Tips for Running a Successful Answering Service

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderFor all my adult life writing was something I did, but it meant nothing more. Then about eight years ago I began to take writing more seriously, wondering if it might be my next career. (It is, but it’s a part-time career. No worries, I will continue to publish TAS Trader and Connections Magazine.)

My first step as a writer was to attend a writing conference to learn more about the industry. Now my goal is to attend two conferences a year. Then I begin to study the craft of writing: reading blogs, listening to podcasts, subscribing to magazines, and buying books. Next I joined a couple of critique groups, where we mutually help each other improve. And, since I’ve actually been writing for several decades and been a publisher for fifteen years, I started blogging about writing to give back to the writing community; I also speak at writing conferences. As I moved forward I began working as a commercial freelance writer.

A couple years ago I decided to branch into fiction. Though I could have learned by the school of hard knocks, I decided to jumpstart my efforts by hiring people to guide and instruct me: coaches, developmental editors, and teachers. And I outsource things too: book cover design, copy editing, and proofreading. It would be foolish to try to do these myself.

What’s this have to do with running an answering service? Plenty.

Attend Conferences: I’m shocked that I continue to talk to TAS owners and managers who have never been to an industry event. They claim they can’t afford it. I say they can’t afford not to. Conferences provide a great way to network and learn. I think everyone should attend at least one conference a year—and not just owners but key employees, too.

Give Back: I receive the most when I help others, when I freely share what I know. Peter’s Law of Reciprocity states, “Everyone you meet knows something you don’t… so politely and tactfully learn what it is. Conversely, everyone you meet doesn’t know everything you do…so be willing to graciously share whatever you can when you are asked.” When you give, you receive.

Hire Outside Help: It makes no sense to spend a lot of time trying to figure out something by trial and error when you can pay someone to teach you. When I bought Connections Magazine from Steve Michaels in 2001, I hired a $200-an-hour magazine publishing consultant to point me in the right direction. Best decision ever.

Tap Outsourcers: You can outsource every aspect of running a telephone answering service, including operations. While I know of no one who has outsourced everything, many successful TASs have outsourced specific aspects of their business, such as sales, marketing, billing, collections, technical, and even management. If someone else can do it better or for less, it’s foolish to keep it in house.

Whether it’s writing a book or running an answering service, be intentional about improving and invest in learning. It’s the only way to go.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save

Lessons From Cars, Computers, and Software

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderSince I work at home, I don’t do much driving. I sometimes wonder if I really need a car. Couple this with my preference to invest in a product and use it as long as I can. As a result my higher-end car was nineteen years old and pushing a quarter million miles. In November I replaced it. Though it’s time wasn’t up, I wanted a change. I don’t think anyone would fault me for that.

I take the same approach with technology. I buy the best I can afford and use it as long as I can. My main computer is four years old, my backup computer is six years old, and my laptop (which I seldom use) is ten. It’s replacement should arrive this week.

For the first time I didn’t buy a computer with Microsoft Office pre-installed. Instead I will make the switch to Office 365, a subscription software service. Philosophically I object to subscription services because in the past they haven’t made financial sense given the way I approach technology. (Subscription services are a brilliant move for vendors as it provides them with consistent cash flow, which allows them to support their product, invest in upgrades, and create new modules.) In the past, subscription services would have cost me more than making an outright purchase and using it well past its expected life span.

Switching to Office 365 will allow me to have the newest software on all my computers (not just the new laptop) and will keep me on the latest software version. And since Microsoft is calling Windows 10 “the last version of Windows,” I can expect my software to outlast my hardware. Instead of paying several hundred dollars for Office 2016 Professional on my laptop (or over a thousand dollars to update all three computers), I will instead pay a low monthly fee to enjoy the latest and greatest. How cool is that?

While I don’t run an answering service anymore and therefore haven’t done a cost analysis, I understand the same dynamics applies to operating an answering service using subscription-based services (whatever label you place on it: hosted, cloud-based, SaaS, PaaS, and so forth). It’s good for answering services, it’s good for vendors, and clients benefit as well.

If you’ve already moved to a subscription approach to your answering service platform, congratulations. If you’ve not made the switch, now might be a good time to revisit it.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save

On Earth Peace and Good Will Toward Men

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderThis month I’m not going to write about the telephone answering service industry or customer service or any of the things I typically address in TAS Trader. Instead I have a seasonal thought—sort of.

In considering our society as a whole, the past several months have been rough: divisive news, polarized rhetoric on social media, and a general loss of civility. The shouting is deafening. Everyone I talk to is sick of it and looking for us to move beyond the constant turmoil and return to some degree of mutual respect and decorum. I so agree.

Maybe this holiday season can mark a shift toward a fresh start. Let’s start by taking a line from the Christmas story: “On earth peace and good will toward men.” I like that. We need more peace (less fighting) and increased goodwill (less conflict). And then our world—or at least our space in it—will be a much better place.

