We work with a lot of small businesses and most of them tell us that price is the single most important factor when selecting a new answering service. So if you’re looking for an answering service, you’re probably comparing prices first. And with that, you’re likely finding varying degrees of cost, as well as different billing metrics, i.e. per call, per minute, or flat rate. For the cost conscious small business, we’re going to discuss how per call answering service billing can align with your budget.

Per call billing, also known as per action billing or per increment billing, gives you a billing method that is based on how many actions the answering service performs on each call and not the length (talk time) of the call. Actions usually include text messages, faxes, warm transfers, cold transfers, pages, and reach attempts. Depending on how your protocols and message delivery options, per call billing allows you to tap into a lower pricing structure compared to per minute billing.

Here’s how per call billing can meet the needs of your small business and stay on budget:

1. It’s not based on the length of the call

As the name suggests, a per-call billing structure is based partly off the number of calls a customer gets and not the length of each call. On a per-call structure, customers will typically pay for each incoming call in addition to any action the operator takes while handing the call. These actions can include outgoing calls (like warm or cold transfer, or following an on-call procedure) as well as the sending of texts and/or emails.

Depending on how many calls your business gets a month and what those calls consist of, per-call billing is generally a cheaper method of answering service billing. For example, a customer on a per-call service level may receive 10 calls a month, which may result in 6 messages, equaling 16 total call counts. Their monthly invoice may hover around $50. However, a customer on a per-minute service level may receive the same number of calls, but each call may last 10 minutes. This would make their monthly invoice hover somewhere between $100-$120, respectively.

2. Message delivery adjustments can decrease cost

Since per-call billing includes each inbound call in addition to each action taken by the operator, costs can begin to add up. However, if you’re looking to keep costs low, you’ll want to look for a per call answering service that allows their customers to customize how they receive their information.

For example, if multiple people in your business are receiving texts, see if your answering service can group them all into one call count or one billable action, instead of counting them all separately. Another great way to help keep costs low is by customizing when you receive messages. For example, asking your answering service to send all urgent messages as they come in and send all general messages in one report at the end of the day or the beginning of the next day can help eliminate excess costs and allow your staff to prioritize call-backs more efficiently.

3. Transfer and reach adjustments can decrease cost

For a small business working with a tight budget, there are ways to help save money and reduce costs. Adjusting how your answering service transfers or reaches out for calls can help keep invoices low. Since each call out would be considered as a call or a billable action, you’ll want to limit each transfer or reach attempt and make sure your answering service is only reaching out for urgent situations.

For example, if your answering service was transferring every call to your in-house team, your call counts will start to stack up, resulting in higher and perhaps unexpected invoices. However, if you implement guidelines of when they should reach out and how often, you can help keep your answering service bill low while still making sure your customers are receiving the best possible care.

4. Not paying for technology you aren’t using

Generally speaking, most answering services that charge per-minute offer an advanced system which you can access, usually including access to an online portal and innovative features like access to call recordings and the ability to update your script in real time.

While having access to an online portal is helpful, not everyone needs all of the bells and whistles that typically cause an answering service to be a bit more expensive. Many folks are totally fine with just having a standard answering service set up with limited features, and can wind up saving money because of it.

5. Same access to important features, like scaling and customer support

While per-call services might feel a bit more antiquated in terms of advanced features offered, they aren’t. Where a per call service may not be able to offer technological advancements, they will make up in personal customer service. Traditionally, smaller per call services are known for exceptional quality service to your customers, and can even scale along with your business. For example, many per-call answering services are smaller in size and can easily offer your customers a personalized experience. They’ll get to know your customers and you’ll get to know them, too! Answering service agents who are familiar with your brand are usually more engaging with callers and can help drive sales and increase customer retention.

As your business grows, your answering service will be able to grow with you. In fact, many businesses that start out on an answering service’s lowest plan usually find themselves needing to increase simply because of how many calls they’re getting that they previously wouldn’t be able to handle. More calls leads to more business, which leads to more money to reinvest in the growth of your brand.

The post 5 Reasons Per Call Answering Service Billing May Be Right For You appeared first on Specialty Answering Service.

Depending on your call volume, tweaking your script and protocols can lower your bill by as much as 25%. Keep reading for some simple ways you can lower your answering service invoice:

Scripting

Answering service scripts, or the formatted conversation the virtual receptionists have with your callers, are one of the biggest culprits behind high answering service invoices – and the best place to look for cost-cutting opportunities.

1. Remove unnecessary questions: Having your answering service gather information from your callers by asking loads of qualifying questions may seem helpful, but in the end it will only eat up time – and money. A better option is to have your answering service gather the basics, and have your in-house team follow up with the nitty-gritty.
2. Eliminate paths that aren’t used to simplify decision making: When using an answering service, it’s important to remember that the operators handling your calls are not experts in your business. So, to avoid errors and lengthy calls, you’ll want to eliminate script paths that may clog up the workflow. For example, if your script has paths for Quote calls, Sales calls and Service calls, your agents may have trouble deciphering when to take each path. If you don’t want to eliminate any paths, then we recommend adding a driving question up front that will help steer the call and guide the operator to the correct path, like “Thank you for calling ABC Medical, is this an emergency?”
3. Consolidate paths where available: Within any business, there could be a hundred different reasons why a customer may be calling, but that doesn’t mean you should include every possible scenario in your answering service script. A better approach is to include the call scenarios that come up most frequently, like calling to schedule an appointment or calling for service, and then have a general path the operators can take for everything else. If you want your operators to take messages or transfer calls for specific people or departments, you should consolidate those two options into one path which would include a list of names and departments. The more succinct and straightforward your script is, the less time the operators will spend on the phone and the lower your invoices will be.
4. Adjust lengthy FAQs into their simplest form: While it is helpful to arm your answering service operators with frequently asked questions about your business, you don’t want to stuff in every possible answer to every possible question, and you also don’t want to write paragraphs of information. Not only will the operators have trouble navigating lengthy and complex FAQ sections, but the more information you add, the more time it will take them to read through and find whatever they’re looking for, which will definitely result in higher invoices. We always recommend to keep your FAQs short and sweet. After all, you are the best person to handle the more in-depth questions your customers may have.

