How much should your business be paying for call answering services?

In this article, I look at the cost of call answering by comparing how different UK call answering companies price their services.

As the sector is ever-evolving, I cannot hope to claim that the article is comprehensive. However, it should provide you with enough information to allow you to estimate how much call answering services would cost for your organisation.

On a point of clarification, call answering services are often referred to as telephone answering services, virtual reception services, outsourced reception services, e-receptionist and more besides. This article covers all of these.

Pricing per minute

Let’s initially take a look at Paperclip’s approach and then compare it with alternative call answering cost options. Paperclip’s pricing model is based on charging per minutes used. A popular alternative pricing model is call bundling which is explained later in this article.

If you choose to work with Paperclip you will receive a monthly bill which will be made up of three elements:

• A fixed monthly support charge – £85
• A calls charge based on the number of minutes we have spent handling your calls. This will vary from month to month and will be charged at 85p/minute.
• A small charge for each incoming call transferred to your number(s): 20p

Monthly support charge

Let’s look at each in turn. In the case of Paperclip, the fixed monthly support charge is there to cover some of our fixed operating costs. These include, amongst many others, line maintenance, IT and telephony support, and software licences. Paperclip’s monthly support charge is currently £85. Most telephone answering service providers, though not all, will include a fixed price element in their monthly bills.

If providers don’t charge a monthly fixed charge, the expenses covered by the charge will be recovered by inflating the pricing of the call itself.

Calculating minutes used

Paperclip’s pricing model is based on a client paying for the minutes Paperclip’s team spend handling their calls and ongoing work associated with those calls where relevant. Paperclip invoices in increments of a minute i.e. the minimum charge for a call is a minute of time. We also round up to the nearest minute. For example, if we answer one of your calls and the call lasts one minute forty-five seconds, we will invoice for two minutes. Paperclip’s current charge per minute is 85p. There is also a charge of 20p for any incoming calls that are transferred to a client’s number.

Depending on the client in question, there may be considerable follow-up work to complete away from the phone. For example, we handle the calls for an equity release business. When we receive an enquiry for a new lead, we pass on the basic contact data along with a Google Earth image of the property in question and an estimated value of the property. The valuation is sourced online. This ensures that when the equity release provider contacts the client they have the key data at their fingertips. This ‘administration’ work is charged out by the minute to the client.

Set-up costs

Paperclip, like many telephone answering service providers, charges a one-off initial set-up fee. For organisations of up to 100 employees, this is currently set at £99. Nominally, this charge is to cover the cost of setting up your account on the Paperclip system, and checking that the system and set-up work correctly when your number(s) is dialled. In reality, we spend a lot of time with clients reviewing the options available to them and helping them decide on the process they use. It is an opportunity for a client to change internal systems that may have been left in place for years and which are potentially no longer fit for purpose.

Minimum contract periods for call answering

Paperclip operates on a monthly rolling contract. Our approach is to retain your custom by providing professional, tailored and affordable call answering services. 

Other providers may have longer contract arrangements, for example committing to a given number of calls for a year, or, in some cases, none at all.

Paperclip quotation generator

The Paperclip Quotation Generator is free and straightforward to use. It makes it really simple for you to create an monthly cost estimate based on usage.

You can change the number and average length of calls as many times as you like to build a picture of how costs may vary when, for example, your reception team is compromised due to illness, holidays or being deployed on other tasks.

You are also able to download a PDF of your calculation.

Call answering costs by call bundling

There are different ways in which other providers price their telephone answering service offers. The most common of these alternative approaches is ‘call bundling’. Readers of a certain maturity may recall that call bundling was commonplace when the first mobile phone contracts were introduced.

With call bundling, you pay for a certain number of calls per week or per month. For example, you may buy a call bundle of 100 calls per month. You will pay the same charge regardless of whether you use up all of your calls or none of them. There will also typically be a unit price per call should you consume more than your bundle over any given period. In many cases, you will need to sign up for a given contract period such as a year.

Call bundling has significant benefits for the provider. It delivers a guaranteed minimum income from each client which is good from a forecasting and business planning perspective; it ties the client in for a known period effectively taking them out of the market; if the contract automatically renews, and the client is not minded to look for alternatives, it provides a relatively straightforward renewal income stream.

Call bundling may be attractive to clients where cost certainty is a high priority. Many clients, however, find they rarely use the complete call bundle and this makes the true cost per call far more expensive than the headline figure. For example, if a client signs up for a call bundle of 100 calls at £1.50/call they will pay a fixed cost of £150/month. If only 40 calls are used during the month, the actual cost per call is £3.50. It is important to understand the dynamics of the call bundling arrangement if you are considering signing up with a call answering service provider that uses the call bundling approach.

Fixed call rate pricing

There are some call answering service providers that pitch no monthly service charge, no cost per minute and no call bundle i.e. they bill on a fixed cost-per-call basis with no minimum monthly cost. I only have limited experience of dealing with these companies. If the quality of service is acceptable, this could be an option for those wanting a basic messaging service.

‘Pay as you go’ pricing

I have seen some evidence, albeit very limited, of call answering companies offering a ‘pay as you go’ (PAYG) pricing option. This appears to be similar to some mobile phone contracts, in that you pay a certain amount up front each month and then ‘top up’ as and when needed, or as and when the ‘top up’ can be afforded. As soon as I have more information on this I will add it to this article.

Summary

In summary, there are two ways in which professional call answering service providers charge.

The first, as used by Paperclip, is on a minutes-used basis with some element of fixed monthly service charge.

The second is on a call bundling basis.

There are other, less common, pricing models such as fixed call rates and pay-as-you-go (PAYG).

When you are comparing call answering service providers don’t forget to check for charges that may potentially be hidden on first viewing such as additional costs for transferred calls, and also look out for any minimum contract period as this will impact your financial commitment.

Pricing is just one element to consider when comparing telephone answering service providers. Other factors to take into account include service levels (beware any company that claims to answer 100% of calls in three rings or similar), the quality of your relationship with your provider, the experience of the provider working in the same sector as your organisation, the ease with which you can modify your requirements, ability to have VIP and restricted call listings, call recording, the length of time the provider has been in business, reporting and invoicing, and so much more.

Pricing is an important aspect when deciding which call answering service provider to use, but it should not override questions of quality, experience, and ability to flex to meet your specific needs.

Send me your questions

If you have questions relating to telephone answering pricing then please call me on 01246 418 181 or email at louise@paperclip.co.uk and I will get back to as quickly as I can.

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