Raising Rates Is Imperative
By Jacquelyn Ormsbee
I was in my second year of business as the owner of a new telephone-answering service. My accounts were all drastically underpriced, flat-rate accounts, and I was having trouble making ends meet. I was a novice at running a business and only knew about managing an answering service from the perspective of my experience as an operator. I had a long and eye-opening discussion with my accountant. He said that I had to double my rates or die. He explained that I could lose half of my clients at double the rates and still make the same amount of money. However, he didn’t think I would lose that many clients. I then asked myself the tough question if I really wanted to be in business or not.
Ultimately, I decided that doubling my rates really was how I had to approach it. Because it was such huge increase, I wrote a forthright letter explaining the dire situation (without sounding too desperate). I explained how much I enjoyed servicing my clients and helping their callers. I also offered them alternate billing options, such as time-based usage billing. Then I proceeded with the rate increase. I did, in fact, raise my rates two times – and in some cases three times – so that each account was now profitable. To my utter amazement and total shock, I did not lose a single client because of the rate increase.
That was done during the month of February. Since then I have followed the advice of many industry veterans and raised my rates every year. I picked February as the month to do this. I also started using time-based billing more. I now have about 70 percent of my clients on time billing, with the remaining 30 percent on a flat-rate plan appropriate to their usage. Last year, because of the economy, I delayed my increase until July, and I plan to continue that as my new “standard.”
I tell clients that I raise my rates between 3 and 10 percent per year. The month before the increase, I put a line item on their bill as a reminder, but I do not mail any rate increase letters. When I do the increase, I put another line item on the invoice to reminded them; for time-billing accounts, I note that the price increase for overages (additional time) will be seen on the following bill. Most accounts I only raise 3 to 5 percent, but if an account has changed it’s “personality” and is now more complex, the rate increase will head towards 10 percent. Flat-rate accounts are subject to change whenever their account changes in a way that affects volume or complexity, such as adding an additional office or another partner. In those cases, I explain the reason for the increase.
I’ve never lost a client to price increase. I have had a few clients protest their increase, and then I negotiate with them.
I treat my clients fairly, and I’m honest about my pricing methods with them. Prices go up everywhere for everything. I often have clients call me to know in advance what their increase is going to be this year. The majority of my clients are happy with their service; they tell me this regularly.
So believe the wisdom of the industry experts: Raise your prices; be profitable. I personally keep the words of Paula Ford on my monitor: “Profit is not a four-letter word. Fear is a four-letter word.”
Jacquelyn Ormsbee is the founder of Best Connections Answering Service.
PINetwork Holds User Group Meeting in Scottsdale
PINetwork held their annual Professional Inbound Network (PIN) meeting in Scottsdale, Arizona, on March 14 to17. In addition to company and product updates, sessions included:
• Real-time traffic reporting
• Agent training
• SMS features
• Disaster recovery
• Pinnacle Dashboard
• Previews of the new Pinnacle features
Tuesday night, the group visited Contact One Call Center in Tucson and then enjoyed a real western barbecue. The barbecue was hosted by Judy Wood and her family.
The new PIN board of directors for 2010-2011 was announced:
• Susan Liggett, CallNet – president
• Charlie Crown, Towne Answering – vice president/president elect
• Larry Bear, Port Answer – treasurer
• Michael Shaw, Business & Professional Exchange – secretary
• Royce Mitchell, Westpark Communications – board member
• Rose Nigro, Professionally Speaking – board member
• Peter Gross, Sunshine Communications- board member
• Phyllis Shaw, Business & Professional Exchange – past president
“The PIN group planned a great meeting. The sessions were interesting, and the social events were over the top,” said Pat Kalik, vice president of Professional Teledata.
Professional Teledata Announces PInnacle Dashboard Accessory Program
Professional Teledata announced the availability of the Pinnacle Dashboard Accessory Program for all Pinnacle customers. The dashboard provides a real-time visual display of system metrics and an overall image of answering-service load and performance. It also has a real-time traffic screen, which provides a graphic display of call activity. The dashboard is designed with multiple monitor support in mind, so it can easily be run on a second monitor attached to a supervisory PC. When used with a large screen monitor, it easily serves as a sophisticated reader board.
Amtelco Goes “Pink”
Amtelco launched a “You Click – We Donate” fund-raising campaign for the Susan G. Komen Breast Cancer Foundation. For every new fan on Amtelco’s Facebook page, Twitter, or those with a unique login to Amtelco’s customer support Web sites (Techhelper, Amtelcopedia, and Resource Library), Amtelco will donate to this far-reaching cause. The campaign continues through October (which is Breast Cancer Awareness Month), 2010. Amtelco president Tom Curtin noted that this is an ideal way “to benefit an organization whose core objective is to find a cure for a disease that has touched so many of our friends and relatives.”
AnswerNet Promotes Josue Leon to VP of Operations
AnswerNet announced that Josue Leon has been promoted to vice president of operations. Leon has been with AnswerNet and its predecessor companies for over twenty-three years. He began as a site manager and has held various operations management positions within the company. Leon will be responsible for all of the call center and client-facing operational activities, including client services, quality control, and measurement and service delivery. “Josue is a creative and thoughtful executive who embodies AnswerNet’s core values,” said AnswerNet president and CEO Gary A. Pudles.
CAM-X and WSTA to Hold Joint Convention
This year CAM-X and WSTA will hold a joint conference to increase the pool of vendors and member participants, allow for a better program and provide a better economy of scale to hold down costs. The convention will be in Las Vegas at the Hard Rock Casino Hotel on October 3-6, 2010. It is hoped that the location will be one more attraction for international attendees. The theme is “The Future of Our Industry,” with a focus on marketing; there will also be sessions on “social networking,” a second Profit Enhancement Group (PEG) meeting, and roundtable discussion groups.
CenturiSoft Receives 2009 Best of Business Award
CenturiSoft Inc. has been selected for 2009 Best of Business Award in the telecommunications category by the Small Business Commerce Association (SBCA). The SBCA 2009 Award Program recognizes the top 5 percent of small businesses throughout the country. Using statistical research and consumer feedback, the SBCA identifies companies it believes to have demonstrated what makes small businesses a vital part of the U.S. economy. The selection committee chooses the award winners from nominees based on statistical research and monthly surveys administered by the SBCA, a review of consumer rankings, and other consumer reports.
Professional Teledata’s PInnacle Freedom Negates Weather’s Fury
Professional Teledata’s hosted solution, PInnacle Freedom, proved itself during winter storms and outages. “With the recent weather issues in the East causing outages and transportation issues, the ability of Freedom offices to continue operation has really proved the effectiveness of hosted solutions,” said Dale Schafer, VP of engineering at Professional Teledata. Hosting is also effective in integrating multiple locations and for relocations. The Freedom product includes PInnacle software licensing and the use of hardware hosted in Manchester, New Hampshire; call center staff can access the system using a high-speed Internet connection 24/7.
[Posted by Peter Lyle DeHaan, PhD for TAS Trader, a telephone answering service e-publication from Peter DeHaan Publishing Inc.]
Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of TAS Trader. Check out his latest book, Sticky Customer Service.