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What’s a Virtual Answering Service, and How Does It Work?

Adam Uzialko
Adam Uzialko Staff
Apr 22, 2020

Have you ever wondered how a virtual answering service can help your small business? Learn more about answering services and call centers, what they have to offer, and how much they cost.

  • Virtual answering services can answer inbound calls, manage email communications, monitor social media and cover live webchats.
  • Small businesses can use answering services to augment their customer service or outsource it completely.
  • The cost of answering services varies depending on the complexity of service and typical call volume.

Answering services – also known as virtual receptionists, receptionist services and live receptionists – are a useful tool for small businesses that want to improve their customer service but can’t afford an in-house receptionist or customer service agent. Answering service companies range from the simple to the complex, and offer a range of services that can help small businesses manage calls, emails, social media and live web chat with ease.

What is a virtual answering service?

A virtual answering service offers businesses a way to outsource the answering of their phones. These services can be relatively simple, such as basic answering and message-taking, or they can be more complex, such as delivering complete customer service.

“Think of a virtual answering service as your offsite receptionist. They can answer phones, transfer important calls to you and even schedule new clients,” said Emily LaRusch, founder and CEO of Back Office Betties.

Virtual answering services are generally used by businesses that either cannot handle their incoming call volume or simply want to hire experienced customer service professionals to manage their incoming phone calls for them. In addition, many virtual answering services offer omnichannel support, such as email management, social media moderation and live web chat management.


Editor’s note: Looking for the right answering service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

How does a virtual answering service work?

Virtual answering services are relatively flexible and can be tailored to a business’s specific needs. In some cases, these needs are simple and straightforward, even to the point of being automated. In other cases, a dedicated agent might be required to carry out a guided conversation with callers.

“A virtual answering service is a cloud-based or online service in which calls directed to your number are picked up by an automated response or third-party operative to take messages, forward calls on, or otherwise handle your telephone communications,” said John Moss, CEO of English Blinds. “This can be as simple as a voice mailbox that receives messages from your callers that you can dial into later on, or a live, remote receptionist who answers calls using a greeting and business name you dictate in line with your prescribed protocols.”

Most call centers and answering services offer multiple services fielding inbound calls, including simple, automated options like the Interactive Voice Response (IVR) tree, which gives callers a menu of options to choose from to automatically direct their call. On the complex end of the spectrum, answering services can assign human agents to manage your account, becoming intimately familiar with your business and even selling on behalf of your company in some cases. Some even offer outbound calls to help drive sales and generate new leads.

Here’s a look at some common services provided by a virtual answering service:

  • Interactive voice response: An IVR tree is a common call routing tool that makes sure the call is delivered to the right contact without human intervention. These systems are usually the cheapest to implement and maintain because they don’t require an agent to answer the phone on behalf of your company. They simply ensure calls are delivered to the right person who works for your business.

  • Message taking: One of the most common services provided by an answering service is message taking. An agent answers a call, and captures the caller’s name, contact information, reason for calling and any other essential information your business requires. That information is forwarded to your business so someone could return the call when convenient.

  • Call forwarding: When a message might not be enough to address the caller’s needs, some answering services offer call forwarding. This service allows an agent to ascertain a caller’s needs and then direct the call to the right person who works for your business.

  • Appointment scheduling: For businesses that rely on appointment scheduling for meeting with clients, many answering services are able to access your preferred calendar tool and set appointments during available business hours. 
  • After hours or overflow answering: If you generally have your phone lines under control but need assistance during peak hours or after your business has closed for the day, a virtual answering service can be hired for those specific purposes as well. 
  • Frequently asked questions: A slightly more advanced service, some answering services answer a list of FAQs provided by your business. Agents can field these questions and assist callers on the fly rather than taking a message or forwarding every call. 
  • Order management: If you run an e-commerce store, an answering service agent can assist callers who need help placing their order. Agents walk through the purchase with the caller to make sure their order is properly received. Some answering services offer upselling and cross-selling services as well.

  • Customer service: On the more advanced end of the spectrum is full customer service outsourcing. This answering service typically requires a dedicated or semidedicated agents, because it requires familiarity with your business and industry. Customer service agents can perform the same tasks you’d expect of an in-house customer service agent, from answering questions to fielding complaints.

Some businesses only require one of these services, while others combine several of them. Answering services tend to be flexible, so if your needs change so too can your answering service.

What are the benefits of a virtual answering service?

The primary benefit of any answering service is that it takes pressure off a small business’s staff to manage the phone lines. This frees up resources for a small business to address more pressing, operational tasks without risking losing customers due to poor service.

“It means you never miss a business opportunity or important call, and maintain high professional standards,” said Alex Williams, website builder and owner of Hosting Data UK. “It’s a great tool to free up your time, which is vital for small businesses.”

For small businesses with limited resources, hiring an in-house customer service specialist might be cost-prohibitive. Outsourcing to a quality answering service, however, lends that same professionalism and attention to detail that an internal customer service agent would provide.

“These services allow small businesses to have a receptionist give personalized attention to small or variable call volumes without requiring the business to hire, train and manage a full-time employee, along with all the added expenses and burdens,” said Jason Junge, CEO of PointerTop.

“Small businesses should hire for required availability and scheduling; any specific skills or knowledge requirements; language, accent, and colloquialism requirements; pricing; maximum customer hold times and service quality; and client support quality,” Junge added.

