Procuring and Using Answering Services: A Guide

Given the prevalence of answering services in the business world, there is surprisingly little research on their actual use and impact. There are few places where businesses can analyze 1.) how an answering service can help their business and 2.) how it would integrate into their overall strategy.

Clutch surveyed 301 businesses which use an answer service provider, like an automated answering or voicemail system, at different companies across the US. The survey assessed businesses’ behaviors and attitudes toward answering services

This study underscores the following:

A. Businesses’ reasons for using an answering service

B. The features businesses prioritize when selecting an answering service provider

C. Typical usage and cost associated with answering services

D. General feedback and opinions on answering services

 

Key Findings

  • There is no one dominant reason why businesses use an answering service. Among those at the top are 24/7 answering capabilities and better customer service.
  • Call quality outranks price as the most important feature considered during the answering service selection process.
  • No single provider captures more than 15% of the market for answering services.
  • The cost of answering services depends on the volume of calls or incoming traffic a provider handles.
  • Businesses give overwhelmingly positive feedback about their answering services but are not loyal to a single provider. 41% say they are likely to switch providers within the next six months.

 

Recommendations

  • Keep tabs on the volume of calls your company handles, so you can estimate your monthly cost.
  • Since most answering services provide very similar features, identify differentiators, like industry knowledge or innovative technologies, that make a provider the best choice for your business.

 

Answering Services is a Varied Industry

 

Answering services is a sizable segment in the larger telecommunications field. They come in various shapes and sizes: the ever-familiar autobot you encounter when contacting a doctor or attorney’s office, the individual at a call center who directs phone traffic, and the auto-chat help bot that pops up when you visit certain websites.

Since the 1970’s, the public’s perception of professional answering services has remained essentially unchanged.

“If people think about an answering service they kind of still think that there’s one person, sitting by one telephone, trying to answer phones.”
Dan L’Heureux, Executive Director, Southern Telemessaging Association

In our survey, we identified three main forms of answering services that businesses use today.

  1. Automated answering services, including interactive voice response, auto attendants, and traditional voicemail services
  2. Live virtual receptionist
  3. Internet Platform answering services, including automated email responses, live web chat, and social media monitoring

 

 

Of the businesses surveyed, more than half (54%) use an automated answering service. Live virtual receptionists and internet platform answering services – answering services more adapted for the digital age – make up the remaining 46% of the answering services used.

 

There are no primary reasons or features that drive companies to use answering services

Even though no single reason for using answering services stands out, 22% of businesses highlight the appeal of 24/7 answering capabilities.

 

24/7 answering capabilities was chosen as the top reason to use an answering service by 37% of respondents, which was by far the most any of the listed reasons drew as a top three choice.

The lack of a clearly dominant reason for using an answering service is unsurprising, given the breadth of their use. For example, a small law office may use an answering service to handle incoming calls, the same way a university hospital may use them to streamline appointment scheduling.

Features

The survey also asked respondents to rate the importance of certain features of answering services on a scale of 1 to 5, with 5 being the most important. Similar to results about why companies use answering services, features considered most important when choosing a provider vary widely.

Call quality received the highest average rating (4.61 out of 5), followed by responsiveness (4.55).

The most surprising finding is that price was outranked by four other features. This most likely speaks to answering services’ low market price relative to their importance to the businesses that use them, in that the cost for answer services is low enough that other features take precedent.

"It’s good to see that price wasn’t the number one purchase decision factor. It’s encouraging that customers care so much about quality of service, features, and 24/7 availability."
Andrew Tillery, Marketing Director, Sound Telecom

Cost is dependent on the volume of calls handled

Answering services typically are priced based on month-to-month plan structures which are contingent on the volume of calls handled by the service. Most providers offer a variety of different plans, and prices vary based on the amount of minutes provided. If the amount of minutes in a plan is exceeded, charges are usually incurred by the minute at a predetermined rate. Higher tiered packages include premium benefits and services, such as 24/7 availability and, in some instances, some internet platform answering services.

This minutes-based pricing structure also applies to live virtual receptionists. However, internet-platform answering services are either added premiums to existing plans or separate services altogether.

75% of businesses pay between $50 and $1,000 a month for their answering services.

 

Meanwhile, 65% of answering service providers handle between 50 and 1,000 calls a day for businesses.

 

 

When we compared cost with the amount of calls handled, we found a direct relationship: as the amount of daily calls handled increases, so too does the amount of money businesses spend on their answering service each month.

 

 

The broad range of usage and spend reflect the fractured nature of the industry. Because businesses have such a variety of uses and attitudes toward answering services, how often they use them and how much they pay for them is quite varied.

“The answering service is selling time. They’re selling access to agents. The pricing is going to be all based on how people use it.”
Dan L’Heureux, Southern Telemessaging Association

Recommendation: When comparing prices of answering services, have an approximate idea of the volume of calls you expect a provider to handle. That way, you can accurately budget for the service, as well as better understand the level of service you can get at different price points.

