Are professional telephone answering services worth it?
Whether you’re a business owner, professional, or solo entrepreneur, an answering service could give your business major ROIs.
Companies or individuals that get a high volume of calls can outsource their call-handling responsibilities to answering service providers.
If you’re new to getting answering services, read this guide to help you find the most suitable solutions provider for you:
Answering service: Short definition
A professional answering service is where trained representatives handle incoming phone calls for you, their client. Aside from answering calls, a telephone answering service provider can also transfer calls, take messages, schedule appointments, answer customer queries, and qualify leads.
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Other providers also offer virtual office services and virtual receptionist services.
What’s the goal of answering service solutions?
It’s to ensure all calls are answered promptly and professionally, regardless of the time or the company’s availability.
Insider tip: Hiring the best answering service companies
Make sure they offer customizable scripts, provide virtual office services, and have proven experience in your field. This ensures the answering service feels like a seamless extension of your business, giving any caller a professional, consistent experience.
Additionally, make sure they offer detailed call analytics, as this can be invaluable for improving your customer service and finding hidden sales opportunities.
What should you consider when hiring answering services?
It isn’t easy to find the right professional answering service, despite many companies offering similar services. You need to make sure you’re well aligned and you aren’t being short-changed. Consider these factors when hiring a service provider:
1. Experience in your industry
Choose a service with experience in your industry. They should be able to understand your field’s market, nuances, and customer needs. This ensures they can be a reliable representative of your business.
2. 24/7 availability
If you require after-hours coverage, choose a provider that offers round-the-clock service. This is crucial for maintaining consistent customer service, especially if your call volume is starting to grow.
3. Service customization
Look for a telephone answering service provider that lets you tweak call scripts and handling procedures. This reassures they can match your brand’s voice and tone when facing potential and existing customers.
4. Tech and integration
Find a professional answering service provider that uses up-to-date technology and can integrate it into your CRM, interactive voice response (IVR), or other business tools. With a tech-savvy provider, you can ensure your processes and collaboration experience will be seamless.
5. Security and compliance
Check if the professional answering service adheres to data security standards. They should comply with your industry’s regulations, such as GDPR or HIPAA for healthcare. Through this, you can rest assured you’ll avoid future legal disputes.
7. Reputation and references
Do a quick Google search of the professional answering service provider’s reputation. Find out how they deal with complaints or disputes. By doing this background check, you can gauge if they’re a reliable or inconsistent service provider.
8. Cost structure
Understand if their pricing model fits your business and allocated budget. Some offer per-minute, per-call, or flat monthly fees. Ensure the cost aligns with your current and future budget needs.
Insider tip
Always request a free estimate, trial period, or a short-term contract before committing to a long-term agreement. This gives you a chance to assess their performance, responsiveness, and mastery in presenting your brand. In addition, don’t forget to make a few test phone calls yourself during the trial to evaluate their service’s consistency.
Pricing of answering services
Now that you know the considerations of hiring a professional answering service provider, it’s time to mull over the pricing of providers in the market today. Pricing can vary depending on their service’s complexity, call volume, and business needs. Here’s what you need to know:
1. Per-minute pricing
In this model, you’ll be charged based on the total time spent on customer calls.
This is ideal for businesses with varying call lengths, as you could only pay for the actual time used. This makes it cost-effective for low-volume or short calls answered.
For example, if you own a small legal practice, the professional answering service could charge you $1.20 per minute. If they handle 100 minutes of inbound calls in a month, your total cost would be $120.
As you can see, this model is not ideal if your calls can easily escalate at unexpected times.
2. Per-call pricing
In this pricing model, you’ll pay for a fixed fee per call, regardless of the length.
Say, if you run an eCommerce shop, a provider may charge $3.50 per call. If your calls reach 200 per month, you would need to pay $700.
This isn’t too commendable if your calls are short most of the time, as you may be paying more than necessary. On the other hand, if your calls are relatively consistent in volume and duration, this model suits you better.
3. Flat monthly rate
A fixed monthly fee covers a specified number of calls or minutes. For instance, you could pay $500 for calls that reach 300 or 500 minutes in a month. So, even if your provider handles 250 calls, which total 400 minutes, the cost will remain the same.
