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Common Business Phone Answering Service Plans

There are several different kinds of business phone answering service options. Knowing the differences will help you choose the right one for your company.

Image of call center agents taking calls for a business phone answering service plan

There are many differences in the way that business phone answering service plans are priced and sold. Business phone answering service companies will often customize their pricing plans as a result of:

  • What other answering service vendors in the local market are doing
  • What other answering service vendors in the national market are doing
  • What the economy is doing
  • What the market can bear
  • What they need to make to cover their operational costs

When you begin shopping for a business phone answering service you will find that there is not a standard established for the way service plans are priced. It’s kind of like what you find when you shop for a cell phone plan. Some carriers emphasize coverage area  while others offer more data. And others offer good rates on additional lines while some pitch cheap international plans.

However, there are some common building blocks in all business phone answering service plans. As long as you understand the building blocks, you will be able to shop for these services more effectively.

Minutes Pricing
When you shop for “minutes” pricing you are evaluating a vendor that sells their service by the minute. This is one of the most common ways that answering service plans are sold. The reason for this is that the business phone answering service vendor is able to bill for the entire duration of a call, no matter how long it lasts. From the consumer’s perspective, this is an advantageous way to bill because you only pay for the actual call duration – even if it is only a 15 second phone call. This form of pricing is virtually “real time” billing. But there can be differences in Minutes Pricing. Be sure to ask:

  • How are the minutes billed?
  • Is there rounding?
  • Are there minimums? For example, are all calls billed for at least 20 seconds before the minutes are tracked?

Units Pricing
There once was a time when it seemed like every business phone answering service in the industry used to bill by the “unit.” Billing by the unit means billing by the call on a per-call basis. A “unit” in telephone answering service is defined as call that is received or a call that is made (outbound dial). There are some other functions of work in an answering service that can also fall under the unit umbrella so be sure to ask – “How do you define your units?”

Vendors that sell business phone answering service on a unit basis bill the same amount for every call processed, no matter the duration. If a units vendor sells answering services for, let’s say, $.90/call and the customer’s average call durations are only 30 seconds each, the vendor is actually receiving $1.80/minute for all calls processed. This is a win for the vendor. However, if the customer’s call durations average 2 minutes each, then the vendor is only billing $.45/minute and is probably losing money. Advantage to the customer here. Units pricing only works well for the vendor if the call durations can be controlled.

Flat Rate
Flat rate billing plans are a bit of a mystery to me. I don’t know why any vendor would want to offer unlimited business phone answering services for $99/month. But, there are vendors that do offer flat rate pricing plans. There are a lot of variances in what is considered a “flat rate” but if you are talking to a vendor that sells service in this way you should proceed with caution and be ready to start asking LOTS of questions.

From the flat rate plans that I have evaluated there are usually all kinds of “exceptions” and “fees” that are wedged  into the plans themselves that help the vendor cover costs. But some vendors aren’t that clever and end up just giving away the farm and running their businesses unprofitably. Ultimately, this results in poor customer service. If you find a flat rate billing plan that is too good to be true, it probably isn’t true. Compare these plans carefully against more traditional units and minutes-based pricing plans before you buy.

Just about every business phone answering service vendor in existence bills for “overage.” Overage is the rate that is applied to all calls that are processed above and beyond the service plan that you have selected.

Let’s say you are on a “120-minute” answering plan. This means you have 120 allowed operator minutes during the month. If you generate 150 minutes then you just went over by 30 minutes and there is a rate applied to that. The same logic is applied to units pricing. When you evaluate overage, make sure that it is commensurate with the “base rate” that you are paying for your chosen service plan. It doesn’t make sense to pay $.90/minute on the base rate minutes and then find out that your overage rate is $1.20. Overage rates will normally be higher than the base rates but not by much.

Ah, yes. Fees. Everyone has a fee for something, so ask. It is good business practice to cover necessary fees. What you don’t want is a vendor that nickel and dimes you to death every time you turn around. Some of the most common fees that are charged are:

  • Holiday Fees – A small fee is applied on specified holidays. This is done by the vendor to offset payroll overtime that is accrued on such days.
  • Patch Time Fees – A small fee (either per call or per minute or flat fee) is applied for calls that are “patched” or “transferred” to another party. This is done by the vendor to cover line capacity costs on the switching equipment.
  • Account Setup Fees – Many vendors will charge a reasonable fee to help with the costs of setting up your business answering service account. There is a lot of work that goes on behind the scenes to script, program, and activate your account properly, so a small activation fee can often be expected.
  • Other Fees – ASK!

Billing Cycles
If you have a monthly business phone answering service, it should be just that – MONTHLY. You should expect to get a single invoice at the end of each month. This amounts to 12 billings per year. However, if you are on a 28-day billing cycle with your current answering service vendor, then you will actually receive 13 invoices during the course of the year. Fun, right! you get to pay 13 invoices over the course of a year rather than 12. If you shop a vendor that has a 28-day billing cycle ask them why they do this. Then be sure to tell them to put you on a 30-day cycle. If they won’t budge, move on to a service provider who won’t gouge you with an extra invoice.

Now that you have all the basics down, you can quickly compare and contrast business phone answering service plans  to find the best value available. Be sure to ask lots of questions and compare plans side-by-side before making a final decision.

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This entry was posted in Answering Service, Business and tagged , by Brian Gabriel. Bookmark the permalink.

About Brian Gabriel

As the Call Center Manager for Sound Telecom, Brian is responsible for overseeing the daily operations and long term success of the company while managing a variety of inbound customer support programs. He also has a hand in taking care of the Solaxis services division. Prior to joining Sound Telecom, Mr. Gabriel held management positions with several prominent Internet Services companies including and Brian started his career in advertising and sales before moving to Washington State. He joined AEI Music in 1995 and supervised their international customer service department and technical support call centers. Brian received a Bachelor of Arts degree in Journalism with a minor in Spanish languages from San Diego State University. Brian teaches adult education at his church and actively supports Christian ministries.