The return on investment for a quality virtual receptionist can be virtually unlimited – provided you find a great provider with a rockstar team. When a caller dials your business phone number, their call will be answered by a professional virtual receptionist who will ask a few questions to learn about your caller’s issues and best decide how to help them. They will be the face of your company and have the power to either help you grow your business to new heights, or to sink it to new depths. In this post, we’ll start by talking about how much a virtual receptionist service costs and then explore several models for how to calculate the return on investment for a quality virtual receptionist.
How Much Does a Virtual Receptionist Service Cost?
A virtual receptionist will vary in cost quite a bit depending on how many minutes of usage you will need and what types of plans your provider offers. Typically, you will encounter three main types of plans: monthly, per minute, and per hour.
Monthly plans are rarely found in virtual receptionist companies (with the exception of Donna Digital Receptionists), but are exceedingly common for basic automated answering services. Most virtual receptionist companies tend to charge by the minute for most clients, while high-volume clients can sometimes negotiate per-hour rates at a discount.
The other factor to consider is whether the virtual receptionist service that you choose will charge extra fees on top of their regular rates. Most services will allot you a certain number of minutes per month included in your plan, and then will charge overage fees for each minute above that base threshold.
Additionally, many services will also charge for agent work time, which is time that the agent spends after a call filling out call summaries and emailing you the call notes, or may charge setup fees or holiday fees.
A good virtual receptionist company that can be trusted will either be open about all the fees they charge, or won’t charge fees at all.
How to Calculate the ROI of a Virtual Receptionist
There are three main ways that you can calculate the ROI of a virtual receptionist: lead value, time value, and brand value. This is one of our favorite subjects to talk about because it is one of the areas that we can really show off how valuable a virtual receptionist service for small businesses can be.
Lead Value ROI of a Virtual Receptionist
To help understand the lead value of a virtual receptionist, we split this section into two parts: the lifetime value of a client and the annual value of a client. This will help you to see the potential ROI on both the short term and long term basis.
The first and most accurate way to model the return on investment of a virtual receptionist is to use the average lifetime value of a customer to your business and look at the top-line revenue that a virtual receptionist could add. If you don’t know how to calculate the average lifetime value of a client, then you can calculate it using the following formula:
Average Value of a Purchase X The Number of Time a Customer Will Purchase From You = Customer Lifetime Value
Let’s use the example of a mortgage broker. Each client will on average be worth around $30,000 for their first transaction. And if they are happy with their broker, they will likely purchase a mortgage product from that same broker twice in their lifetime. Which means that the average LTV for a mortgage broker client is $30,000 x 2, or $60,000.
Next, you will want to count the number of calls that you miss each week. If you’re not sure, the average number of missed calls for a small business in the United States each week is around 14 calls – or around two missed calls a day.
That adds up to 728 missed calls each year. Now let’s say that you only are able to convert your leads at a 1% conversion rate. That means that you are leaving seven clients or (7 clients X $60,000 LTV) $420,000 in lifetime revenue on the table each year by not picking up each and every phone call.
Continuing with the previous example, if we wanted to calculate only the annual ROI of a virtual receptionist, we could take those seven missed clients from the previous example and take only the first year’s value of (7 clients X $30,000 first transaction value) $210,000.
Now, assuming that you were using the Donna Digital Receptionist middle-of-the-road Standard Plan (link) which costs $449 per month, that would come to a total first year expense of ($449 X 12) $5,388. From there we can calculate the return on investment as $210,000 / $5,388 = 3,897%
So the annual return on investment in this example would be 3,897%.
Time Value ROI of a Virtual Receptionist
This method of calculating the ROI of a virtual receptionist requires a little more work on your part, but is a much more simple calculation. Simply add up the number of hours you are on the phone each week and multiply that number by 52 to get the number of hours you are on the phone each year. This number will probably surprise you!
From here, multiply that number by your personal hourly rate that you think you are worth in your business and you will have the number of what it is costing your business to have you answering the phone personally. Divide that number by $5,388 (the annual expense of Donna Digital’s Standard Plan) and multiply it by 100 and you will have the percent ROI of hiring a virtual receptionist.
Brand Value ROI of a Virtual Receptionist
Finally, calculating the brand value ROI of a virtual receptionist is the most difficult method as it requires making quite a few assumptions. For this exercise, you will have to do a little thinking and will have to determine all the constituent parts of your business that makes up your brand. This might include things like the graphic design of logos, social media, ad campaigns, content that you’ve produced, your website, an email list, or customer lists that you’ve built up over the years.
Now, consider what it would cost to replace all those items to their current level if you were starting from scratch today. Include all the paid advertising, sales, employee wages, time spent cold calling, web development, and any other costs that might be associated with rebuilding your brand.
This is called the cost-based model of brand valuation. Think of it as being like the replacement cost valuation that an insurance company might perform on your home.
Next, make sure to add in the intrinsic value that the brand itself has built up. Consider a brand like Apple where just saying the name evokes certain emotions and connotations in the marketplace. Your brand also has that kind of power. While it’s particularly difficult, try to put a value on that reputation that your brand has built up.
Finally, add up all that brand value and consider what the cost would be if you had the wrong person answering the phone and behaving poorly to your customers and clients. Just one bad conversation could cost you a client. How much is that client worth? How many of their friends will they tell of their bad encounter?
Obviously this is a very simple explanation, and a bit of a dramatized example. But the underlying point stands nonetheless: Your brand is valuable and just one bad interaction could undermine that, while one great interaction with a competent and well-trained virtual receptionist could have the opposite effect and grow your business to new heights.
Intangible Value of a Virtual Receptionist
Of course, to fully comprehend the total value of a virtual receptionist, you’ll have to look at the intangible value of using a virtual receptionist as well. Here are a few of the more obvious benefits:
- Convert leads at a higher rate. Calls convert to clients 12-20x higher than a webform for most businesses. What would your business look like if your current lead generation funnel converted 12x higher than it currently is?
- Capture leads outside normal working hours. How much is a single lead worth to you? Capture leads while you’re on vacation, sleeping, or with your family. A good virtual receptionist can also help to qualify leads with simple screening questions to ensure that only real leads are passed on while tire kickers and telemarketers are handled differently.
- Flexible help. Does your business have some times of the year that you get more business than others? Virtual receptionist services can be turned on and off as your business needs them so that you have support when you need it, and save on costs when you don’t.
- Increase brand value. What is the value of your brand? Adding a professional receptionist can increase the perceived value of your brand simply by having a real person answering the phones and presenting a professional first impression.
Want to see some more benefits of using a professional virtual receptionist service? Check out our list of 61 Benefits of Having a Virtual Receptionist for Your Business.
Hopefully, this post has helped you to understand the full return on investment for having a virtual receptionist in your business. The time, money, and effort saved alone is likely worth it. But add in the intangible benefits as well and you’ve got a powerful recipe for growing your business while taking back your life.