While we can’t compel other people to promote peace on earth and goodwill to all, we can each do our part to bring it about. Little by little, day by day, we can each do one thing for peace and goodwill. Perhaps others will notice and do their part too.

A little less fighting and a little less conflict will make our world a better place. And there is no better time to start than this time of year.

So I wish you a Merry Christmas, Happy New Year, and on earth peace and good will toward men.

May it be so.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

How Well Do You Pay Your Answering Service Operators?

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderLong ago, perhaps in graduate school, I read a management guru who advocated that a company’s highest paid employee should ethically make no more than seven times the lowest paid employee. Of course I can’t find that source now, but I remember it well.

For a telephone answering service, the two people at opposite ends of the wage scale are the owner/president/CEO and an entry-level operator. With the federal minimum wage in the United States currently at $7.25 per hour – and yes, there are sadly some answering services that still pay minimum wage – that projects to a top annual salary of around $105,000 a year. Of course it doesn’t need to be that high, but if can be.

How close does your answering service come to meeting this paradigm of no more than a seven-fold wage differential? Maybe it’s time to re-examine pay rates: decrease yours, increase theirs, or do both.

While I’ve met TAS owners who barely scraped by, some effectively making less than minimum wage for their endless hours of work, I think those players have all left the industry, either due to the sale of their business or its closure. Left are the viable players, the serious businesspeople who run great organizations and enjoy success. Many of them work diligently to maximize their paycheck, while at the same time remaining convinced they must pay their front-line staff as little as possible. “It’s the economics of the industry” they say.

I don’t agree.

What happens when the minimum wage goes up? Some states and cities already have, and answering services in those areas have adjusted to a higher starting wage. With talk of $12 to $15 dollars an hour, the low-paying answering services will be forced to make changes, too, or go out of business.

Get ahead of what is bound to come. Start increasing what you pay your answering service operators. But here’s a hint: Don’t pay more for the same caliber of employee. Pay more and expect more. Everyone wins.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save

How Well Do You Know Your Answering Service’s Clients?

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderI recently read a fiction book set in the late nineties. In a small but pivotal part of the story stood a telephone answering service. The author was mostly accurate in describing how an answering service functions, though his depiction of the industry highlighted several negative stereotypes as the norm.

The FBI investigated one of the answering service’s clients, a professional assassin. They laid out two options to the answering service’s owner: cooperate with us and we will ignore your involvement in your customer’s crime or don’t cooperate and be charged as an accessory to murder, over two dozen of them, and risk spending the rest of your life in jail.

The owner decided to cooperate. Though she had never met the man who signed up for the service or the woman who they contacted with messages, the owner did admit she thought something was suspicious. She assumed her client was involved in some low-level fraud, but nothing to the level of a hitman. Since they paid their bill every month, quickly and reliably, she was willing to ignore whatever business they might be in.

A few days later, her client – the hitman – paid her a visit. The gist of the conversation, aided by the threatening presence of a handgun, was if you tell the FBI who I am, my associates or I will kill you.

Talk about a no-win situation.

This story, of course, is a work of fiction. But I share this scenario because I know that – despite the majority of answering services who would carefully avoid such a client – some services will take any client who can pay his or her bill. Maybe it’s time to rethink that strategy.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save

Is Your Answering Service Glass Half-Full or Half-Empty?

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderAs I talk with owners and operators in the telephone answering service industry, some have concerns and others share excitement. I understand those who are pessimistic. After all there is much to worry about. I also understand those who are optimistic. They see ongoing changes to the industry, as well as threats from within and without, as occasions to celebrate.

These folks have figured out how to market and to sell, not just to offset attrition but to grow organically. Others embrace acquisition, either for the art of the deal or as a means to pick up new clients from acquisitions who fail their newly acquired clients. Still others have figured out how to manage staff successfully across multiple locations or to truly scale their business in a way that works in actual practice. Last are those who manage what they have with excellence: maximizing value, thrilling clients, engaging staff, and making a nice profit in the process.

Regardless of which camp you are in, the half-full contingent or the half-empty group, now is a great time to begin preparing for next year. Don’t wait until December 31 to begin your strategic plan for the new year. And whatever you do, don’t confront the upcoming year without a plan.

  • Look at what you do well and ask how you can do it better. Every TAS has at least one thing they do with excellence. Don’t lose sight of that.
  • Then look at where you struggle and seek ways to turn it into a strength. Every TAS also has at least one thing they can do better. Don’t think otherwise.
  • Last look at your biggest pain point and make a plan so it hurts a little less. You can do that.

Do these three things and make next year your best one yet. Start preparing today.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

The Dark Side of Acquisitions

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderHaving bought more than a dozen answering services in my day, I understand the allure of chasing the sale, negotiating fair terms, closing the deal, and taking control of the acquisition. Yet the real value comes after the sale, when the acquired accounts are optimized.