Protocols

Unnecessary protocols are the second largest expense behind most high invoices. To guarantee a cheap answering service, adjusting how you’re contacted for messages can make a sizable dent in your overall answering service bill.

5. Replace warm transfers with cold transfers: With many answering services that charge by the minute, warm transferring calls to you or your in-house staff does come with a price. While you’ll most likely not be charged the same rate once the call is transferred, as long as that line is being used, you’re being charged a patch or transfer fee. If you need your service to transfer calls, a better approach would be to have them cold transfer instead of warm transfer. If no one is available, your callers can simply leave a message for a return call which will help keep your invoices lower.
6. Reduce the number of outreach attempts associated with an on-call schedule: If you’re having your answering service reach out to your on-call staff, a good way to keep your invoices low is to limit the amount of times your operators are reaching out. If each reach out attempt takes 1-2 minutes and your operators are reaching out until someone answers, and all of your employees are dodging work, you’re going to have a hefty bill on your hands. We suggest capping your reach attempts at 3 and leaving a message so your staff has the information they need to call the customer back.
7. If on a per-call billing model, evaluate how and when messages are sent: Not all answering services charge by the minute, and a per-call answering service structure may wind up being more cost effective for you. Typically on a per-call billing model, each inbound call counts as a call, as well as any action the operator takes (like emails, text messages, transfers, etc.). Because of this, any message you receive may wind up costing you. However, if you’re working with a tight budget, there are some ways to help keep invoices low, like controlling how and when messages are sent. For example, you can work with your answering service so that any urgent message comes through right away, and all other non-urgent messages can be sent together as a report at the end of the day, or the beginning of the next day. That way you can consolidate your messages, and lower your invoices.

Technology

If you’re looking for a low cost answering service, leveraging technology can help with that. Using the technology available to you can reduce your live operator talk time and lower your bill by as much as 12%.

8. Use IVR to route calls: While virtual receptionists are great at transferring calls, a small business working with a limited budget needs to cut out any unnecessary expenses whenever possible. Instead of having your answering service transfer calls for you, implement an auto-attendant that can route calls instead. Callers will be able to select whichever option suits them best, and be immediately directed to the person or department they’ve selected. While IVRs may come at a price, they’re way cheaper than the general cost of live operator talk time.
9. Give customers a voicemail option: In a time where customers are used to getting answers immediately, voicemail isn’t always a preferred method of communicating with a business. However, if given the choice, many consumers are fine with leaving a message to have their call returned at a later time. Not every question or inquiry needs an immediate response, and the more customers willing to leave a voicemail means less money you have to dish out for your answering service invoice.
10. Update your script or on-call on your own to eliminate programming fees: Updating your answering service protocols can sometimes incur programming fees. To avoid these extra fees, it’s a good idea to become familiar with making updates on your own, if your answering service offers it. Additionally, making updates on your own means you are in total control and don’t have to wait around for the programmers to complete it, which may take several days.
11. If you get charged for message transmissions, use an app or web portal instead: Depending on the answering service you use or the service level you’ve signed up for, you may be charged for message transmissions. However, if your answering service offers a free mobile app or web portal, you can eliminate the cost of message transmissions by simply checking your app or portal for new messages. Mobile apps are very helpful for users who are constantly on the go, like medical professionals and utility services.

Others

Outside of auditing your scripting and protocols while adding technology layers to lower your invoice, there are a few other options.

12. Eliminate sub accounts if they aren’t getting traffic: Adding sub accounts are a great way to keep multiple business lines consolidated under one roof, but they’re not always necessary. For example, some businesses may want to be accessible for Spanish speaking customers and opt to open up a Spanish sub account. However, if you’re hardly getting any traffic on the Spanish line, it probably isn’t worth the extra charges.
13. If you get charged for a toll-free number, request a local: Some businesses like to use toll-free numbers to either make their company seem more official, or so out of town customers don’t get charged long distance fees. However, answering services may charge extra to use toll-free numbers, which may not be cost effective for your business. Local numbers are usually free, and if you’re forwarding your own lines to the service, then your customers will never see that number anyway!
14. Adjust the times you’re sending traffic to the answering service: Generally speaking, answering services are available to answer your calls 24/7. However, that doesn’t always mean you should use them around the clock. The more phone traffic your answering service handles, the higher your invoices will be. If you’re strapped for cash, then you’ll want to limit the times in which you use your service. For example, having your in-house staff handle calls during the day and having  your answering service handle calls after hours is a great way to keep your call volume and invoices low.
15. Eliminate telemarketing calls: It’s no doubt that telemarketers love to call. It is their job, after all. However, it doesn’t mean you should have to pay each time they call and eat up your minutes. If you’re getting a lot of robo-calls, we suggest adding an IVR upfront which would prohibit those calls from coming through. If you have actual people calling, you can set up a path within your script the operators can follow which simply tells them you’re not interested. If they’re still persistent, see if you can have their number(s) blocked either through your phone provider or your answering service.

For more about answering service pricing plans, per minute and per call pricing, flat rate answering services, pay as you go plans, and more – please check out our Ultimate Guide to Answering Service Pricing.

The post Top 15 Ways to Lower Your Answering Service Bill appeared first on Specialty Answering Service.

In the call center industry, both live-operator and automated solicitation calls use autodialer technology – telecom software that enables a telephone system to call out to hundreds of numbers consecutively. The benefit to the answering service is instant, as the service can maximize marketing efforts while minimizing the time it takes to dial number after number. While this level of efficiency is great for answering services, it’s not so great for business owners who are receiving solicitations on the regular.

