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August 4, 2023

How Much Does an Answering Service Cost?

A laptop with graphs representing the question: How much does an answering service cost

Running your business efficiently is one of your top priorities as a business owner in today’s economy. You want to provide professional, quality service to your customers. But if you are not ready to answer calls, you will lose customers to your competitors.

An answering service can solve this problem. An answering service ensures a live person answers every call 24/7. You don’t have to worry about hiring and managing a full-time in-house receptionist. An answering service can also help your business in many ways, such as improving customer service, staff productivity, and profitability.

But what is the cost of an answering service? How can you fit it into your budget? This article will explain everything you need to know about the cost of an answering service, including pricing models, cost-effectiveness, and the factors that affect the cost. 

Read on to learn more.

Key Factors that Influence the Cost of an Answering Service

The following are factors that influence the cost of an answering service.

Service Level Options

When you hire an answering service for your business, you will want more than just a live person answering calls. 

You need a professional who can positively represent your brand, help callers solve their issues, and provide a great customer experience, necessitating various services, such as appointment scheduling, customized greetings, and bilingual support. 

Naturally, answering services with more service level options are likely to cost more.

Call Volume and Call Duration

Call volume and duration are two crucial factors that can significantly influence the cost of an answering service. If your business receives high call volumes, you will be required to pay more than one with low call volumes. 

The answering service may also charge more if your business receives calls with longer durations, as it will require more resources and agent time.

Additional Features and Customization Requirements

Additional features like message taking and call forwarding can increase the cost of an answering service. 

If your business needs custom integrations, unique message delivery methods, and specialized call scripts, the answering service must invest more resources and time in developing and implementing these features. Additional features and customization requirements can be factored into the service’s pricing.

24/7 Availability and After-Hours Support

Having 24/7 Availability and After-Hours Support are offered by answering services to cater to businesses that need continuous coverage. However, to provide round-the-clock support, answering service providers require additional resources and staffing, which can affect the cost of the answering service.

Integration with Existing Systems and Software

Integrating an answering service with your business’s existing systems may involve custom development work and configuration to ensure smooth data exchange and workflow. The initial setup requires time and technical expertise from the service provider’s team, resulting in higher costs.

Pricing Models of Answering Services

The following are the common pricing models used by answering service providers.

Per-Minute Pricing

Per-minute pricing is a billing model where you are charged based on the total number of minutes agents spend handling incoming calls. With this model, you pay only for what you use. Each time an answering service agent takes a call, the duration of that call is tracked, and the accumulated minutes across all calls during a billing period are used to calculate the cost.

The answering service provider sets a specific rate per minute. The rate can be fixed or vary depending on call volume or the number of minutes used during the billing cycle. The model usually covers a specific billing cycle, which can be weekly, monthly, or customized based on your needs. 

At the end of the billing cycle, the total accumulated minutes are multiplied by the per-minute rate to calculate the final charges.

The model offers a transparent and flexible billing approach, especially for businesses with seasonal fluctuations or varying call volumes. You can expect lower costs during slower periods, as the reduced call volume will result in lower billing amounts.

Flat-Rate Pricing

A flat-rate pricing model is a billing approach where the answering service provider charges a fixed, predetermined fee for a specific set of services, regardless of the call duration, call volume, or other factors. The model offers a predictable and stable monthly cost.

With this pricing model, there is no need to track call minutes or worry about overage charges. The model often includes unlimited call volume, meaning you can receive unlimited incoming calls without incurring additional costs.

Since you will be paying a fixed amount with the flat-rate pricing model, you can expect consistent service quality regardless of call volume or duration. The answering service provider is incentivized to maintain a high-performance level to deliver value for the flat monthly fee. 

Most flat-rate pricing plans also operate on a month-to-month basis, allowing you to cancel or adjust the service as needed without being tied to long-term contracts.

Tiered Pricing Based on Call Volume

In this model, answering service providers offer different pricing tiers or packages to businesses based on their expected call volume. 

Every package or tier has a specific set of features and usage allowances. You can choose the tier that best aligns with your call volume requirements. As the call volume changes, you can move between tiers to ensure you have the appropriate level of service without overpaying for unused minutes or calls.

