The Cost-Effective Case for Answering Services vs. Full-Time Receptionists

Why pay $1.39/min for a virtual receptionist over a full-time employee? Because, with rare exception Answering services cost substantially less. Here’s why:

In today’s dynamic business world, every penny counts. Small businesses and even large corporations are always on the lookout for cost-effective solutions to maximize productivity while minimizing expenses. One of the key areas where businesses can find significant savings is by rethinking how they handle their phone calls. Enter the debate of hiring a full-time receptionist versus using an answering service.

Understanding the Costs: Receptionist vs. Virtual Receptionist

• Full-time Receptionist: A receptionist earning $500 a week equates to $2000+ a month. This doesn’t include the additional costs associated with taxes and employee benefits which can add up significantly.
• Virtual Receptionist: On the other hand, let’s break down the cost of an answering service that charges $1.39 a minute. If a typical business receives about 400 calls monthly (assuming 100 calls weekly) and each call lasts about 1.5 minutes, you would only need the service for approximately 600 minutes a month. This sums up to $834 a month. That’s a clear savings of $1166 every month when compared to the cost of a full-time receptionist.

The Real-World Scenario

In reality, the average business call lasts about 1.5 minutes. But even if we were to double that estimation, and assume each call lasted three minutes, the monthly cost would be $1668. This still presents a monthly savings of $332.

Where the Savings Get Even Better

For businesses with lower call volumes, the savings can be even more dramatic. Let’s take a company that receives only 25 calls weekly, or 100 calls monthly. With an average call duration of 1.5 minutes, they would need only about 150 minutes a month from the answering service. This translates to a mere $208.50 a month. In contrast, a full-time receptionist would cost them a staggering $2000, excluding taxes and benefits. The difference is quite evident!

Capturing Sales: The Real Value of a Virtual Receptionist

Beyond the evident cost savings, there’s an even more critical factor to consider: missed opportunities. Every call that goes unanswered, or worse, goes to voicemail and gets no response, is a potential sale lost.

Consider this scenario: You use the answering service for 100 minutes a month, costing you $139. With an average call duration of 1.5 minutes, that’s about 66 calls. If just 10% of these calls lead to a sales inquiry, that’s 6 potential leads. If only a third of those leads convert into sales, that’s two additional sales monthly.

Scenario 1: Roofers ROI

To contextualize this, think of industries where each sale can bring in substantial revenue. In the roofing industry, for instance, capturing just 6 leads that result in 2 sales could mean an average revenue of $16,000. When compared to a $139 monthly investment in an answering service, the ROI is undeniable.

To calculate the ROI (Return on Investment):

ROI = (Net Profit / Cost of Investment) x 100

Net Profit = Total Sales – Cost of Investment Net Profit = $16000 – $139 Net Profit = $15861

ROI = ($15861 / $139) x 100 ROI = 114.11 x 100 ROI = 11411%

The ROI on a $139 investment that generates $16000 in sales is 11,411%.

Scenario 2: Chiropractors ROI

Consider a chiropractor who outsources 200 calls monthly to an answering service, costing $278 at $1.39 a minute. Now, imagine if 10% of these answered calls, which might have otherwise gone to voicemail after hours, generated leads. This totals 20 leads. If 15% of these leads convert into new customers, that’s 4 new clients. Assuming each new client spends an average of $75 monthly, the chiropractor earns $300, offsetting the $278 cost of the service. Moreover, consider that 50% of these clients become regulars for at least 6 months. This recurring revenue, at $150 monthly, amounts to an additional $900 over six months. So, for an initial $278 investment in the answering service, the chiropractor potentially gains $1200 in revenue.

To calculate the ROI (Return on Investment):

ROI = (Net Profit / Cost of Investment) x 100

Net Profit = Total Sales – Cost of Investment Net Profit = $1200 – $278 Net Profit = $922

ROI = ($922 / $278) x 100 ROI = 3.32 x 100 ROI = 332%

The ROI on a $278 investment that generates $1200 in sales is 332%.

Try an Answering Service For Free

Switching to a virtual answering service is not just about cost savings, but also about maximizing opportunities and ensuring no call (or potential sale) gets missed. In a world where customer service is paramount, ensuring every call is answered professionally can be the difference between business growth and stagnation. It’s time to rethink your phone answering strategy! Most virtual receptionist services will allow you to try it out for one week at no cost, so you have nothing to lose, and everything to gain.