 

People are Satisfied with their Answering Services

Most feedback businesses gave about their answering services is positive. Specifically, the companies surveyed indicated that:

  • Businesses find their answering services quite valuable. 75% percent said the value of their answering service is either ‘above average’ or ‘excellent.’
  • 'No issues’ was selected more than any specific problem or challenge with answering services.
  • 82% of companies say they receive positive customer feedback regarding the use of their answering service.

 

Value

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Companies overwhelmingly find value in their answering service, with only a measly 1% saying the value is ‘below average.’

“Obviously we believe that the answering services we provide have a lot of value, but seeing such an overwhelming majority of respondents in agreement that they are getting above average to excellent value is very exciting.”
Andrew Tillery, Marketing Director, Sound Telecom

The overall value derived from answering services is all the more significant given the variation in reasoning, focus, and cost companies devote to their answering services. In fact, the data also indicates a positive correlation between monthly spend and value. So, despite varying priorities or potentially rising prices, businesses find good value in their answering services.

 

No Issues

 

 

38% of respondents did not experience any issues with their answering services. Those that did experience challenges point to technical malfunctions (33%) and low call quality (24%) as the most common. However, technical malfunctions are much more likely to be identified as an issue for businesses that use a live virtual receptionist or internet platform answering service, both of which are more technologically complex services, than traditional, automated answering services.  

 

Positive Customer Feedback

  

The feedback companies receive from their customers about their answering service providers is nearly unanimously positive, with only 2% saying they’ve received negative feedback.

Customers Have Little Loyalty to Their Answering Service Providers

Despite this slew of positive feedback, most businesses do not show loyalty to their answering service providers, at least in the short-term.

 

41% of businesses are likely to replace their answering services in the next six months, compared to 28% of which that say it is unlikely they change. This fact is almost bizarre given the positive attitudes expressed toward answering services in this same survey.

“38% of your respondents said they had no issues, and 75% say it’s either above average or excellent in value, and yet you still have 40% that are likely or very likely to change. That doesn’t make sense to me.”
Dan L’Heureux, Executive Director, Southern Telemessaging Association

This disconnect between positive feedback and the likelihood to replace answering services is likely in part due to the nature of monthly contracts between businesses and their answering service providers, which allows a great deal of flexibility on businesses’ end to make a change of provider if they see fit.

 

Companies must seek out distinctions between providers

 

Another reason businesses are likely to abandon their answering service provider is the lack of distinction between providers. It is difficult to differentiate one provider from another. This dilemma is reflected by the fragmentation of the answering services market.

 

 

Respondents did not display overwhelming favorability toward any one particular service. While VoiceNation stands out as the most popular answering service company overall, it’s only by a small margin of 4%.

How to Differentiate Answering Services

The survey identified two main features businesses can use to distinguish between answering service providers.

1). Level of Innovation

An answering service provider’s level of innovation is measured by its use of up-to-date tools and technologies.

 

 

Nearly all of the respondents (94%) found their answering services to be either ‘somewhat’ or ‘very’ innovative. However, companies that use either a live virtual receptionist or an internet platform answering service are more likely to find their service ‘very innovative,’ compared to those who use a traditional automated answering service.

2). Industry Knowledge

Expertise in your industry can be make or break for answering service providers. Consider, for example, the importance of industry knowledge when operating in a medical or legal field.

 

 

An answering service’s industry knowledge and how important that they retain it is dependent on the industry the company operates in, both in terms of how knowledgeable a provider is and how important it is that they be knowledgeable of that industry.

 

 

However, service providers’ level of industry knowledge does not always correspond to the premium companies place on that feature.

 

 

For example, more than 60% of respondents in the healthcare industry said it was ‘very important’ that their answering service be knowledgeable about their industry. At the same time, the services knowledge of the healthcare industry ranked well behind those of other industries, such as telecommunications, IT, financial services, and retail.

Recommendation: When selecting an answering service provider, industry knowledge and innovative technologies are important factors to consider. If your business is in the market for a live virtual receptionist or internet platform answering service, it would be prudent to research how innovative their technology is. And, if your business operates in an industry with a high degree of technical complexity, ensure that the provider you choose has a track record of success in your specific industry.

Review

Based on the findings from the survey, Clutch recommends buyers of answering services:

  • Because cost is dependent on volume of calls handled, estimate the amount of calls you expect an answering service to handle for your business. That way, you more accurately shop and research the type of service and specific provider which fits your business’ needs.
  • Understand your needs as a business and identify the key features an answering service provides to meet those. This way, you can better distinguish between providers.

 

About the Survey

The study consisted of 301 employees who have decision-making authority when it comes to choosing answering services providers for their companies.

The majority of businesses (51%) have 2-200 employees, while nearly half (44%) had an annual revenue of less than $10 million in 2015.

The survey was conducted throughout October 2016.