If you’re using an answering service, you don’t want to pay for usage not directly tied to your business. However, since all calls that an answering service fields are billable, you’re inevitably going to pay for some sort of inbound telemarketing. With a per-minute plan, this may not affect your bottom line that much, as most per-minute rates bill by the second. But for per-call clients, the tally can quickly rack up, eating into your plan allowance.

While no business can stop solicitation calls entirely, we’ve put together some information below that should help you limit those inbound hits, and simultaneously reduce the cost of your answering service.

As a consumer, am I protected against robocalls?

Absolutely. Unless you’re RoboCop, and your mother board is giving you a shout out, companies can’t just dial up consumers whenever they want. In fact, according to the Federal Communications Commission, robocalls and telesales are their number one source of complaints. That’s why Congress approved the Telephone Consumer Protection Act (TCPA) in 1991. In a nutshell, without prior consent to call or text your home or cell phone, autodialers and automated telemarketing are against FCC regulations. Registering your numbers on the National Do Not Call Registry is the first step to stopping the madness. Bear in mind, though, that there are a few exceptions to the FCC’s rules, e.g., emergency alerts, political polls, charities, and debt collectors.

What about small businesses whose personal phone is also their business phone?

If you’re a business owner, even if your personal landline or cell phone is being used for work, then the aforementioned regulations apply. In other words, it is still within your rights as a consumer to list those numbers on the National Do Not Call Registry. The tricky part comes when businesses are trying to stop solicitation calls from other businesses. Unfortunately, there is no provision for Business to Business calls under FCC regulations.

B2B calls, when business A is trying to solicit sales from business B, are perfectly acceptable. If you’ve outsourced customer support to an answering service, solicitation calls can quickly jack up your monthly usage. Operators are trained to hang up on robocalls. But hanging up on a live caller? That would be pretty darn unprofessional, not to mention that some solicitors are adept at keeping an operator on the line until they get the information they want.

As a business owner, what recourse do I have?

There are a few things that you can do to reduce or eliminate solicitation calls altogether.

The basics…

1. If you can identify which numbers are from solicitors, ask your phone provider to block them from ever getting through to your line. Taking matters into your own hands, you can likely block callers yourself, directly from your phone or online account. It may also be possible to prohibit calls from “private” numbers or toll free numbers.
2. If you haven’t already done so, add your phone numbers to the National Do Not Call Registry. Remember, even if your home or cell phone doubles as your business line, you are still entitled to the same protection that consumers are afforded. After your numbers have been on the registry for 31 days, if you’re still receiving robocalls, you can file complaints against any businesses that simply won’t leave you alone.
3. For robocalls hitting the answering service, consider the effective software solution of including an upfront IVR that instructs callers to press 1 to reach an operator. As clever as autodialers might be, they can’t press buttons. IVR isn’t free, but the fee is generally minimal, and the benefits will far outweigh any out-of-pocket cost.

Use scripting to your advantage…

1. Include a path in your call script specifically for inbound B2B solicitation. Once the operator realizes what the call is about, they can read a standard closing response such as, “We do not accept solicitation calls. Please remove this number from your list. Thank you.”
2. Add a screening question to the operators’ greeting such as, “Are you a current client?” or, “Is this an emergency?” This should filter out the calls you want from the calls you don’t.

Talk with your answering service about what suggestions they have, or ask them to implement the ideas that we’ve outlined. While no solution is foolproof, these points will go a long way towards helping you beat the bots and bolster your small business’ bottom line.

The post What to Do When Telemarketing Calls Are Jacking Up Your Answering Service Bill appeared first on Specialty Answering Service.

With the right call center on your side, you can invest time fostering relationships with existing customers without missing opportunities to qualify new leads. The easy part is making the decision to work with an answering service. The hard part is knowing which one to choose. Not only are there innumerable call center companies, but there are also different pricing models that, at first glance, may be a bit confusing. In “The Ultimate Answering Service Pricing Guide,” we’ll review four pricing models, their benefits and downfalls, which types of accounts may work best with each, and a list of the potential charges that you may incur. Let’s get started!

1. 4 Basic Pricing Models: Learn about Per-Call, Per-Minute, Flat-Rate, and Pay-As-You-Go pricing models.
2. Benefits & Downfalls: Depending on which pricing model meets your needs, each structure has pluses and minuses.
3. The Value in Cost-Effective Design: Learn how to cut costs while making the most of your call center experience.
4. Standard Fees & Up-Charges: Review the standard fees and potential charges associated with your service.
5. Buyer Beware: Less isn’t always more. Do your research before going with an ultra low-cost service.
6. Billing Considerations: Be informed about topics such as contracts, how often you’ll be invoiced, and more.
7. Cancellation Process: In case you ever need to leave service, be sure to carefully review the cancellation terms.
8. Conclusion: Breeze through a quick re-cap of key points, and you’ll be on your way to finding your ideal service!

4 Basic Pricing Models

The first thing to know about call center pricing is that there are four pricing models to choose from: Per-Call, Per-Minute, Flat-Rate, and Pay-As-You-Go. They are all relatively different and will have pluses and minuses, depending on your needs. Read on for a brief description of each model along with typical base-rate pricing and supplementary fees.

Per-Call Pricing

Billing for per-call plans is based on the quantity of inbound and/or outbound actions on your account. An action may consist of inbound and/or outbound calls, inbound and/or outbound texts and emails, daily reports, paging, faxes, call wrap-up time, etc. The length of the call is not taken into consideration but rather the sheer volume of actions during each billing cycle. While it may sound simple, it’s not as straightforward as you might think. In fact, if you look at everything that you might be charged for, it can be pretty tricky.

With per-call services, their goal is to process each call in under a minute to maximize profits. The easiest way to do that is to take nothing more than a basic message. That generally means Name, Number, and Regarding. Anything more complicated than that, e.g., a reach on-call schedule, warm transfers, or having the operators answer FAQs, is going to cost you. And there are some things you just can’t do with per-call such as order taking, website navigation, etc.

