Choosing a telephone answering service is an important decision for a business with a high volume of calls. You want to get it right. 

Since the team handles direct communication with your customers, they must be professional, empathetic, and have a good knowledge of how your business works. 

In this detailed guide, we’ve looked at several factors you should consider before hiring an answering service provider, plus the benefits of working with the right team. 

What is an Answering Service?

An answering service is an organization that handles telephone calls for other companies. Traditionally, an answering service has been staffed by live agents, but there are an increasing array of automated solutions that also fulfill the answering service function and help process telephone calls. 

The most basic form of an answering service is the human or AI voice that prompts callers to leave messages after a beep. However, this isn’t where it ends. With industry innovations, professional answering services handle and transfer calls, take messages, call customers, respond to text messages and chats, handle appointment scheduling, integrate with software applications in the cloud, and more. 

A Brief History of Answering Services

Over the past 100 years, the answering service industry has evolved from switchboard-based operations taking messages on paper for doctors to technologically advanced contact centers. 

So what does it look like at a traditional answering service? 

Picture this: A handful of people in a room, handling everyone’s phones—this is the origin of answering services. In the beginning, answering services were “centralized message centers” within organizations. They helped organizations process large volumes of calls or take calls after business hours.  

These message centers had a “call director” that took care of calls for busy phone lines. The operator would know each caller needed attention because of the flashing light next to their line. They also had separate files for recording callers’ messages. 

In 1957, Time Inc. set up the first formal call center. Private Manual Branch Exchanges (PMBXs) were invented in the 1960s and manually connected callers via giant switchboards. By the 90s, answering services had become widespread and played a significant role in customer support teams. 

These days, businesses remain reliant on live operators to provide a personal touch and handle the sorts of inbound and outbound communications that machines can’t manage. However, as investments in automated solutions and IVR systems continue to increase, the most common configuration is to have human operators working hand-in-hand with technology to deliver a superior customer experience.

Benefits of a Call Answering Service

How important is a call answering service for modern businesses? To answer this question, let’s look at some numbers. According to Microsoft, consumers keep raising their expectations in terms of customer service, with 54% saying they have higher expectations than they did just one year ago. And data shows that 43% of Americans contacted customer service by voice in 2020. 

This data shows that any business looking to keep existing customers and attract new clients should invest in solutions that ensure every phone call is a successful transaction. Let’s look at some other outstanding benefits of an answering system. 

Maintain a Professional Brand Image and Reputation

Poor communication impedes the reputation of any business. No matter how great your product is, customers can be discouraged if they cannot reach you on their timetable. 8 out of 10 clients wouldn’t call you back after the first try. 

Choosing a reliable call answering service can help you bridge communication gaps and maintain a professional brand image in your industry. 

Better Customer Experience with Reduced Wait Times

A telephone answering service helps companies provide quicker response times to clients, which creates better customer experiences. However, in many cases — such as a tenant in need of maintenance services after office hours — customers still prefer to make a business call to resolve an issue versus sending an email or paying a physical visit to the office. 

Improve Lead Capturing for Your Business

Let’s say your business services pique someone’s interest. The prospective client decides to place a phone call but receives no response. Chances are they wouldn’t call back again, and you’ve lost the opportunity of making them a paying customer. 

There is a better way to take advance of inbound calls.  

Typically, professional answering services sync with your customer relationship management software or existing cloud applications. A reliable telephone answering service can handle the call and instantly update the details in your lead tracking system.   

Saves Time and Improves Efficiency

Instead of spending time on manual data collection, a call answering service can help you create detailed reports on the number of calls, total call duration, details of every phone call, and average call duration spanning over a fixed time for your business.

3 Most Common Types of Answering Services

Answering service rep at computer

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As stated earlier, answering services often go beyond routine call handling. For example, an internet service provider might invest in an automated answering system while an MSP company opts for a live agent to staff their help desk hotline after hours. 

The specific needs of your business should guide your search. In this section, we will look at the most common types of answering services.

Live Answering Service

As the name suggests, a live answering service provides 24/7 virtual receptionist support for your organization. Their team of live agents handles all your telephone calls in real-time. This service is customized to suit the unique needs of your business.

Call Centers

Call centers also have live agents who take care of inbound and outbound calls. Whereas answering services provider a more fundamental level of call taking, call centers often provide involved business process outsourcing support or advanced solutions that integrate closely with their client’s business operations. For example, think of a technical support department responsible for helping callers troubleshoot their internet service or resolve account issues.

Auto-Attendants, IVR, and Other Automated Solutions

An interactive voice response system is an automated system that allows callers to interact with a computer using their keypad. These systems can route calls, deliver information, record messages, and perform other tasks. 

Here, customers first interact with the AI assistant through a series of prompts and only speak to a live operator if necessary. Many banks and telecommunication providers use IVRs.

An automated attendant is another automated solution that can answer calls and route callers to the correct phone number or extension.

What to Consider When Choosing a Call Answering Service

Ideas and Considerations

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With so many call answering services, it’s challenging to make the right choice. To help you, ask yourself these questions: 

  1. Should I handle calls in-house or outsource? 
  2. Does my business require live operators?
  3. What is my budget for the service?
  4. Do I trust this service to represent my business? 
  5. What is their availability? 
  6. Does this business work with clients in my industry? 
  7. What are their capabilities? 

