Answering Service Buyers Guide – How They “Get You” And How To Get The Best Price
A guide to billing practices and hidden fees charged by call centers and answering services nationwide.
You’d be surprised to discover that a call center charging $0.85/minute can cost more than the $1.05 answering service. If you’re like most people you tend to think you’re going to save money by signing up with the contact center that charges the least per minute, and you’re not alone in that thinking. After all, simple math tells us that paying 20 cents more per minute will naturally cost more, but let’s uncover some common billing practices that ‘they’ don’t want you to know about.
Trick # 1 - Billing Increments
Back in the early 1980’s I worked for a call center, and later decided to go into business myself so that I could enjoy independence and earn more money. After all, as far as I was concerned I knew the business better than anyone, so how could I fail? Well, I learned hard lesson about billing increments and I hope you can learn from my mistake. Back in the 80’s long distance service was far more expensive than what we experience these days. Telecom companies billed us for every minute our operators were on the telephone, and for the call center industry that was by far our biggest expense. So naturally, when I started my company I shopped for the phone company with the cheapest per minute rate. My incorrect assumption was all phone companies offer the same service and to the extent that I get the cheapest rate I’d save money. Oh boy, was I mistaken.
Most of our calls did not result in reaching the contact person and as such our average call lasted about 20 seconds. The phone company I worked with billed us in 1 minute increments, and since my callers could often place 2-3 calls in a minute we were being billed 3 minutes for every minute on the phone. This never ended. Few calls ever lasted exactly 1, 2, or 3 minutes on the dot, and if a call lasted 2.1 minutes we were billed at 3 minutes. My phone bill was 3-4 times higher than our actual use and this nearly sent us into bankruptcy. The packaging was attractive on the front end, but the back end billing increments resulted in substantially larger bills. This is exactly how many call center bill their service today (though they themselves pay in real time).
Take Away: As you begin pricing out answering services make sure to ask every call center how their billing increments are handled. You will find that some call centers bill in 1-minute increments, some in 6 second increments, and some will bill in real time. Alternatively other contact centers will bill a minimum of 30-seconds and then in smaller increments after the minimum thirty seconds have been reached. Carefully examine the price points in combination with the billing practice before you make your final decision. We recommend never going with a company that bills by the minute – there’s no way you’ll win. It is possible, however, to go with a call center that bills at a lower rate billing in 6 second increments than it is a company that bills at a higher rate for 1 second periods. Generally speaking, if the price point is close, you may be better off to choose to take the solution that bill in real time.
Trick # 2 - Call Patching Fees
Some businesses will have the answering service patch calls (aka transfer calls) for various reasons such as new clients or people that meet certain criteria – such as an attorney may ask that calls from judges would be patched through instead of just taking a message. All answering services charge different rates for this call patch service, and here are a few examples:
Flat Fee Per Call Patched: In this case you’ll get a fixed rate for each call that is transferred to your phone. This fee can range from $0.25 - $1.25.
Time Billed Call Patching: This one can really get you and run up a huge bill. Once these calls are transferred the call is then billed for the entire duration of the time you remain on the call. So, even if the rate is low, if you have a 20 minute conversation then you expect to get a hefty bill for this call.
Take Away: We would never recommend a service that offers time billed call patching because it’s just too risky and the odds are stacked against you for saving and money. This leaves you with two options. Some services do not charge a call patch fee, but may have a higher rate. Do the math and, as best you can, calculate how many calls you expect to be transferred in a given month. From there decide which plan you would fair out better on, be it the small fee per transferred call of the fixed rate.
Trick #3 - 28 Days Billing Cycles
The 28 day billing cycle is possibly one of the best (and sneakiest) tricks in the book that will raise your cost by 8.3%right off the bat. Sure, this seems harmless, but getting billed every 28 days means you get 1 extra bill every year. Do the math and divide 365 days by 28 days and you end up with 13 bills over a 12 month period.
Take Away: Insist on a 30-billing cycle if possible. There is no valid reason to invoice you every 28-days (aside from earning more money).
Trick # - 4 Holiday Fees
Some (but not all) inbound call center service providers will charge a special fee for nationally recognized holidays. This fee ranges from $5-$15 per holiday, and for the smaller company this can add up. It should be noted that this fee is usually fair because call centers generally compensate their staff at a rate of time and a half for working on holidays. The concern is when you only expect to have a couple calls (or no calls) answered over the holidays. If your office has an excess of 100 calls a month this fee won’t cost too much in the overall picture and therefore is doesn’t need to be overthought. However, it does become a worthy consideration if your inbound calls range between 0-20 calls a month because your going to pay this fee at least 6 out of 12 months – New Years, Easter, Memorial Day, Independence Day, Labor day, Thanksgiving, and Christmas
Take Away: If your inbound calls don’t exceed twenty per month then it’s best to avoid this charge on holidays. Either ask for it to be waived or look for another contact center.
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