Typical Pricing: With some per-call plans starting as low as $19, base rates may or may not include a set number of call counts per billing cycle. Overage fees are assessed for each action if your base rate does not include any calls or when you exceed the cost-effectiveness of your selected plan.

Overages: While overages can range anywhere from $0.45 to $1.75 per action, most seem to fall between $0.65 and $0.85. Overage fees are inversely correlated to the cost of the plan. As the plan increases, the overage fee decreases.

Expected Add-On Fees: In addition to overage rates, per-call accounts often have incremental fees that may be assessed for items such as: changing on-call personnel, email and text notification, temporary status updates, call reports, auto announcements, initial programming, script modifications, call transfers, holiday fees, etc. For example, if you dial your forward number to make a last-minute on-call switch, you will likely be charged a call count for the call you placed along with an “If” charge and a “Locate” charge: If there is an emergency, Locate a different on-call tech.

Usage Case:

• $150 for 200 calls
• $0.70 for each overage
• $0.50 for each message delivered on each call
• 250 calls with 2 texts and 1 email on each call
• TOTAL: $560

Per-Minute Pricing

The key to per-minute pricing is that any inbound or outbound calls are billed in increments. The service you select may bill in 1-second, 8-second, or 15-second intervals, they may have a 30-second or 1-minute minimum per-call, etc. Accrued time includes any time that the operator is engaged in some part of the call. This includes speaking with the caller, placing them on hold, transferring calls, entering wrap-up notes after the caller has disconnected, and contacting on-call staff. For example, the operator may speak with the caller for 1.5 minutes, and it may take him 45 seconds to document details or 3 minutes to get ahold of an on-call doctor. This is all included in live-operator time.

The best-case scenario is finding a service that bills by the second. Service providers that are offering per-minute plans may or may not include additional actions, such as text and email notification, in your base rate. In that case, each action may incur a separate fee.

Typical Pricing: Just as with per-call pricing, per-minute base rates may or may not include a set number of minutes per billing cycle. Overage fees are assessed per minute if you are on a basic plan that does not include any minutes or for exceeding the usage threshold of the plan you select.

Overages: Fees will vary depending on the allotted minutes. On average, they range from $0.90 to $1.20 and are also inversely correlated to the plan price.

Expected Add-On Fees: Per-minute accounts may have similar incremental fees to per-call accounts such as programming, patch minutes, IVR, etc. In most cases, there are less add-on fees for per-minute accounts than per-call.

Usage Case:

• $150 for 200 minutes
• $0.70 for each overage
• Message delivery included
• 100 calls @ 3-minutes average = 300 minutes with 2 texts and 1 email on each call
• TOTAL: $220

Flat-Rate Pricing

Flat-rate pricing can be cost-effective or a budget-breaker, depending on how steady your call volume is. In some respects, it is like per-call or per-minute pricing where you are paying a base rate for a package of calls or minutes. The difference is that there is no overage rate. There may be a handful of services that offer a truly flat rate no matter your call volume. However, in most cases, flat-rate pricing means that once you reach a plan’s threshold, you are automatically bumped up to the next plan. For example, if you pay $100 for 125 minutes, and you reach 126 minutes, your plan will increase to the next pricing tier, e.g., $200 for 250 minutes. That means you may wind up paying a considerable amount more for only minimal overages.

Typical Pricing: Flat-rate pricing can vary widely depending on the plan you select, so it’s best to have a good idea of your average call volume before you make any decisions.

Overages: While some services may say that they are charging a flat rate, if they are also advertising overage fees, then it is more likely per-call or per-minute billing.

Expected Add-On Fees: Pricing for simplified flat-rate service likely only covers the actual calls or minutes included in the plan you select. While flat-rate plans may offer features such as call transfers, appointment scheduling, etc., you will pay a premium for those services.

Usage Case:

• $150 for 200 minutes
• No overage – automatic upgrade to next plan at 300 minutes ($250 for 300 minutes)
• $0.50 for each message delivered on each call
• 100 calls @ 3-minutes average = 300 minutes with 2 texts and 1 email on each call
• TOTAL: $400

Pay-As-You-Go Pricing

Pay-as-you-go pricing works a lot like a prepaid mobile phone. You add a “credit” to your account, and then each time you receive a call, funds are deducted from your balance. This requires money up front, but it is different than some answering service economy plans where you pay a base rate to keep the line open and active, plus a fee per-call or per-minute. Generally, the fee for each call or minute is inversely correlated to the amount of credit you add to your account. The more credit you add, the less individual transactions will cost.

Typical Pricing: Providers have tiered amounts of credit that you can add, e.g., $20, $50, $100. Depending on how much you prepay, the actual amount deducted for each call or minute will vary.

Overages: Be sure to read the fine print, and ask a few questions: Will the account be automatically replenished each month or once you reach a certain level of remaining credit? Does any unused monthly balance roll over to the next month, or is it a use-it-or-lose-it policy? What about line charges or costs for message delivery? It is important to do your homework to avoid any surprise fees.

Expected Add-On Fees: Pay-as-you-go service is strictly a message service, and advanced features will not be offered.

Usage Case:

• $150 credit
• $1.00 per call
• $0.50 for each message delivered on each call
• 2 texts and 1 email on each call
• TOTAL: 60 calls if balance can zero out; 52 calls if you are required to maintain a $20 credit

Benefits & Downfalls

If you aren’t sure which pricing model is the right fit for your needs, then peruse the table below for an at-a-glance view of the benefits and downfalls of each model. That should help you narrow things down.

Ideal For

• Per-Call: Businesses that tend to have lengthy calls
• Per-Minute: Fits most businesses regardless of call volume
• Flat-Rate: Businesses that have around the same number of calls each month
• Pay-As-You-Go: Businesses that are new, unsure of expected usage, or have a limited budget

Benefit

• Per-Call: Call length is not a factor. So, a call could last 10 minutes, and you would only incur 1 call count. If you stay within your call allotment, your bill will be relatively the same each month.
• Per-Minute: Billed in short intervals. So, wrong numbers, hang ups, etc. will not accrue much usage. If you stay within your minute allotment, your bill will be relatively the same each month.
• Flat-Rate: If you stay within your plan allotment or you have a truly flat-rate plan, your bill will be the same each month.
• Pay-As-You-Go: You don’t have to keep tabs on usage or worry about call volume. This allows you to stay within a budget that you can afford.