Should You Handle Calls In-house or Outsource?

Before hiring a call answering service, you need to decide whether outsourcing such an essential part of your organization is the right thing to do. It would be best if you weighed the pros and cons of each option. 

For example, if your in-house support team is overworked and cannot meet your call volume, get outside help. Also, a business in the early stages might need expert help for customer support, so a professional answering service comes in handy here. 

However, if your business receives few calls, investing in an answering service might be unnecessary unless you’re making a ton of outbound calls.  

Does Your Business Require Live Operators?

As noted earlier, businesses can invest in both live agents or automated solutions. However, many organizations — such as healthcare providers and law firms — still require full-time agents available 24/7

For example, an online data collection platform has little reason to hire a highly personalized live answering service. But a property management business needs this personalized support system because maintenance emergencies can arise at any time and require a prompt response.  

So, consider your company’s needs, business focus, and industry before investing in live receptionists or support agents. 

What is Your Budget for the Service?

Your budget is an important deciding factor for any business investment. So, as you vet different answering services, please pay attention to their pricing model and packages. Some services offer a flat rate, but most providers bill based on your usage. You will need to estimate your costs based on call volume. Depending on your budget, more robust solutions may offer more support, while automated solutions can help limit costs. 

Do you Trust the Service to Represent Your Business?

When hired, the answering service would have one-on-one conversations with your customers and potential clients. Therefore, any missteps could negatively impact your business. Most of your customers will never know you outsourced communication to a third party. 

Therefore, you should only work with a company that understands customer service and aligns with your company’s values and way of doing business. Choose an experienced service provider that treats your business communication with the highest level of professionalism. 

What is their Availability?

The answering service should be available whenever you need them. For example, if you run an emergency service like a 24-hour emergency plumbing company, then your hotlines need to be available 24/7, even during the holidays.  

Another thing to note is that covering more hours doesn’t mean the service should cost more. You can often maintain 24-hour availability while only paying for the time that agents spend handling calls on your behalf. If you do your due diligence, you will find a service that fits your budget and provides for the exact needs of your business. 

Have They Worked With Clients in the Same Industry as Yours?

As a business owner, it is easier to choose an answering service that understands the demands of your industry. Industry expertise shortens the learning curve and reduces any friction at the beginning of the working relationship. They will also better understand the intricacies of your operation and the expectations of customers and other stakeholders. 

Be sure to look through the company’s client profile and ask questions about their past projects and how much experience they have in your field.  

What are their Capabilities?

It is crucial to understand the capabilities of your answering service. For example, do they only offer the basics, or can they provide more complex innovative solutions? 

A basic answering service may only be able to answer calls and take messages. On the other hand, an advanced answering service may integrate with your software applications or even provide 100% customized solutions that deliver additional value.

How Much Does An Answering Service Cost?


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The pricing models for answering services can vary, but we will break down the most common scenarios. 

On average, a phone answering service costs $1.12 per minute or $1.75 per call. You generally spend less per minute the more minutes you utilize. 

How do answering services typically charge?

Most answering service providers bill by the minute, per call, or unit: 

  1. Per Minute Billing: This is the most popular type of billing for answering services. Here, call agents are paid based on how many minutes they spend on the phone with callers. 
  2. Per Call Billing: Pay-per-call billing means the service provider charges you for the number of calls they receive for your organization. It doesn’t matter how much time they spend on each call; you will pay a flat rate. 
  3. Per Unit Billing: Per unit billing covers different communication assets, including emails, chats, call transfers, and inbound calls. 

What is the average price of an answering service?

Here’s a breakdown of how much you may spend on an answering service: 

  1. Average cost per minute for plans that include 100 minutes or less: $1.33
  2. Average cost per minute for plans that include 101-499 minutes: $1.13
  3. Average cost per minute for plans that include 500-1000 minutes: $1.00
  4. Average cost per minute for plans that include over 1000 minutes: $0.87

Additional Costs to Consider

Beyond the pricing system we’ve mentioned, some other factors come to play. For example, some companies prefer project-based pricing and long-term contracts. 

Let’s go over some of these additional costs: 

  1. Contracts: Some answering service companies prefer long-term agreements with their clients with affordable upfront pricing. Several legal complications can arise from this, so be sure you understand the terms of the agreement before choosing the option. 
  2. Activation Fees: Typically, answering services require a $50–$100 set-up or account activation fee. 
  3. Holiday Fees: If the company provides 24/7 answering services, they may ask you to pay a holiday charge. Expect this to be in the $5–$10 range. 
  4. Hidden fees: Watch out for any hidden fees like IVR usage costs and prices for call transfers. 


The right answering service can boost your company’s returns substantially. With your business communication in safe hands, you can focus your energy on other tasks like developing and executing high-level strategies to scale your operations. 

At CMS, we offer advanced contact center solutions for businesses worldwide. Our packages go well beyond standard answering services and include call center integrations, automation, auto-attendant responses, IVR systems, and other advanced features

Contact us to learn more about our plans and pricing.

By Last Updated: February 27, 2024Categories: Blog11.1 min read