The main advantage of this pricing model is that it’s budget-friendly and predictable, helping you manage your expenses easier. It may not be cost-effective if you exceed the included minutes or calls, as overcharges may apply.
Say, if the service provider handles 350 calls (50 calls beyond the max limit) and the overage is $2.00 per call, you’d pay an extra $100 plus the $500 flat rate. The new total would be $600.
4. Hybrid models
This pricing model combines per-minute and per-call elements. It could also include a base fee with extra charges for other services.
If you prefer flexibility, this pricing structure might be right for you. That said, it could be harder to manage.
Additional costs you might pay for:
Setup fees – Some providers require payment for one-time setups such as creating your account or customizing scripts.
Overage charges – If you go beyond your maximum minutes of calls, you might pay for the exceeding minutes.
Extra services – Some services offer free appointment scheduling, call transfers, bilingual support, or CRM integrations. Other charge fees for them.
Holiday and after-hours – If you require support during holidays or outside business hours, the regular cost per call or minute usually doubles.
Insider tip for evaluating pricing models
When evaluating providers’ pricing models, consider your typical call volume and duration. You might find that a hybrid model offers the best balance between predictability and flexibility.
Meanwhile, a per-minute pricing structure could be more ideal if your calls are short most of the time. So, always ask the professional answering service provider to help you estimate your costs based on your actual or projected usage to avoid escalating expenses.
Return on investment (ROI) of answering services
You could potentially reap huge ROIs from hiring an answering service. Here are the most plausible ones:
1. Higher customer retention rates
Professional answering services ensure that every call is answered promptly and professionally. Satisfied customers are more likely to come back and buy from a service or shop again.
In fact, if the phone answering service helps retain just 10% more customers per year, then the increase in repeat customers could easily outweigh the cost of hiring the service.
2. Converting callers to paying customers
When a provider converts 5% more leads every month, and every new customer is worth $1,000 in revenue, then they clearly bring a great ROI. Say, if the phone answering service costs $500 but brings in an additional $5,000 in revenue, then you’re gaining a 900% ROI.
By capturing every lead, even after hours, you can increase your chances of converting more to paying customers. Take note: a missed call could be a missed sale.
3. More cost-effective than in-house staff
Hiring full-time receptionists or customer reps can be costlier — they require salaries, benefits, training, and overhead. On the other hand, a phone answering service can provide the same or better level of service at a fraction of the cost.
Say, an in-house receptionist costs you $2,500 per month in salary and benefits. An answering service, meanwhile, could only cost $700 per month. You could still save $1,800 — in a year, it would amount to up to $21,600.
4. Scalability and flexibility
As your business grows, a professional answering service can scale with you without the need for additional staff or infrastructure.
Instead of hiring more employees, you could scale the professional professional answering service at a lower cost. You can save time and money on recruiting, training, and managing more people.
5. Focus on core business competencies
By outsourcing your call handling, your internal team can focus more on core tasks like sales, product development, and customer experience.
If the answering service frees up 10 hours of your team’s working time each week, then that time can be reinvested in activities that drive revenue.
6. Polished professional image
A stronger brand image can lead to higher pricing power, better customer loyalty, and more referrals, contributing to increased sales that boost ROI.
An answering service could help with this. Through their on-brand call scripts, they can easily maintain a professional presence, regardless of who’s calling your lines.
Insider tip
To maximize the ROI of your live answering service, closely monitor your agreed key performance indicators (KPIs) such as customer satisfaction rates, call conversions, and lead captures. Regularly review reports from the provider to ensure they’re meeting your expectations and working to contribute positively to your business.
Would you need 24/7 answering services?
Whether 24/7 support is necessary for your company depends on several things, such as your industry, market, customer expectations, and the nature of your business. Here’s a breakdown to help you gauge if you could benefit from a 24/7 live answering service.
1. Global customer base
If you have customers in different timezones, getting an after hours answering service ensures they can reach you during their local business hours. This is especially important for eCommerce, tech support, and SaaS businesses.
A company’s 24/7 availability couldn’t be underestimated. In fact, this study has found that chatbots providing 24/7 support significantly influence loyalty in your customers.