Downfall

• Per-Call: If your call center charges for short calls such as wrong numbers, hang ups, prank calls, etc., then each of these will count towards your usage, even if they only last a few seconds.
• Per-Minute: Sudden spikes in call volume can push you past your allotted minutes, resulting in significant overage charges. At the same time, if you don’t use all your minutes, you could be wasting money.
• Flat-Rate: If you exceed your plan, you may be upgraded to the next plan rather than paying for each overage. This could wind up costing you a lot more than you anticipated.
• Pay-As-You-Go: If the account is automatically replenished when the balance is low, and the payment method on file is not viable, your line may be disabled.

Service Tips

• Per-Call: Add your land line or cell phone number to the National Do Not Call Registry. Stop robocalls by adding an IVR to your line, which requires callers to press a number to reach an agent.
• Per-Minute: Look for a service that gives you on-demand access to your usage or the ability to adjust your rate plan within the current billing cycle.
• Flat-Rate: Track your call volume before choosing a service. This will help to determine the correct plan and eliminate any surprises on your bill.
• Pay-As-You-Go: Keep your credit account in good standing, and remember to update payment information if your card number or expiration date changes.

The Value in Cost-Effective Design

Every good business owner is concerned with the bottom line. So, when you reach the point where you’re ready to outsource, construct your call center services to meet your needs without breaking the bank. Depending on which pricing model you select, there are always ways to reduce costs.

• Keep your call script simple. The fewer questions the operators have to ask, the less time they’ll be on the call.
• Limit the number of on-call contacts, and opt not to leave a voicemail on unsuccessful attempts.
• If you have multiple employees who need to receive messages, set up a distribution group email. That way, you will only be charged for one message.
• Request a weekly call report rather than a daily account.
• Monitor your call volume, and adjust your plan as necessary to ensure that you are not paying too many overage charges or paying for calls or time that you aren’t using.
• Forward your calls after-hours rather than 24 hours.
• Set your line so that it rings a few times before forwarding. It will only roll over to the service if you are not able to answer.
• Add a frontend IVR to your line to eliminate automated calls.
• Circumvent programming charges by looking for a service that will give you the ability to make your own scripting or on-call schedule changes.
• If you have a strict monthly budget, review your usage regularly, and unforward your calls when you’ve reached your limit.
• Save time by not having the operators verify the information they are gathering from your callers.
• Reduce call counts, call time, or line charges by utilizing a cold transfer instead of a warm transfer.
• For appointments, have operators schedule but only take messages for canceling or rescheduling.
• If you are using a service for after-hours emergencies, include language in your upfront greeting letting callers know that the line is for emergencies only, and all other callers should contact the office during business hours.

Standard Fees & Up-Charges

Certain fees are common in the call center world, e.g., paying for toll-free numbers, sub account rates, programming costs, and auto attendant fees. While your provider should be transparent about pricing from the get-go, it would behoove you to do your homework before you become an active client. In other words, read the fine print.

Here is a list of potential fees that you’ll want to explore for any call center on your short list. Aside from a Set-Up Fee, which most services will charge, the items listed below may or may not be included with your plan, and thus, may result in additional fees.

* Per-call or per-minute rates may increase after-hours.
** Line charges may be billed annually, semi-annually, or monthly, as opposed to a one-time fee.

Buyer Beware

Beware of ultra-low-cost plans – anything under $0.70. If you aren’t a high-volume customer (which would warrant a low rate), then here are a few things to keep in mind:

• The service might be as low-quality as the cost of the plan, and they may offer flexible rates because they are desperate for business.
• It might be a small service (e.g., run out of someone’s home) or a service that is not scalable or able to handle your call volume.
• Calls may be outsourced overseas, which is cheaper for the call center, but not necessarily the right fit for you.
• You may be charged a hefty sum for every account action. For example, if you sign up for a plan that says it’s a $15.00 flat rate but you are paying $2.00 per minute, then the plan is not nearly as economical as you thought.
• There may not be a direct contact person, account representative, or support team whom you can call for assistance with changes or if any issues arise.

Billing Considerations

If you are taking advantage of a free trial, then your answering service should not require any billing information until after the trial period ends, and you become an active client. At that point, you’ll submit a billing authorization, and the customer support or accounting department will explain the invoicing process so that you have a solid understanding of how you will be charged going forward. When it comes to billing, there are few questions to ask.

Is there a contract?

Many services offer month-to-month billing, so there is no need to sign up for a specific, contracted length of time. If your provider requires a contract, read it carefully, and be aware of the ramifications should you need to cancel service.

What are the payment terms?

This one can be a little tricky. Let’s say that you sign up for a service advertising a low monthly cost. Depending on the payment terms, that cost may not be as low as you think. Here’s what we mean by that. If your premium is $20 per billing cycle (typically thought of as a month), and your service has 28-day terms, then you will receive 13 invoices annually. Therefore, you’ll pay for a full month more than you had anticipated. The moral of the story is, ask about the payment terms before you move ahead.

What if I go over my minutes / calls?

Depending on the service provider, exceeding the usage threshold for your selected plan may result in an upgrade to the next most cost-effective plan. For example, if a 100-call plan is cost-effective to 150 calls, and you exceed 150 calls, you may be automatically bumped up to save you money. Other providers may simply calculate your overages based on the quoted rate for your plan, which could end up costing you more than a plan upgrade.

Can I switch plans?

If your need for call center services is seasonal, such as with landscapers, tax accountants, roofing contractors, or pledge drives, there will be peaks and valleys in your call volume. Look for a service that will allow you to downgrade plans during slow months. Seasonal businesses aren’t the only ones whose call volume may vary, though. In any given month, if it appears that your usage is considerably lower than your plan allows, ask if your provider will allow you to downgrade your plan within the billing cycle to save you money.