In addition, a good answering service will be experienced in handling communications for businesses like yours. For example, there are legal answering services specifically for attorney’s offices and medical answering services just for healthcare businesses. Hiring experienced communications specialists ensures that your customers are in good hands while you focus on delivering great products and services.

Are there virtual answering service mobile applications?

Most answering services offer a client portal either on a web browser or via a mobile application. An answering service’s client portal typically offers insights into your business’s account, such as the the number of calls received, the average length of a call and the average answer time of the agents, for example. Some answering services offer more advanced client portals that allow clients to listen to recordings of all calls to guarantee quality service.

Client portals generally contain billing information updated in near real time as well, so you can keep track of how much you are likely to owe each month.

How much does a virtual answering service cost?

The cost of a virtual answering service can vary but is generally based on the complexity of services you require as well as your typical call volume. The pricing model an answering service charges can vary, but these are some of the most common:

  • Per-minute rate: Some answering services will charge a flat per-minute rate. For example, a company might charge 80 cents per minute for live answering. Your total bill would be influenced by your call volume that month.

  • Monthly subscription: Some answering services charge a monthly subscription, which includes a package of minutes applicable for all call center services. If you buy 1,000 minutes per month, for example, those minutes could then be used for multiple services, like message taking, FAQs and order management services. 
  • Per-hour rate: Usually reserved for services that require a dedicated agent, some answering services charge a per-hour rate instead of their per-minute rate for shared agents. Dedicated agents range in cost from $15 to $25 per hour, generally.

In addition to these rates, an answering service might charge any of the following fees or upcharges:

  • Setup fee: Setup fees are usually one-time charges to bring your account online or set up an IVR tree for your business. 
  • Holiday rates: Some answering services charge increased rates for holidays. Ask about these fees and what days the answering service considers a holiday. 
  • Agent work time: Agent work time is billable time that an agent is working on your account, whether they are connected to a caller or not. Some answering services do not charge for agent work time, while others do. Be sure to ask. 
  • Incremental billing: Some answering services bill second to second, meaning you are only charged for real time that an agent is connected to a caller. Others employ incremental billing, rounding up to the nearest increment to estimate your bill. The common increment is 6 seconds, because a 1-minute and 6-second call would appear as “1.1 minutes” on your bill. However, some answering services round up as high as the nearest minute, which could greatly inflate costs.

Will anyone know I’m using a virtual answering service?

A good virtual answering service will appear to answer the phones as a representative of your business. It should be no different than if you hired an in-house receptionist to answer phones and take messages on your behalf. Most answering services work with you to develop a script or preferred workflow during onboarding, and many make it easy to edit any scripts or steps directly through a client portal.

The ultimate goal of outsourcing communications to an answering service is to streamline caller communication with your business and increase the professionalism of your company. Any answering service that is worthwhile can accurately and effectively represent your brand on the phone, via email, on social media or on live web chat, whichever communication channels your brand requires. 

What are things to look out for when hiring an answering service?

Handing your customer service responsibilities over to a third party requires a significant amount of trust. You should thoroughly vet an answering service before signing any agreement. However, transparency and accountability remain key throughout the life of your relationship, so you should monitor the answering service’s performance regularly to ensure your callers are being treated as well as you would treat them yourself.

“It is not always possible to ensure that the virtual receptionist is communicating the right thing every time to every caller,” said Aggie Sienkiewicz, a content writer for Tidio. “Since that person does not work for your company directly, they do not know it that well. Thus, it may happen that the virtual agent may mispronounce your business or colleague’s name, mix up the names of your employees, or even take the messages incorrectly.”

To help prevent mix-ups like this, remain in close contact with your answering service partner to ensure they have all the information they need to deliver quality service. Moreover, to the greatest extent possible, you should monitor their performance to guarantee quality service. After all, an answering service will become a key component of your brand’s customer-facing operations; you can’t afford to overlook mediocre performance.

Further, Junge said, making sure a detailed agreement that lists expectations and obligations clearly can hold an answering service accountable and prevent unwanted surprises for the small business.

“Fully defining expectations upfront in a service level agreement will help the small business navigate problems and issues,” he said. “Common issues revolve around service levels, wait times, knowledge levels and time differences when the service is offshored.”

It is useful to ask the answering service to break down all costs and fees in an agreement as well; that way, you see exactly what you are paying for spelled out in black and white before you sign up.

Business answering services can keep inbound calls out of your voicemail

It can be difficult for small businesses to stay on top of inbound calls with so many other operational considerations to manage. A professional answering service can help alleviate that pressure, and ensure your callers are answered by experienced, professional agents both during business hours and after. Choosing a virtual receptionist service can be challenging, but doing your due diligence can reward you with a receptionist service that is effective, reliable and affordable.

Looking for the best answering services for small business? Check out our best picks page for a buyers’ guide and detailed reviews.

Image Credit:

Kritchanut / Getty Images

Adam Uzialko
Adam Uzialko Staff
Adam Uzialko is a writer and editor at and Business News Daily. He has 7 years of professional experience with a focus on small businesses and startups. He has covered topics including digital marketing, SEO, business communications, and public policy. He has also written about emerging technologies and their intersection with business, including artificial intelligence, the Internet of Things, and blockchain.