It discusses that modern customers expect to access customer service at all times. The availability and quality of those services directly correlate with their increased customer satisfaction and loyalty.
2. Critical services
Industries such as healthcare, emergency services, IT support, and utilities require round-the-clock availability to handle urgent issues or emergencies. A 24/7 answering service ensures all calls are answered, even in emergencies or downtimes.
Research into the business operations of a 24-hour help desk at the University of Pittsburgh emphasized the importance of the round-the-clock availability of IT support, particularly in sectors like education and healthcare, where urgent problems can occur at any time.
3. High customer expectations
Sectors such as travel, hospitality, or financial services typically have customers who require immediate assistance at all times. Having a 24/7 answering service could help a business stand out and enhance customer satisfaction rates.
A case study on Banglalink found that providing 24/7 call center services via digital platforms, in industries where customer expectations are high, significantly increases satisfaction and engagement.
4. Growing competition
If your competitors are offering 24/7 support, not doing so could not be ideal for your business. In highly competitive markets, having round-the-clock availability could make key differences in sales growth and customer retention.
When is a 24/7 answering service unnecessary?
You wouldn’t need a 24/7 answering service if you:
…are in a local market.
If you operate in a local market with standard business hours, or your customers don’t require after-hours assistance, then getting a 24/7 answering service would be too over-the-top for you.
…offer low-urgency services.
If your service or product doesn’t require immediate attention (Ex. Consulting firms or B2B services that have long sales cycles.
…don’t have the budget for it. Yet.
24/7 services can be costly, even if some answering service providers offer discounts. If the additional expense outweighs the potential benefits, focusing on providing exceptional support within your business hours might be better.
…have customers that prefer to interact in other ways.
Consider how your customers prefer to communicate. Some customers are not content with talking on the phone. If there’s little demand for phone or chat services, then getting a 24/7 answering service may not add any value to your business.
Still unsure about getting 24/7 call center services? Do this instead:
Consider starting with extended hours (ex., Early morning or late evening) and monitoring customer demand. You can also survey your customers to gauge their preferences and expectations. If there’s a clear need, transitioning to 24/7 call center services could be a good strategic move.
That said, if full 24/7 coverage isn’t feasible, consider offering an after-hours emergency line or self-service options like online FAQs to cover basic inquiries outside of business hours.
Answering services for different industries
Do you have an idea of whether an answering service could work for your business? Here’s an insider look into how answering services work in these industries:
Medical or healthcare
In the healthcare industry, answering services can also cover appointment scheduling, patient inquiries, and emergency calls. Providers and operators must be trained under HIPAA regulations so that healthcare providers can rest assured that their patients’ sensitive data are secured and well-protected.
Example scenario:
A medical clinic could use an answering service to manage after-call inquiries. They can also schedule appointments for the patient and provide essential information about the clinic’s services. They can also escalate urgent calls to on-call medical staff.
Property management
In real estate or property management, answering services can take care of the renters’ inquiries, maintenance requests, and emergencies. They can also act as a point of contact for prospective renters and assist with rental inquiries.
Example scenario:
A property manager could hire an answering service to handle maintenance requests 24/7. If a renter calls about a plumbing issue late at night, the service contacts the appropriate maintenance personnel and provides updates to both the renter and property manager.
Legal practice
For legal practitioners, answering service providers can manage client inquiries, schedule consultations, and provide basic details about legal services. Confidentiality and professionalism are paramount, given the sensitive nature of legal matters.
Example scenario:
A law firm employs an answering service to handle calls from potential clients. The service screens calls based on the type of legal assistance required and schedules appointments with the right legal practitioner. Meanwhile, urgent legal matters will be flagged for immediate attention.
Small to medium businesses
In small to medium business, answering services can function as a virtual receptionist, handling a variety of tasks including customer service, order processing, and lead generation. This helps small businesses maintain a professional image and ensures no calls are missed, even during busy periods or after hours.
Example scenario
A small e-commerce shop can use an answering service to manage its customer queries and orders after regular business hours. The professional service providers can also take orders over the phone or chat, answer product-related questions, and give updates on shipping statuses.