Cancellation Process

And last, but not least, find out about the cancellation policy. Here are few key questions to ask:

• How many days’ notice is required to cancel?
• If you are month-to-month and you cancel in the middle of a billing cycle, are there cancellation penalties, or will you receive a prorated credit for unused funds?
• If you are under contract, what happens if you discontinue service prematurely?
• If you pay for your plan’s base rate in advance, will the next month’s base rate be refunded upon cancellation?

Ideally, your answering service will continuously meet or exceed your expectations, and you won’t want or need to cancel your account. However, it’s better to be informed just in case things don’t go as anticipated.

Conclusion

No matter what type of call center services you are in search of, you can be certain of one thing – research is the key to ensuring that you are getting everything you need at a price you can afford. While providers will often have similarities in their plans and billing approach, they will also have policies that are unique to their organization. Be sure to ask a ton of questions during the sales process, and clear up any questions you have about billing before you convert from a trial customer to an active client.

Nearly all the questions above should be plainly outlined in your call center’s Terms and Conditions, which, if we’re being honest, most people don’t read… So, take the time to go through those line-by-line. Spending a few minutes reviewing the terms at the start can save you from billing headaches down the road. And remember, you signed up for an answering service to make your life easier. Stay informed, and be proactive about tailoring the service to your needs. In turn, you’ll watch your business grow, one call at a time!

The post The Ultimate Answering Service Pricing Guide appeared first on Specialty Answering Service.

1. Being the lowest price in the market

While “low price equals high volume” is a fundamental economic theory, it is primarily applicable for non-differentiated commodities. In laymen’s terms, that means your offering can’t be differentiated from competitors’. In that scenario, you basically wouldn’t be in business. But if you are in business, then hear this: pricing low often creates multiple problems – it leads to a poor perception of quality in the customer’s mind, incites price wars with the competition, and sets the bar super low in terms of the value that you should be providing. So, unless you are a giant like Walmart, pricing low is best avoided. Instead, look for ways to add value to your offerings, and command premium prices.

2. Pricing high and not selling right

Though pricing low can be harmful, pricing high and not being able to communicate value to your customers is disastrous. If you are unable to demonstrate why your products and services warrant a fat price tag, customers will leave you and never come back.

3. Forgetting the message that price communicates

When small businesses price their offerings, they usually take into consideration the costs involved, their anticipated profits, and how the competition is pricing. But one thing that is often forgotten is the fact that pricing is a strong positioning tool. Ever heard of the psychology of pricing? When you price your product high, you are communicating a first-class image to the consumer. Thus, other elements of your brand should also communicate a consistent message:

• You need to have expensive packaging, and use premium channels to sell the product. Would a Tiffany’s ring have the same appeal in a plastic box at a kiosk? Um, no.
• You should have trained customer service professionals handling sales and service inquiries around the clock. If you stink at customer care, then patrons may hightail it to competitors just to avoid the hassle.

These elements will help you command a good market share even when your prices are high. After all, not all customers are price-sensitive, and price-sensitive customers are generally willing to pay for value.

4. Not considering all costs

Small businesses may neglect to add up all of their expenses before pricing their products. This is especially true for traders who buy in bulk. If you buy a product for $2 and sell for $5, you have a gross margin of $3. However, if you didn’t account for costs (e.g. rent, payroll, insurance, etc.) when you decided on pricing, then your net margin may be negative. This blunder will quickly run your business into the ground. Go back to Part 3 and make a running list of your expenditures (download an expenditures worksheet here).

5. Wrong timing and payment models

Research has shown that people are more likely to use a product when they have recently paid for it as opposed to when it was paid for in the distant past. A typical example is a gym membership. A member who pays on a monthly basis is more likely to use the gym regularly, whereas someone who paid at the beginning of the year may ditch the elliptical machine for a bag of Cheetos and a Game of Thrones marathon. Small businesses, in an eagerness to make the sale and get more cash up front, try to sign customers up long-term. But those people are least likely to renew their purchase. In short, charge your customers using a monthly subscription fee. That way, the value received is proportional to the price paid.

6. Wrong discounting strategy

Discounting is a very powerful pricing tool, but it is a double-edged sword, and small businesses often go wrong with their discounting strategy. If you have a bunch of regular customers, suddenly offering a discount to newcomers may cause dissatisfaction in the minds of people who purchased earlier. No one wants to miss out on a good deal. Therefore, instead of offering discounts for all purchases, tie it up with loyalty, or offer discounts for a differentiated offering. For example, you could offer a 10% discount for customers who purchase a second time in your store. Or you could bundle 2 products, and offer a combination deal.

Ultimately, maximizing your profits comes down to pricing things just right based on your particular situation – and you probably won’t perfect it on the first try. Heck, if pricing were easy, we wouldn’t have needed 4 separate blogs to explain it! That being said, the greatest challenge for the small business owner is identifying why customers should shell out their hard-earned bucks for your products or services and convincing them it’ll be worth their while. Developing the ultimate pricing strategy takes time.

The post Small Business Pricing to Win, Part 4: 6 Mistakes to Avoid appeared first on Specialty Answering Service.

When it comes to pricing, there is no one-size-fits-all formula. In fact, within your own business, you may price the same product differently based on the time of day, the geography, or the particular sales channel being utilized. You may even price differently based on the weather – seasonal fruits are a typical example of this.

Many small businesses make the mistake of pricing too low in an attempt to attract sales volume, but this can lead to cash flow issues. On the flip side, if you set prices too high, then your potential customers may look elsewhere, especially if you are in a market where there is serious competition from big players. So what is the right price?

What is the Right Price?

