Telephone answering services are billed in two ways: By the Minute or By the Unit. Knowing the difference between them will help you choose the right plan for your organization.
Answering services typically bill their customers in one of two ways: Minutes or Units. You’ll need to understand how the two are different and what the pros/cons are of both in order to choose the right answering service to suit your business needs.
A “Minute” is used to define a billable measure of time. Usually, this time covers any time live telephone answering operators are working on your calls. The number of minutes you are billed for as a consumer depend on how long an operator is on the phone with your caller. A “Unit” is also a billable measure of time. But a unit is different in that it is a flat rate which is billed to you no matter how long or short an operator is on the phone with your caller. Minutes cover actual time used on the phone. Units cover the number of calls that are processed.
So which is better?
Being billed by the minute is referred to as “time sensitive” billing or “true time” billing. Services that bill by the minute use this strategy to effectively cover their labor costs and maintain their margins should calls require extended duration processing. However, there are also many advantages to the consumer who chooses to be billed by the minute:
- Pay only for what you use: Since you are billed to the nearest minute, you are only billed for time operators are on the line with your callers.
- Gain billing efficiency on “short” calls: Because you are paying for operator time, short calls will be billed as they are. This is an advantage over Units billing because with units you pay a flat fee no matter how long the call is. Telephone Answering Operators often handle many short calls during a billing cycle.
- Manage call durations and provide better service: When you are billed by the minute you will receive reports that detail your average call durations. This is important because you can work with your answering service provider to determine what kind of call durations are required to provide proper customer service.
The biggest concern consumers of minutes billing often have is that they fear the answering service operators will stay on the line for excessive amounts of time in order to jack up the bill and cause hidden cost over-runs. This is why you want to look at your call detail reports to determine what kind of call duration averages your service is providing. For many basic answering services a call duration of about 1.5 to 2.0 minutes is normal. You also need to ask your service provider if they round-up their billing to a specific time interval. Expect a small amount of rounding but you want to avoid excessive rounding measures. Overall, you shouldn’t be too concerned about an answering service jacking up their call times to bill you excessively. This is a rarity in the industry and those who try it don’t last long in the business.
Units billing is often referred to as “per call” billing. A “unit” in the answering service industry is often defined as “A call received (even if no message is left), a confirmation call to check if your lines have been forwarded, a page sent out, a call dialed out, or a call transferred (patched) out.” Basically, this means that anytime an operator takes a call or makes a call you are billed a unit. There are a couple of advantages to billing by the unit:
- Pay a flat rate for calls: Pay a flat rate no matter what your call durations are. This can be a huge advantage to you if you have long duration calls.
- Avoid monthly billing variations: Often, with per unit billing, you can anticipate the number of calls your service will handle for you and control your monthly expenses. However, if you plan properly, you can also do this on per minute billing.
There are also disadvantages to units billing. First, you pay the same rate for a call no matter the duration. Normally, an answering service will handle multiple short-duration calls during the month. Every time they do this, you effectively overpay for those calls. Remember, you are billed a full unit for every wrong number and caller hang-up. Second, many calls often require multiple units to process. You are billed 1 unit for the call that is received, another unit for the call that an operator has to make to transfer (patch) the caller through to you, and possibly even another unit if the operator has to then call a backup person to deliver a message. It is not uncommon to be billed 3 units during the course of a single call transaction. Finally, it can be hard to determine how much time operators are actually spending on the phone with your callers. So figuring out what your average call durations are becomes a challenge, because some answering service companies do not track this metric (they only provide call counts).
If you have very consistent call durations (highly repeatable calls) then you may want to discuss flat rate billing with your service provider. There may be advantages to both of you.
Most telephone answering services bill by the minute, as per minute billing has largely become an Â industry standard today. However, there are still unit-based billing programs available. Now that you understand the difference you can shop with confidence!