What is an answering service?

An answering service is a company that answers your business phone when you cannot, greets the caller in your business name, finds out what they want, and passes it on to you. That is the whole idea. What is an answering service in practice: somebody, or something, picking up on the fourth ring at seven in the evening so the caller does not dial the next company on the list.

The confusing part is that the same phrase is used for four quite different products at wildly different prices. This guide lays out what each one is, what it actually costs, how the billing works, and what none of them will do for you. Every price here comes from a provider's own published pricing page, checked on the date given.

What an answering service does day to day

You point your business number at the service, either all the time or only when you do not pick up. From then on, the calls you miss get answered by somebody working from notes you gave them: your business name, your services, your hours, and what to do with different kinds of call.

• Answers in your business name, so the caller does not know they reached a third party.
• Takes the caller's name, number, and the reason they rang.
• Puts urgent calls through to your phone, if you asked for that.
• Books an appointment or agrees a time, on the better plans.
• Answers simple questions you have written answers for, like your hours or your service area.
• Sends you the details, usually by email, sometimes into an app.

The caller experience is meant to be unremarkable. They ring your number, a voice answers with your business name, they explain the problem, and they hang up believing they spoke to your office. Whether they actually did depends on which of the four kinds you bought.

The four things sold as an answering service

Nobody in this market agrees on the words, so compare what the product does rather than what it is called. The four shapes below cover almost everything on offer, and the prices are what these providers publish for themselves.

A live answering service

Real people in a call center, working from your script, usually taking a message and relaying it. This is the oldest version and still the most expensive. Ruby publishes $250 a month for 50 minutes, rising to $1,725 a month for 500 minutes. AnswerConnect's entry plan is $350 a month for 200 minutes with a $49.99 setup fee, then $2.50 for every extra minute. Smith.ai starts at $300 a month for 30 calls and charges $11.50 for each call past the allowance.

A virtual receptionist

The same idea sold as a fuller service: the person does not only take a message, they screen calls, transfer them live, and book appointments. Posh prices this by receptionist minutes, from $65 a month with no minutes included at $2.30 a minute, through $215 a month for 100 minutes, up to $1,900 for 1,000. In practice many providers use the two names for the same product, so read the plan rather than the label. There is more in our guide on what a virtual receptionist is.

An automated phone menu

Press one for sales, press two for service. It is usually an add-on to a phone service rather than a purchase of its own, and it is priced like one: ReceptionHQ lists one from $10 a month alongside its answering plans. It is also not really an answering service. Nobody hears what the caller wanted, and a customer with a burst pipe does not want a menu.

An AI receptionist, the fourth kind

Software that talks to the caller, answers questions from what you told it, and books work. It is the cheapest of the four by a wide margin. Rosie publishes $49 a month for 250 minutes. RingCentral publishes $49 a month for 100 minutes. Smith.ai's software option is $150 a month at $2.00 a call, against $300 a month for its people. EveryDial sits here too, at $49 a month for 100 minutes or $149 for 400.

How the billing actually works

This is the part that catches people out, and it is missing from nearly every explainer on the subject. The headline price tells you very little on its own. What matters is the unit you are billed in.

• Per minute. You buy a block of minutes and pay a rate for anything past it. AnswerConnect, for example, charges $2.50 for each minute past its 200-minute plan. A chatty caller costs you more than a brief one, and a wrong number still costs something.
• Per call. You buy a number of calls. Simple to predict, until you notice that a thirty-second wrong number costs the same as a ten-minute booking.
• Per message. You only pay when a message is actually taken. Cheaper on paper, and it means the service has a reason to take a message rather than solve the call.
• Flat monthly with an allowance. A fixed fee that includes a set number of minutes or calls, then a published rate past that. Easiest to budget for, as long as the overage rate is published.

Two lines of small print decide your real bill, and they sit under the plans where nobody reads them. First, how is a part-minute counted? AnswerConnect prints that every interaction is rounded up to the nearest minute, so ninety-second calls bill as two minutes each. Second, what counts as billable time? Both AnswerConnect and Posh say in writing that they bill the time spent handling your call, including the write-up afterwards, not just the talking. That is why a three-minute call is not a three-minute charge.

There is a third question worth asking, because the answer varies: do spam calls get billed? Smith.ai states that you are not charged for spam or unsolicited sales calls, as long as your forwarded line passes caller ID. AnswerConnect takes a different route to the same place, waiving the first 30 interactions under 30 seconds each billing cycle. Several others print nothing on the subject. If it is not on the rate card, ask before you sign, because robocalls are somebody's minutes.

Against hiring somebody instead

Every provider makes this comparison and every one of them wins it, which should tell you something about how it is framed. Smith.ai puts a version of it on its own pricing page: even its $2,100 a month plan is, it says, about $33,000 less than a full-time receptionist's yearly salary.

The number is probably fair. The comparison is not quite, because they are different purchases. A person handles the awkward call, chases the supplier, and remembers the customer who rang last spring. An answering service picks up the phone. If your problem is that nobody runs the office, no plan on this page fixes it. If your problem is that the phone rings while you are on a ladder, hiring someone is a very expensive way to solve it.

Who actually uses one

Broader than most people expect. Medical and dental practices use them for patient calls and after-hours triage. Law firms use them to qualify enquiries before a lawyer's time gets spent. Property managers use them for tenant emergencies at night. Retailers use them through busy seasons, and small e-commerce businesses use them as the only phone presence they have.

Trade businesses are on every one of those lists too, usually near the bottom, and they are the odd one out. Plumbers, electricians, roofers, painters and cleaners cannot answer while working, and a missed call is a job that goes to whoever picks up next. That is a different problem from an office wanting fewer interruptions, and it is worth checking that whoever you buy from understands the difference.

What an answering service will not do

Most pages on this subject are a list of benefits. Here is the other side, because it decides whether this fixes your problem or just moves it.

• It will not know your work in depth. Anything past the answers you wrote down gets a promise that somebody will call back.
• It will not sell for you. Answering services handle calls coming in, not calls going out.
• It will not rescue an angry customer. That needs somebody with the authority to fix the problem, which means you.
• It will not chase the job afterwards. Once the message reaches you, following up is yours.
• On most plans it will not agree a time. It writes down that somebody rang, and you do the scheduling later.

Answering service, virtual receptionist, or call center

The three terms overlap so much that vendor pages contradict each other, so use the size of the job as the test. An answering service handles your inbound calls with your script. A virtual receptionist does that plus screening, transferring and booking. A call center handles high volumes for large operations, with people following the same script for hundreds of calls a day, and it is almost always the wrong shape for a small business.

The distinction that actually changes your day is none of those three. It is whether the service agrees a time with the caller or only takes a message. A message means you still make every callback. An agreed time means the work is booked before you read anything. When you compare plans, that is the line to shop on.

Do you need one?

Answer it with your call log rather than with a sales page. Pull last month's calls and count two numbers: how many came in that nobody answered, and how many of those came from a number you had never seen before. The second number is the one that matters, because those are the people who were trying to hire you and are now somebody else's customer.

If that number is zero, you do not need an answering service yet. If it is two or three a week and your average job is worth a few hundred dollars, the phone is already costing you more than any of the four options above. Trade businesses in particular tend to find the missed calls cluster outside open hours, which is why after-hours cover is usually the first thing worth buying rather than round-the-clock cover.

Whichever you pick, ask for the three numbers before you sign: the monthly price, what it includes, and the rate for going over. Any provider that will give you all three in writing is already unusual in this market.