If you run a business, chances are you’ve experienced the frustration of missing important phone calls—the kind that can make or break a sale or leave a customer feeling unimportant. It’s not just you. Studies show that 62 percent of calls to businesses go unanswered. That’s a lot of missed opportunities.

But there is a solution: telephone answering services. With these services, you can ensure a live person answers every call, and you don’t have to worry about hiring and managing a full-time receptionist. The question begs: How much does an answering service cost? Is there such a thing as a low-cost answering service? Can your business fit answering service costs into its budget?

In this article, we’ll find out, exploring answering service pricing and the benefits it can provide for your business. Whether you’re a medical office, a salon, or any other type of operation, there’s an answering service that can help you save customer conversations, book more appointments, and generate more revenue. Let’s get started.

The Average Cost of Answering Services

The price of live answering services can vary widely depending on the provider and the features included. On average, prices range from $50 to $149 monthly, with additional fees charged per minute or call. Cost per minute can range from $0.93 to $3.09, with some providers offering unlimited usage without per-message or per-user fees. Generally, the higher number of minutes you choose in your package, the lower the cost per minute. Think of it like bulk buying.

How to Calculate the Cost of Answering Services for Your Business

No two businesses are alike, and the true price of your answering service will depend on factors specific to your operations and customer service systems. To help you get a better idea of the actual cost of answering services, we’ve put together this step-by-step guide:

Step 1: Determine Your Call Volume

First, you need to determine how many calls you receive each month. You can find this information in your call logs or phone bills. If you use a business phone system that tracks call analytics, you can also use that data. Make sure to track both answered and unanswered calls.

If you don’t have this data readily available, you can estimate your call volume based on the size of your business, the number of employees, and the industry you operate in. For example, if you’re a small retail store, you can estimate that you receive around 20-30 calls per day.

Step 2: Calculate Your Average Call Duration

The next step is to determine the average duration of your calls. Again, look closely at your call logs, phone bills, or phone system analytics. Calculate the total talk time (in minutes) for all calls in a month and divide it by the total number of calls. This calculation will give you the average call duration. Put simply, the calculation looks like this:

Total talk time / number of calls = average call duration

For example, if your business receives 100 calls per month with a total talk time of 300 minutes, your average call duration is 3 minutes.

Step 3: Choose Your Plan

Different answering services are packaged using different plans and pricing models—choose the one that best fits your needs and budget. Most answering services offer per-minute pricing plans or packages with a set number of monthly minutes. Consider your call volume and average call duration when choosing a plan.

Step 4: Get a Quote

With the call volume and average call duration determined, you can now ask for a quote from your chosen answering service provider. Some providers may have online calculators that can give you an estimate based on your call volume and plan selection.

You can give the provider your call logs or phone bills for a more accurate quote. They can then analyze the data to provide a customized price estimate.

Step 5: Additional Costs to Consider

In addition to the base answering service cost, there are several potential additional costs that businesses should be aware of when selecting an answering service. Here are some of the most common ones to keep in mind:

  • Call Patching/Live Transfer: Some answering services offer call patching or live transfer, which allows callers to be connected directly to your staff. Once the connection is made, the client utilizes the provider’s inbound line to host the call, so the remainder of the call—from the initial connection until disconnect—is charged as Call Patching time.
  • Custom Call Scripting: Some answering services offer custom call scripting, which gives you control over what operators say to callers and how they say it, ensuring their approach aligns with your values and brand identity.
  • Custom Development: Some answering services offer custom development services if you require advanced programming and system integration work. This may include database integration, SFTP, API, form-fill, auto-submissions, and any other custom functions unique to your business. This feature is typically priced on a case-by-case basis.
  • Online On-Call Schedule: If your business requires scheduling on-call personnel, some answering services offer an online scheduling system. This system can be accessed through a secure web login and allows you to schedule on-call personnel up to a year in advance. Any updated schedule changes are automatically reflected.
  • Online Reporting: To keep track of call logs, messages taken, and other important data, some answering services offer an online reporting system. You can view call recordings, daily/weekly/monthly time statistics, and more.
  • Pre-recorded Message: If you want to create a custom automated message or greeting that plays for every caller before they reach an agent, some answering services offer pre-recorded message services. The recording length counts towards your monthly minutes, so this feature may require an additional fee.

In addition, some providers may offer discounts for annual contracts or bundling services. Consider these options to save money in the long run.

How Much Does an In-House Receptionist or Customer Service Rep Cost

Once you’ve calculated how much an answering service costs, comparing that figure to the expense of hiring an in-house receptionist or customer service representative can be a helpful exercise. By working through the calculations, you can make an informed decision.

Here’s how to work out the approximate cost of an in-house employee:

  1. Determine the number of hours per day that you want your receptionist to be available to answer calls. For example, if you want your receptionist to be available for eight hours a day, that’s 40 hours a week (assuming a five-day workweek).
  2. Decide on an hourly rate for your receptionist. This will depend on your location, industry, and the level of experience you’re looking for. The median hourly rate for a receptionist is $14.40.
  3. Multiply the number of hours per week by the hourly rate to calculate the weekly cost of having a receptionist.
  4. Consider additional costs, such as benefits, payroll taxes, and equipment. You might estimate an additional 25 percent for benefits and taxes. Depending on your business, you may also need to factor in after-hours costs. If you operate outside of regular business hours, you’ll need to pay additional wages or offer higher rates to an employee willing to work those hours. This can add up quickly and significantly increase your overall labor costs.
  5. Multiply the weekly cost by the number of weeks in a year (52) to get the annual price. The median annual wage for a receptionist is $29,950 but can be as high as $45,000-plus, depending on your location and industry.

Costs and Benefits Compared

So, how do answering services and in-house support stack up? Here’s a simple comparison:

In-House Employee Live Answering Service
Labor Costs Pay hourly wage + Benefits Pay per minute/call or monthly subscription
Availability Restricted by working hours 24/7 availability
Training Onboarding and ongoing training required Training covered by service provider
Call Volume Limited to answering one call at a time Can handle multiple calls simultaneously
After Hours Costs May require overtime pay or additional staffing Included in monthly subscription or charged per call
Equipment and Office Costs Additional costs for office space, equipment, and supplies No additional equipment or office space needed

Maximize Your Business Potential with a Live Answering Service

Answering services can be an excellent investment for businesses of all sizes, helping to manage call overflow, prevent missed calls and lost revenue, and free up time for more productive tasks.

At CMS, we pride ourselves on providing top-notch service at an affordable price. Our base pricing includes access to premium features like custom call scripting, online reporting, and online on-call scheduling, ensuring that you get the most value for your investment.

Request a custom quote or get in touch today, and let’s discuss your business’s needs.

By Last Updated: April 25, 2023Categories: Blog7.2 min read