Yes, you inevitably lose some, no matter how careful the transition, but the ones that remain are profitable and grow your bottom line. Even though this post-sale optimization is a critical final step, it’s not nearly as exciting as pursuing the deal. But it is more important. Critically so. Maximizing the value of a newly acquired property requires hard work, takes time, and receives little recognition. But when successful, the results pay off month after month.

Some answering services excel in deal making but flounder at exploiting the potential of their purchase. As a result, they churn the accounts they just bought. While a few of those clients will stop using answering services altogether, a majority will move on to another answering service. And that’s good news for everyone else in the industry.

Each acquisition prompts some clients to look for a new service. In some cases, many accounts will want to jump ship. This means opportunity for the rest of the industry. Look for ways to make it easy for these businesses to switch to your answering service. Speed and ease of transition is critical. They are in pain and want to move. Make it effortless, and they will choose you.

This is the upside to the dark side of acquisitions.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save

Save

Why I’m Excited About the TAS Industry

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderA couple years ago I started offering freelance commercial writing services. Not surprisingly, much of the work I do is in the answering service industry: commercial marketing, blog posts, website content, and marketing materials.

As I research and write for my clients in the TAS industry, one theme reoccurs. I am struck with the realization that there is great opportunity ahead of us. Though these opportunities aren’t readily apparent, they do exist. It takes visionary leaders willing to try new things. Some initiatives fail and some succeed. We learn from failure and build upon success.

These opportunities often mix great staff with exciting technology to spark creative service offerings. And of course, promotion and marketing is now more critical than ever.

Ours is a resilient industry. Yes, it is changing. Consolidation continues. Our vendors innovate like never before, producing technology that provides us the means to offer exciting new services. Clients expect more and that helps us get better. The bad players are being bought out or go out of business. The good players compete and grow and make money.

While there may be less answering services to do the work, I believe there is more business awaiting us than ever before.

I am so excited about the future of the TAS industry, and I hope you are, too.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Looking for Good Ideas among Well-intended Misfires

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderMany years ago in another industry, my boss shared his grand suggestion to save money and boost productivity. It was insightful but had a critical flaw that would render it unworkable. He was enough removed from the day-to-day workings of our operation that he was unaware of the hole in his logic.

As the TAS industry continues to consolidate, investment comes from the outside. These folks have their own grand ideas of how they will save money and boost productivity. Most all of the time they are wrong. Their ideas are not realistic and may not even be feasible, but they lack the intimate, practical, day-to-day knowledge to realize that.

Notice I said “most of the time.” This means that occasionally outsiders bring a truly innovative idea into the TAS industry. But if we’re not careful we will dismiss it as being ill conceived, despite their good intentions.

The key is to keep an open mind, to not hold our time-proven SOP (standard operating procedure) as sacrosanct. This is easier to say than to do. But just because we’ve always done something a certain way, doesn’t mean we can’t find a better method to do it, a means to save money or boost productivity. So we must respectfully consider an outsider’s plan to change our ways – they just may be right.

However, those on the outside looking in must balance their great ideas with the seasoned pragmatism of insiders. After all, most of the time we will be right.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Celebrating Subscription Services

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderIt seems that subscription services surround us: from Dollar Shave Club, to HP Instant Ink, to Microsoft 365. For the record, I’ve passed on all three, though I recently questioned that decision as I made another trip to the office supply store to purchase printer ink. Nonprofits also embrace this approach, preferring ongoing, automatic monthly donations, in lieu of chasing larger annual contributions. Rather than fight their paradigm, I have acquiesced to their new method of fund-raising.

The telephone answering service industry may have been the first to stumble unto this idea of monthly reoccurring revenue when it emerged some ninety years ago. I understand they followed a flat-rate billing model then, which fully exemplifies this concept. (I discount magazine subscriptions from this discussion because they bill annually, not monthly.)

Ten years ago, I first heard about the subscription model being offered by a TAS vendor. I immediately saw the brilliance of their plan. Assuming their cash flow could tolerate a transition from large system sales to reoccurring monthly revenue, they would position themselves well for the future, helping to ensure their ongoing viability.

This software subscription service is commonly called hosted solutions or SaaS (software as a service). While some claim distinctions between the two, they are essentially the same model. The concept also once went by ASP (application service provider), though that acronym now means something else.

As I said, this plan is brilliant – for the vendors. What took me longer to comprehend was that this makes sense for the answering services, too. As one firmly entrenched in the buy-once-and-use-it-forever perspective, I dislike the idea of paying a small fee every month.

Yet as I learn more about the TAS platform subscription model, I see it makes sense for answering services, too. This is especially true for startups and small to medium answering services, as well as larger ones.

Although I’ll stop short of saying that the subscription service model is right for all answering services to acquire their technology, I do assert that all answering services should look into it. The possible benefits are too big to ignore.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.

Save