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What’s the Value of Your Answering Service?

What’s the Value of Your Answering Service?

When Considering the Big Picture, Answering Services Provide Tremendous Value

Too often managers look at the cost of an answering service but fail to consider the immense value their answering service provides to their organization. This value can be found in several areas, providing an overall cost savings, increased revenue, and enhanced brand image.

Your answering service provides great value by offsetting several significant costs:

The Cost of Doing It In-House

Without an answering service, you would need to answer all your calls with your own staff. In addition to handling every call during regular business hours, it’s a logistical nightmare figuring out how to do it after hours. To handle all your calls in-house would mean hiring and training people to answer your phone 24/7, around-the-clock.

This is an expensive proposition. In addition to the hourly labor cost are benefits, management, and overhead expenses. Benefits cover the biggest amount. They include vacation days, personal time off, sick time, possible overtime, paid breaks, and the list goes on. But the biggest expense goes to healthcare insurance, which often has a year-over-year double-digit rate increase.

Management costs include the time to supervise and schedule these employees to answer your phone, as well as interviewing, hiring, and training them, not to mention possible corrective actions or disciplinary measures. Overhead expenditures include human resource expenses, payroll costs, workmen’s comp insurance, and unemployment contributions.

These add up. The cost for just one full-time equivalent (FTE) to answer your phone could easily surpass $25,000 a year. But you need four of these employees to cover your phone 24/7. That means $100,000 annually. At only a couple hundred dollars a month, your answering service becomes an absolute bargain.

The Cost of Lost Sales

As an alternative to answering your phone calls in-house, you could decide not to bother. You could just let your phone ring or have voicemail handle it. But most people won’t leave a message. They’ll hang up as soon as they get a recording. What if they’re calling to place an order? Then you likely just lost that sale. Don’t expect them to call back when you’re open. Instead they’ll call your competitor, who does answer their phone, to place the order with them. What if this happens every day? Or once a week? Even if it’s just once a month, that lost sale could likely cover the cost of your answering service for the entire month.

The Cost of Missed Opportunities

Not every call represents a potential sale, however. But that doesn’t mean these other calls should be dismissed. They might be leads, prospects that could turn into customers and provide revenue for you throughout their entire customer lifecycle. What is the lifetime value of just one customer? Surely it would cover the cost of your answering service for many months.

The Cost of Poor Customer Service

Aside from sales and leads, other calls have value too. It may be a call about a problem with a product, service, or delivery. Don’t make them wait. The faster you address their concern, the easier it will be to resolve. Often your answering service can do this for you on that very first phone call, even if it comes in at 3 a.m. on the weekend. Don’t make frustrated customers wait for a response. If they can’t talk to you, they’ll surely talk to anyone else who will listen. And the things they say could have a high price for your company.


Some managers mistakenly focus on their company’s or department’s income statement without considering a holistic view. For very little money, the monthly cost of an answering service provides so much more value in terms of labor reduction, increased sales, gaining new customers, and turning customer problems into service wins.

But without your answering service, you won’t realize any of these outcomes. Your answering service provides a great value. Don’t risk losing all that to save a little bit of money on the front end.

Richard L. Hutcherson is the director of operations for Answering Service One, a new kind of answering service that wants to become your number one resource to handle your communication needs. Contact Richard at 865-505-0456. Peter Lyle DeHaan is a freelance writer from Southwest Michigan. Check out Answering Service One to see if they’re the right answering service solution for your business.

  • By: admin
  • On: February 12, 2019
  • In: Blog Post
  • Comments: 2 Comments

2 responses to “What’s the Value of Your Answering Service?”

  1. You did a great job of explaining how beneficial an answering service to business entities. My cousin has just forwarded me this article because she wants me to help her in deciding if she needs to get one. I am just wondering if we can also install one in our house although we have no business.

  2. I have been looking into getting an answering service company. It would be useful to have some insights into what makes a good service in general. Knowing that customer service will be top-notch is really useful.

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