Shopping for an Answering Service: Why Prices Vary So Much
Shopping around for a live answering service can be a daunting task. There are so many things to consider, and business owners don’t want to just settle for the first answering service they find. Then there is the cost issue. Not only do you not want to pay too much, but prices between services can vary significantly.
Price variation exists in every industry. If it is not an answering service you are looking at, it could be a landscaping company or a cleaning service. You cannot escape price variation. However, it’s fair to say that there is more variation in our industry than some others. There are valid reasons for this. None of them have to do with answering services trying to rob customers blind.
Historical Best Practices
One of the most pervasive aspects of pricing an answering service is the historical best practices our industry has followed for decades. Answering services have been around for a long, long time. Some companies in our industry are just stuck in their old ways. They still bill the way they did back in the 1990s.
In that sense our industry is a lot like healthcare. Evolution can be slow and tedious. Fortunately, service providers that have kept up with the times usually offer the most streamlined and efficient pricing structures.
Individual Business Models
Business models have a significant impact on pricing. For example, a lot of live answering services bill every four weeks. Do the math and you will discover that a four-week billing cycle results in 13 bills annually. Other companies, like Apello, bill monthly. That means 12 bills per year.
Another example is rounding. There are answering services that round up to the nearest minute. So if a call takes a minute and a half, the company might round up to two minutes for billing purposes. There are answering services that don’t round up at all.
Answering incoming calls forms the basis of what live answering services do. The most bare bones providers only answer and take basic information. Their prices tend to be the cheapest. But answering services can offer additional options including transferring calls, holding them, sending messages via text or email, generating message reports, and so on.
All the included services affect pricing structure. Ideally, being able to choose between an all-inclusive package or an à la carte service is the way to go. This plays into business models.
The basis on which an answering service bills also affects pricing. The two most common models are per-minute and per-call. If you compared five service providers on a per-minute basis, you would probably find a wide variety of pricing due to rounding-up practices.
Under both models, pricing tends to be tiered. You pay one rate if your call volume or minutes falls within a certain window. A higher window would mean a higher base rate.
Believe it or not, the technology that an answering service works with can influence pricing significantly. Some technologies make call answering more efficient, especially when they utilize things like automation and artificial intelligence. On the other hand, doing everything manually requires more work. You can guess which scenario would tend to lean toward higher prices.
Since companies do things in so many different ways, combining all these factors together inevitably leads to a lot of pricing variation. Will our industry ever simplify pricing? Who knows? The one thing we can say for sure is that it is important for you to fully understand a service provider’s pricing structure before signing on the dotted line.