The right price should ideally fall between the costs you have incurred and the way consumers value your product. The value you provide must outweigh your expenditures. Costs can be direct and indirect, ranging from the cost of creating and marketing your product, to overhead expenses, such as telephone charges, utilities costs, employee salaries, etc. And they will quickly add up. So, in order to command a premium price, your product alone isn’t enough. Provide value-added products or services, and learn to effectively communicate this value to your customer.

We’ve boiled the process down to 7 steps to help you determine the right price:

1. Calculate the total cost of your product, including all direct and indirect expenses. To help, we’ve created an expenditures worksheet you can download here. This is your base price.
2. Decide on the minimum profit margin that you want from your business, and don’t set minimum profit expectations too high! Add that to your base price to arrive at your minimum selling price.
3. Now unless you are selling a completely innovative product/service, pricing is best determined by the marketplace. Look at how much the competition is charging for similar products/services. If your base price is higher than the competition’s market price, you’ll need to reexamine your costs, and do a cost cutting exercise.
4. Let’s assume that the competition’s prices are much higher than your base price. The highest price that any competitor is charging can be your ceiling price. Also, identify which competitor is the market leader in the geographic area where you plan to sell your products and what they are charging. This will form your most viable price.
5. If your minimum selling price is lower than the most viable price, then you can charge slightly lower than the most viable price and still garner market share. Of course, your product offering and communication of value to customers (marketing) will have to be stronger than the market leader. You will also need to differentiate your offering in some way that makes it difficult for the competition to replicate. For example, if you are selling homemade pizzas, why not use organic, locally-sourced ingredients, and highlight that to your prospective customers? This, along with the right price, may be difficult for large pizza chains to replicate.
6. If your minimum selling price is higher than the most viable price, then you should consider pricing even higher than the ceiling price. This would require you to position your offering as the most premium service in the marketplace, and you will need to deliver on that promise. Small businesses may find this difficult to achieve, unless you are a niche player such as a wedding photographer or a wedding dress maker. Customers do not mind paying for exclusivity on special occasions. If you are in that market, then high quality products and customer care, along with the high prices to match, would make you a winner.
7. Test and tweak. No matter what pricing approach you follow, not many entrepreneurs get it right on the first try. As a small business owner, try not to take on too many commitments in terms of raw materials or office space before you have arrived at the perfect mix of price and business strategy. You may need a few attempts to figure out your customers’ preferences and willingness to pay. Be open to experimenting with your pricing, especially in the early stages. Sam Walton tried multiple pricing models before he arrived at Walmart’s “Everyday low price” model.

If you’re struggling finding the perfect price, keep in mind that it is easier to lower prices than to raise them at a later stage. When in doubt, always price higher, and aim to offer more value than your price deserves. If higher prices aren’t working, it’s time to change your prices.

When Should You Change Your Prices?

Knowing when to raise or lower prices is just as important as pricing right in the first place.

Raising: You may raise prices when you offer additional benefits for customers, but remember that not every product feature will translate into an additional benefit. You could increase pricing when your own costs have increased, such as in high-inflation markets when raw material costs are climbing. Pricing can also be upped during peak demand or when your offering is unique. If you are going to raise prices, then give customers a heads up, and explain your rationale.

Lowering: Prices can be lowered if you are entering a new market to increase trials or if a new competitor is in the game and trying to take away your clients with lower prices. If it’s the latter, then a smarter strategy is to explain to clients why they are better off with you, even if they are paying a premium.

The final post in this series will focus on common pricing pitfalls that small businesses encounter and how you can avoid them.

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The reality is, there’s often a lack of understanding of the external (market-based) and internal (organization-based) factors that determine pricing. Lucky for you, we’ve included an overview below.

Internal Factors: There are several organization-based factors that impact pricing. These can be broadly classified as strategy-based and cost-based.

Strategy-Based Factors

Most small businesses do not have a well laid out strategy, so it is essential to spend some time finalizing your Vision (guiding principle) and Mission (the main purpose of being in business). These essential elements are the starting point of your strategy, on which pricing is heavily dependent. Here are 3 key aspects you should know about:

1. Business Objective: If your business objective is to gain market share with a new product, then you may want to price lower than the competition to win over prospective customers. If your business objective is to maximize profits with every sale, even if it means selling at a lower volume, then you would set prices higher.
2. Target Client Segments: Your target client segments and their capacity to pay are also key determinants of price.
3. Product Positioning/Image: A good pricing model requires careful consideration of the image you want to convey to customers. Are you dealing with commodities or premium goods? Premium positioning should be accompanied by premium pricing. Even if you can`t position your product at the highest premium, you need to differentiate your offering from that of your competitors.

Cost-Based Factors

While it is ambitious to aim for premium pricing for your products, small businesses often struggle to convince clients to pay more for their services. A good starting point for pricing is to take cost-based factors into consideration and start off with a cost-plus margin model. Once your business is established, you can bring out value-added versions at premium prices. Here is a list of costs that should be considered while arriving at your price:

1. Production Cost: It is critical to know what it costs for you to manufacture/source your product. You should also be able to work out which of these costs are fixed and which are variable. For example, if a high proportion of your costs are fixed, then you may not have much flexibility to reduce prices and boost sales. On the other hand, if your production cost falls significantly with volume, then pricing lower will allow you to increase sales while still generating profit.
2. Channels of Distribution Costs: Over and above production costs, you will have distribution channel costs. For example, if you have a physical store as well as a website through which you sell your products, then the costs involved in both cases would be different, and this would need to be factored into the pricing decision.
3. Sales & Marketing Costs: Sales and marketing costs also affect pricing. These expenditures vary depending on the geography, channel and customer base that you are handling. It may be more cost-effective to sell to an existing customer than to a new one. That is why most savvy businesses offer discounts to loyal customers. They are essentially passing on the savings in sales and marketing costs to the buyer.

External Factors: Two key external factors that influence pricing are competition and the business’s operating geography.

Competition

What is the competition up to? It’s important to look into how your competitors are doing business, as this will most certainly influence your pricing strategy. You’ll want to do market research to identify the competition and what they are charging. You can even put on your best cloak and dagger routine and mystery shop! Go to their stores, visit their websites, and gather vital intel into their sales processes. The more you know about what competitors are showcasing, the better you can fine-tune how to differentiate your offering, and price your products and services to sell.

