The Surprising Cost of Missed Calls

cost of missed calls

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We’ve all been there: you’re driving somewhere, finishing up a job, or in the middle of a conversation with a customer when all of a sudden…the phone rings. One of two things will happen next. You either:

a) stop what you’re doing and pick up, or
b) trust that the customer will leave a voicemail and circle back with them later

Provided you hear the call and can take a few minutes to chat, you’ll try to answer it. But if not, the customer goes straight to your voicemail, where they most likely hang up never to be heard from again.

Missing calls on occasion is a common aspect of running a business. When you and your team are hard at work serving customers all day long, it isn’t always possible to drop everything and pick up the phone whenever you receive a call. Even if your business has a dedicated receptionist or customer service representative, they too can have their bandwidth stretched if multiple people reach out at the same time. As a result, calls are missed, and business must go on as usual.

Due to the regular nature of these types of problems, it is commonly understood that missed calls mean lost revenue. But how much lost revenue, exactly? The actual numbers may surprise you.

We’ll work with some standard metrics here for example’s sake. Let’s say your business has a call-to-lead ratio of 3:5. If you book one out of every three leads, that means that for every five calls missed, you lose approximately one job. Therefore, if your average job is worth $600, each missed call works out to be a loss of about $120. Multiply that by the number of calls you miss every week, month, and year, and it quickly becomes clear how much a missed call here and there can add up to significantly affect your bottom line.

The truth is, missing calls is a much more expensive problem than many small business owners realize. 

In 2016, 411 Locals found that the average large company misses about 22% of its calls. But for small and medium-sized businesses, that number was a whopping 62%.

This spells out an incredible loss for small businesses, as customers who call have been shown to convert faster, spend more money, and boast a better retention rate than online traffic. Many business owners assume that customers they can’t answer right away will simply leave a voicemail or call back, but most often that’s not the case. Statistics have shown that close to 80% of customers will not proceed to leave a voicemail if their call is not picked up. This happens for a number of reasons, but the most common tends to be that people don’t believe their voicemails will actually be heard or responded to. In the vast majority of cases, a person whose call goes unanswered will not bother to call back either; they will simply move on to a competitor who can provide them a faster response.

The total cost of poor customer service was estimated to be nearly $75 billion in a 2018 report by NewVoiceMedia. The report, titled “Serial Switchers,” measured the amount businesses lost to their competitors due to bad customer service experiences, which included everything from missed calls, to unhelpful employees, to even long hold times. As was clear from the data, customers will simply move on to competitors when they either have trouble getting in touch or do not get the response they need from a company. Over time, this customer switching behavior means big losses for businesses.

If you currently work with a marketing agency to drive leads to your business through SEO and PPC, these missed calls and bad customer experiences not only represent lost revenue opportunities, but also a waste of your hard-earned marketing dollars.

The Solution

So what can be done about this?

Option number one would be to hire more staff. If answering calls is getting difficult to keep up with for your current team, adding another person might help fill in the gaps. This makes it easy for you and your core field team to focus on serving current customers, while one or two dedicated people are available all day to pick up the phone. Although it can be a great choice for many businesses, going this route should only be done after serious consideration, as new employees come with commitment and a significant price tag.

If you’re not in a position to hire an additional employee, a call answering service is a more cost-effective solution that might be able to provide you with exactly what you need. In lieu of a flat, fixed fee for an additional staff member, call centers charge based on what you get. The most common set-up is the traditional pay-per-minute structure. With this model, as the name suggests, you simply pay a fee based on how long your call center is on the phone with customers. Alternatively, a pay-per-booking structure is a performance-based way to pay for your service. This model makes sure you get full call answering coverage for your business, while only paying for actual appointments scheduled.

Whichever option you choose, missed calls don’t have to be a fact of life for your business. With the many cost-effective solutions out there, you are sure to find an option for bridging the gaps in your customer communication that meets your needs while fitting within your budget. 

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