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The 3 Most Popular Answering Service Rate Plans
Peter DeHaan

By: Peter DeHaan on November 30th, 2015

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The 3 Most Popular Answering Service Rate Plans

How Answering Services Work

It seems every telephone answering service bills differently. Let’s look at three common answering service billing plans, with two variations. Everything else is just a variant of one of these:

1. Base Rate Only

A few answering services still charge a fixed monthly rate and nothing more. This works great for them if you receive few calls; it’s bad for them if you receive a lot of calls. In fact they lose money on half their customers. The reality is that flat rate services have no incentive to answer your calls; they earn the same amount of money either way.

2. Usage Only

This seems great for the customer, and to a certain extent, it is. But answering services need to charge a monthly base rate to make sure they have enough staff there to answer your calls and to keep their doors open. This is hard if they only charge usage; it’s just too difficult to plan. In fact it’s such a challenge that few answering services try this approach.

3. Base Rate and Usage

This is the common billing strategy for answering services. The base rate helps them maintain staff and remain viable as a business. Usually the base rate includes a fixed amount of usage at no additional charge.

However there are two main variations for usage. This is when things start to get tricky.

Variation 1: Usage Can Be Units of Work:

Some answering services refer to these units as “calls.” This can be calls answered; it can also include calls made. A call made might also include sending a text, email, or fax, as well as leaving a message in voicemail. They may count it as a call made even if no one answers. Other possible units of work might include taking or updating on-call information, when you forward your line, testing your number to make sure it’s working, and so forth.

Variation 2: Usage Can Be Minutes of Work

Other answering services track usage by the time spent actually working for each customer, such as answering a call, placing a call, looking up information, sending an email, and so forth. Some answering services only bill for the time spent on the phone (likely because that’s all their computer can track), but they have to charge a higher minute rate to make up for all the work they can’t track. Billing for the time actually worked is the fairest.

In my opinion the fairest rate plan – for both the answering service and their clients – is a base rate that includes a package of free minutes with additional work billed by the actual time. You can’t go wrong with that approach.

Pro Tip: Watch out for other fees. They can really add up. I’ll talk about them next month.

How to select an Answering Service

About Peter DeHaan