Geography

The area that you are operating in will also influence how you price. Labor and related costs, customer affluence, and the presence of competition vary with geography. So, get a handle on your area’s demographics, and figure out how your pricing strategy will reflect those nuances.

Small business owners don’t always realize how significantly pricing strategy affects cash flow. Nevertheless, it is important to appreciate the price-volume trade off and its subsequent impact on business financials. Businesses need to integrate their pricing approach into their financial model, and do sufficient analysis to gauge the consequences of any pricing decision before implementing it.

In our next post, we’ll break down how to arrive at the right price for your product or service through an easy 7-step process.

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Pricing impacts, and is impacted by, every business activity from hiring to sales. Economic theory says that supply and demand define price, but what do economists know anyway? Whatever is going on in the market, businesses that work hard to make their products and services more attractive to consumers will increase demand, and in turn, command a premium price tag.

Despite its importance in business success, many small business owners struggle to price their products right. In fact, this topic is so ginormous that even the basics can’t be covered in a single post. So, we’ll be looking at pricing strategies for small businesses as a 4-part series where we’ll be reviewing everything from pricing strategies to external vs. internal factors to common mistakes.

In Part 1 of the series, we’ll discuss the ideal use case and the pitfalls of the 5 most popular pricing strategies for small businesses: value-based pricing, the lowest-price model, the cost-plus model, pay what you want, and dynamic pricing.

#1: Value-Based Pricing

This strategy is based on the question, “How much is the customer willing to pay?” Value-based pricing is a customer-centric approach and often allows you to charge much higher prices by showcasing the value that your product or service brings to the table. One of the biggest advantages of this strategy is that you will be able to enhance your gross margins significantly.

Ideal for: Situations where the value for customers is much higher than the cost of production. This is not suitable for commodity products or services.

Pitfalls: Unless you know exactly what the customer is willing to pay, or the cost of available alternatives, pricing will never be perfect.

#2: Lowest-Price Model

It’s pretty self-explanatory. You offer the price that is the lowest in the market. The advantage here is that pricing is very clear, and you can attract price-sensitive consumers.

Ideal for: Commodities, or if you have substantial cost advantages over your competition.

Pitfalls: Typically, the lowest price model is not suitable for small businesses. It can negatively impact the perception of quality and lead to pricing wars with competitors. Not only that, but for the uber price-conscious, you can bet they’ll switch as soon as they find something cheaper.

#3: Cost-Plus Model

In this model, you determine the total cost of producing, distributing, and selling your product. This is the break-even point where there is no profit or loss. Then, based on your targeted profit, a markup is added to the price. For example, if the break-even point is $5 (cost) and you need a 20% margin ($1), then you price the product at $6.

Ideal for: Determining the rack rate over which discounts and offers can be provided.

Pitfalls: Most small businesses do not consider all costs involved while arriving at the break-even price. And if your pricing is too high and you cannot justify value, then customers may not be willing to pay what you are charging, especially if the competition is offering a lower price.

#4: Pay What You Want

The basic premise here is similar to value-based pricing, except now the customer has control over how much they want to pay you for your offering. In some cases, a floor price may be set as guidance for the buyer. This model was not popular earlier, but is now becoming more and more common. As the Internet allows for faster price discovery, customers are able to readily see how much your competition charges for similar services and what other buyers are paying.

Ideal for: Social or charitable enterprises that appeal to the conscience of the buyer.

Pitfalls: This is not suitable for a Business-to-Business sales model where the buyer has a specific budget earmarked for purchase.

#5: Dynamic Pricing

This is a flexible pricing mechanism where the pricing varies with some factor such as time or demand. When demand peaks, the price also increases. In order to effectively implement dynamic pricing, you should have near real-time data available for whatever you are selling. If your offering is in a price-sensitive market, you need to constantly monitor competitors’ pricing and adjust your numbers accordingly. A variation of dynamic pricing is price discrimination, where the same product is charged differently for different customer segments, e.g. based on geography, age, etc.

Ideal for: Situations where your inventory is perishable, e.g. airline or theater tickets; Internet-based sales where traffic data can be easily monitored and measured.

Pitfalls: In a dynamic pricing scenario, customers are likely to postpone purchasing to wait for a better deal.

If the Top 5 Strategies Don’t Work, How About 7 Others?

The top 5 strategies will generally fit for most small businesses, but if none of the options above seem appropriate for your needs, read on. These pricing methods focus exclusively on winning market share:

• Decoy Pricing: The price of one product is kept high to boost the sales of the lower priced product.
• Loss-Leader Pricing: One product is sold at a loss in order to win the customer and boost sales of other products.
• Penetration Pricing: You set the price low in order to garner market share, and then raise prices later.

And that’s not all! There are pricing models such as:

• Relationship Pricing: Businesses use long-term contracts and price bundling (combining products or services to increase value) that are perceived as beneficial to consumers. Thus, they are encouraged to maintain lasting business relationships.
• Psychological Pricing: Prices are listed as slightly below their cost, which looks better to consumers and maximizes revenue, e.g. pricing something as $4.99 instead of $5, or $99 instead of $100.
• Freemium: Consumers get basic features at no cost and can access advanced features, products or services for a fee.

And who could forget:

• Skimming: Usually used at the launch of a new product or after it has exhausted its usefulness, skimming targets consumers who are willing to pay a premium and helps companies gain market share.

So how do you decide which will work best for your business? There is no really good answer here. The bottom line is, it takes time and research to get it right. But if you decide on things willy-nilly and you get it wrong, it could prove to be a costly mistake, or worse yet, the end of your small business. Don’t let that happen to you!

In our next post, we’ll look at factors that determine pricing, including internal factors such as strategy-based and cost-based factors, and external factors such as competition and geography. Stay tuned!

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