The tiered pricing model offers you more predictable costs. You can estimate your monthly expenses more accurately since you know your call volume and the cost per call or minute for your chosen tier. This model also allows you to adjust your service level as your call volume fluctuates.

When considering this model, you will want to evaluate several factors, such as scalability, cost per call/minute, overage charges, contract terms, current/projected call volume, and customization.

What’s The Average Costs of Answering Services?

The cost of an answering service can vary widely based on several factors, such as the complexity of call handling requirements, the service level chosen, the provider’s pricing structure, and the business’s specific needs.

The following is the general breakdown of the average costs of answering services based on industry and service level.

Small Businesses and Startups / E-Commerce and Retail Businesses

Small businesses and startups with low to moderate call volume and basic call handling needs can expect to pay an affordable monthly fee for a basic service level, including call answering, call forwarding, and message taking. The average cost can range from $100 to $300 per month.

E-commerce and retail businesses with moderate call volume and basic call handling requirements can expect a slightly higher cost because of the nature of customer inquiries and order processing. The average cost ranges from $150 to $400 per month. You can expect to pay more if you require after-hours support for order placement, customer inquiries, and urgent issues.

Medical and Healthcare Practices

The average cost of answering services for medical and healthcare practices can vary based on the practice’s specific needs, call volume, service level required, and any specialized industry support. 

Practices requiring appointment scheduling and HIPAA-compliant call handling may incur higher costs because of compliance requirements, specialized training, and security measures. On average, you can expect to pay $200 to $500+ per month.

Legal and Professional Services

Legal and professional service firms may require dedicated support, message screening, and accurate call logging. This may lead to higher costs due to the specific demands of the legal industry. Your legal firm may also require HIPAA-compliant services for handling sensitive legal information.

  • Small legal firms with basic call handling needs and low to moderate call volumes expect to pay an average monthly fee ($250 to $600) for a basic service level, including call answering, call forwarding, and message taking. 
  • Larger law firms with complex call handling needs and high call volumes may require a more scalable and customizable answering service, leading to higher monthly costs ($600 to $1,500+).

Property Management and Real Estate

Property management and real estate agencies can benefit from after-hours support to handle urgent inquiries and capture leads, leading to slightly higher costs for extended availability. Businesses serving a diverse customer base may require bilingual support for handling calls in multiple languages, leading to higher costs due to specialized language capabilities.

Depending on the business size, call volume, and service level required, you can expect to pay between $150 and $1000+ for a property management and real estate answering service.

Service-Based Businesses

The average cost of an answering service for service-based businesses, such as HVAC and plumbing, can vary based on factors like call volume, service level required, and additional features. These businesses often need prompt responses to customer inquiries, dispatching technicians, and appointment scheduling.

Depending on the service level you require, you can expect to pay between $150 and $800+ per month.

Evaluating the Cost-Effectiveness

The following are key aspects of the value proposition of an answering service.

Time and Resource Saving

By outsourcing call handling to an answering service, you can free up your staff’s time to focus on core tasks and key responsibilities. An answering service also helps you save on resources for hiring a full-time in-house receptionist.

Improved Customer Service and Satisfaction

Answering services ensure that calls are promptly answered, inquiries are handled professionally, and messages are accurately taken, enhancing the overall customer service experience and increasing customer satisfaction.

Enhanced Business Reputation and Professionalism

An answering service portrays a professional image of your business, enhancing its reputation. It makes your business appear larger and more established, even for small businesses and startups.

Conclusion: Answering Services Are Worth The Cost

A professional answering service boosts your business’s reputation and success by offering 24/7 availability and customer satisfaction. You need a reliable and reputable answering service, not the cheapest one. 

Choose a cost-effective solution that suits your needs and get a quote from Always Answer. We are ready to answer any questions you have. Contact us today.

Avoid Costly Mistakes When Hiring An Answering Service!

Don’t let your business suffer due to common misconceptions. Make informed decisions for your business by downloading our FREE guide: “3 Mistakes Companies Make When Hiring an Answering Service…and How to Avoid Them!”