits your budget. The bad news? You may initially feel overwhelmed by your options. While it’s true that answering service cost comparison isn’t always straightforward, a little education can help you decide which one is right for your organization.
Pricing for answering service plans can be confusing since there is no concrete law for how companies must bill for service, but here are the three ways found throughout the industry:
- Per minute billing
- Per call billing
- Per unit billing
Let’s take a look at each.
Per Minute Billing
This is the most common method of charging for answering services. That is why we used per minute pricing to define the average cost of an answering service. With this style, answering services charge clients for the time they spend on the phone speaking with callers. This is the fairest way of billing because answering services are compensated for their time just like in many other industries. Most answering services have three to five different standard plans to choose from that include a block of minutes with a rate charged for any overage time. Clients choose their plan based on their expected call volume and, depending on the provider, can scale their plan up or down as necessary.
Per Call Billing
Pay-per-call answering service rates are another billing method that shoppers may come across. The service charges clients a given amount based on how many calls they receive. The rates here can also fluctuate based on call volume. For instance, a service may opt to advertise a “per call rate” of $1. While it seems straightforward enough, consider that clients are often charged for hang ups and wrong numbers, which can add up. It is also difficult for many answering services to provide quality service using per call billing methods, so it isn’t uncommon for their service levels to suffer, which reflects poorly on the businesses they answer for.
Per Unit Billing
Answering services that charge by the unit will sometimes lead you to believe that is their per call rate. So again, if a service advertises a rate of $1, it may sound good, but the bill actually piles up much more quickly than you might think. A “unit” can often be a call, a message delivered, a call transferred, or any number of other integral items to the call handling process. With per unit billing, don’t expect to be charged only for inbound calls!
There are good reasons why per minute billing has emerged as the answering service industry standard. It tends to work out best for the service provider AND their clients.
Additional Costs to Consider
So you’ve done your research, know your plan options, are familiar with the rates, and you’re ready to pick an answering service provider. But hold on. There are other ways that answering services charge clients that you should be aware of and consider in the overall cost. Here are several of the additional costs you should be aware of:
- Contracts – While some companies operate on a flexible month-to-month basis, others lock their clients into unforgiving contracts that can last up to multiple years. This rigid system may offer affordable pricing upfront, but the long term costs associated with the contract can be steep as they often include massive penalties for terminating the contract before the completed term. If you’re looking for an answering service, keep an eye out for those that earn your business each month. It ensures they are consistently providing great service and gives you the flexibility to make business decisions as needed.
- Set-up or account activation fees – Most answering services will charge an account set-up fee at the very start of the partnership. Expect this fee to be in the $50 – $100 range. It takes time for providers to script and program your account and this is their way of compensating for that effort.
- Billing cycles – Most folks are used to paying bills on a monthly basis. Some answering services opt for a 28-day billing cycle instead, allowing them to sneak in an extra invoice each year. Ask prospective providers about their billing cycle and make sure they operate on true monthly billing so you can avoid that crafty bonus bill.
- Hidden fees – Answering services hoping to nickel and dime their customers may feature deceptive pricing structures. Their base rate looks appealing, but they shoehorn in other ways to charge customers for lots of different things. Some round up to the nearest minute, charging more for time not actually worked. Others charge clients every time a call is transferred or each time a message is delivered. Sometimes there is a fee for call reports or access to your account online. There are also costs some will impose for any associated voicemail or IVR usage. Be sure you know everything you will be charged for, because additional answering service fees like these can add up in a hurry.
These are a handful of the ways that additional costs can convolute answering service rates. Be aware of what you are signing up for. A good answering service will be upfront about supplementary charges and work with you to match you with a plan that fits your budget.
The Perils of Low Prices – What you should know about the cheapest answering service
When you’re on a budget, it can be tempting to opt for the cheapest answering service plan available. While you may save money up front by selecting the most affordable rates, you ultimately get what you pay for.
Providers that offer the cheapest prices on the market can only compete on just that – price. Their service levels suffer, because they aren’t paid enough by their clients to staff appropriately, hire the best candidates, or train them thoroughly. The services you receive at rock bottom rates are often reflective of the kinds of inexperienced and unprofessional receptionists employed by the answering service. You wouldn’t hire these kinds of employees to work in your office, so it’s probably not a good idea to have them representing your company over the phone, either.
Incoming callers should be answered quickly, given the full attention of the representative, and handled with patience and respect. Cheap answering services often put their callers on hold for extended periods and offer poor service. These low-price answering service will risk the reputation of your business providing a poor customer service experience and ultimately do more harm than good to your brand. The long-term risks associated with using a cheap answering service is more trouble than it is worth.
Invest in a quality answering service to ensure that your company’s values are carried out with fidelity and that your brand reputation is enhanced rather than torn apart. While initially the answering service prices of a good answering service may cause pause for budget-conscious businesses, the value of a high-quality answering service partner should not be undervalued. Professional answering services offer more cost-effective solutions that provide more value in the long run. While more pricey than cheap competitors at first glance, the best answering services typically result in happier customers who return to your business time and time again.
Does an answering service cost more than a receptionist?
Organizations who are researching the cost of an answering service understand that they require additional administrative support. So it’s natural that they would wonder if an answering service costs more than hiring on-site staff. The short answer is that it costs far less to use an answering service than it does to hire an employee.
Consider the costs associated with hiring an in-house receptionist. The average receptionist earns a salary of about $30,000/year. In addition to a fair wage, you’d need to provide office space, a desk, chair, computer, and telephone to ensure they can do their job as intended. Health insurance, sick leave and vacation days round out an expensive position to fill. It’s also worth considering the costs of posting the job, interviewing, hiring, and training. And you’ll have to do all that over again when the receptionist leaves your organization. An answering service does not quit on you.
It’s also worth keeping in mind that a receptionist requires breaks throughout the day and leaves at 5pm. Your answering service does not take breaks and is available 24/7. That around-the-clock availability only adds value as you can be sure they callers are receiving stellar support no matter when they dial. Considering you can use an answering service for as little as about $35/month, it is a small fraction of the cost when compared to hiring an internal employee.
Already have a receptionist you don’t want to replace? An affordable answering service can both coexist and complement your existing administrative staff members. Have calls roll over to your answering service during busy times when your receptionist is on another call or occupied with other tasks. Then, forward your phones and get after hours support from your answering service once your staff goes home for the day/weekend/holiday. Many businesses find that a combination of both a receptionist and a live answering service is what best fits their requirements.
The MAP Communications Difference
With dozens of options out there, we know that businesses have their pick of the litter when it comes to answering services. We encourage everyone shopping for an answering service to do their research, price shop, compare options, and assess the true cost of answering services from each provider under consideration. It is our hope that this article and its information are helpful in the journey to choosing the best answering service.
We’re confident that we offer the highest quality live answering service at the best value for your dollar. It is our belief that our competitive answering service prices and fully customized plans should be considered in your search for the right partner. Our affordable answering service rates were created with every budget in mind. We understand that businesses operate in the most economical manner possible. That’s why we offer answering service solutions that act as an extension of your company and can actually save you money while helping to build your company.
We’re so confident in our value that we’re offering a completely free trial of our live answering services. With no obligations, costs, risks or pressure, there’s no reason not to give us a try and see what the MAP Communications difference is all about. Learn more about our answering service prices, customized solutions, and free trial by contacting us today!