Are Answering Services by the Minute or by the Unit Better?

Posted by on May 5, 2016 in Answering Services

Phone answering service plans are generally billed in one of two ways: Minutes or Units. Which method is more advantageous for your company to use?

An image of scales weighing whether minutes based or units based answering services are better

In the world of answering services, you’ll usually find that all providers offer plans that bill by the minute or by the unit. It’s important to know the difference between the two and how they each work when you’re trying to find the best answering service vendor to work with. The more you know, the better off you’ll be, so let’s dive into each of these answering service billing options.

Minutes Billing

As you might have guessed, minutes billing is a time-based structure. You pay for the time answering service agents spend on the phone with your callers. Call centers who choose to use a minutes billing system do so to cover labor costs effectively while maintaining their margins for calls that take longer than a minute or two to process. So a minutes-based answering service is a simple, fair way for them to run their business. Minutes billing also provides several advantages for customers.

  • Only pay for what you use: since you’re billed by the amount of time an answering service spends taking care of your callers, you should never get over-billed assuming you use an answering service that has a reasonable per minute rate and no hidden fees.
  • Won’t lose money on short calls: wrong numbers, hang ups, and the like happen. When they do, you won’t get charged for a full minute of usage. You’ll either be charged a fraction of your per minute rate, or some answering services won’t even bill you for short calls of that nature if they fail to reach a predetermined threshold like 5-10 seconds.
  • Ability to manage your call durations and get even better value: a good minutes-based answering service will give you access to all kinds of reports. You’ll be able to look at your average call durations (among many other things) and work with your answering service to do things like revise your script to whittle down some call times and ultimately reduce your bill.

The one thing prospective answering service customers sometimes worry about is that agents will stay on the line with callers longer than necessary to inflate their bill. Here’s the thing about that, in the history of answering services, yes, there have been a handful of vendors that did that. But they were caught and are no longer in existence. That kind of dishonest business practice is not the norm and providers who stoop to those levels don’t last long. It’s unlikely, but if you are suspicious that an answering service really is jacking up your call durations to bill you more, test them with some calls of your own and keep a close eye on your usage reports.

Units Billing

Sometimes referred to as “per call” billing, units-based billing charges you a flat rate per action. An action can be something other than taking a call. An action can also be a message sent out, a call transferred, an appointment scheduled, a line forwarding verification call, etc. Each one of those things can count as a unit within a unit billing structured answering service. So while that rate per unit might look friendly initially, keep in mind that you might get charged for multiple units each time someone reaches your answering service. Always find out from answering services who charge by the unit everything that constitutes as a unit before you sign up.

Here’s a couple of advantages to units billing:

  • Every call is charged at a flat rate: whether your answering service handles a call that is 30 seconds or 5 minutes long, you are only billed for a single call. Now, as we discussed, that can actually be a bad thing if you get a lot of short calls, but if all your call durations tend to be longer in nature, then you can really get some good value from a units-based billing structure.
  • Minimal variation in your monthly bill: a lot of the time you can take a look at historical call volume over given time periods to anticipate what your bill will be, which makes forecasting and controlling your expenses easier. You can also do this with minutes billing, but it just takes an extra step or two.

At this point, when you’re shopping for an answering service, you’re more likely to come across vendors who use minutes billing. It has become more of an industry standard because in most cases it is best and most fair for both the provider and the customer. However, there are still plenty of answering services out there who use a units billing method. If your company gets a specific type and length of call regularly then you might be able to find some good value in a units-based answering service. The only trouble is if you’re getting a good deal, then they probably aren’t. And if you are a highly profitable account for them, you’re probably the one getting shafted.

So be careful when you’re shopping for an answering service, ask the right questions, and find the best provider that will do a good job for you.

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