I spent more than 30 years owning a telephone answering service, and one thing I learned during that time is that having access to a lot of numbers doesn’t necessarily mean you understand what is happening in your business. Answering services generate an enormous amount of information, especially today. We can see call volume, minutes, operator activity, billing, payroll, account activity, and dozens of other measurements. The challenge is deciding which numbers deserve your attention and, more importantly, understanding what those numbers are actually telling you.
I have been asked to speak about profitability analysis at answering service conferences over the years, and I often return to the same basic point. A number without context can easily give you the wrong impression. An account that generates significant revenue may look like one of your best customers until you examine how much operator time is required to service it. A busy month may feel like a successful month until you compare the additional revenue with the additional labor required to handle that work. The numbers become useful when you start connecting them to what is actually happening inside the operation.
Revenue Is Important, but It Is Only the Beginning
Every answering service owner needs to know how much revenue the business is generating. That part is obvious. Where I think owners can run into trouble is when they use revenue as the primary way to judge the value of an individual account.
During the years I owned Accurate Messages, from 1995 until January 2026, I saw how two customers producing similar amounts of revenue could create very different workloads. One account might have straightforward instructions and predictable calls that operators can handle efficiently. Another customer paying roughly the same amount might have longer calls, complicated procedures, frequent changes, or other requirements that consume considerably more operator time.
When you begin looking at accounts that way, the question changes. Instead of simply asking how much a customer is paying, you start asking what it actually takes to provide that customer with the service they expect. I think that is a much more useful question for an owner to understand.
Account Activity Can Reveal What Revenue Hides
I believe answering service owners should understand the amount of work associated with individual accounts. Depending on the service, that might include call volume, talk time, operator time, message activity, or other measurable tasks performed on the customer’s behalf.
This is also why I have always been cautious about relying too heavily on averages. An average can tell you something about the business as a whole, but it can also hide what is happening with individual customers. You may know that overall call volume has increased, for example, without realizing that a small number of accounts are responsible for most of that increase.
Looking at individual account activity allows you to ask better questions. Has this customer’s volume changed significantly during the past year? Are operators spending more time handling the account than they used to? Have the instructions become more complicated? Has the service expanded while the pricing has remained unchanged? Sometimes the answers confirm what you already suspected, but other times they can be surprising.
Labor Numbers Need to Be Viewed in Context
Labor is another area where numbers can be helpful and misleading at the same time. An answering service obviously needs to understand staffing costs and productivity, but I do not think one productivity measurement can tell the entire story.
Not every call is equal. Some calls are handled quickly, while others require several steps. Some accounts have simple instructions, while others require operators to collect detailed information or follow a specific process. Call patterns can also change depending on the time of day, the day of the week, and the customers being handled during a particular shift.
If one operator handles fewer calls than another, I would want to understand why before drawing a conclusion about performance. Perhaps the calls were longer or more complicated. Perhaps that operator was working with accounts that required additional steps. Productivity still needs to be measured, but the number becomes much more useful when you understand the circumstances behind it.
Trends Can Tell You More Than a Single Report
One habit I developed over the years was paying attention to changes over time. A single report gives you a snapshot of the business, while several months of information can begin to show you a pattern.
This is particularly important with customer accounts because changes do not always happen overnight. An account’s call volume might slowly increase over the course of a year. The average time required to handle its calls might gradually become longer. The customer might add new instructions or services along the way. None of those changes may seem significant on their own, but together they can create a very different account from the one you originally priced.
That is why I think answering service owners should regularly compare current activity with previous periods. If the amount of work associated with an account has changed considerably while the billing has remained the same, it is worth understanding why. You may ultimately decide that nothing needs to change, but at least you are making that decision with better information.
Profitability Is Not Always Where You Expect to Find It
Profitability analysis has interested me for a long time because the results are not always intuitive. A customer with a large monthly bill can require so much operator time that a smaller, simpler account may ultimately perform better for the business.
That does not mean an owner should immediately get rid of an account simply because the numbers are not ideal. Business relationships are more complicated than that. The customer may have been with you for many years. There may be an opportunity to adjust the pricing or change how the service is structured. A temporary situation may also be causing unusually high activity. There are many reasons an owner might decide that keeping an account makes sense.
This is where I believe numbers and experience have to work together. The data can show you that something deserves your attention, but it cannot make every business decision for you. An experienced operator still has to look at the circumstances and decide what makes sense.
That thinking has influenced my work with TAS Concepts and TASbillerCloud. I began my entrepreneurial career writing custom programs, and I have always thought useful software should solve a real problem. For answering service operators, one of those problems is understanding the relationship between what an account produces in revenue and what it requires from the operation.
More Data Does Not Automatically Create Better Decisions
The amount of information available to answering service owners today is very different from what was available when I entered the industry in 1985. Modern systems can generate reports and measurements that would have been difficult to produce decades ago. I consider that progress, but I also think there is a risk of becoming overwhelmed by information.
I would rather have a smaller number of useful measurements that encourage me to ask good questions than dozens of reports that nobody has time to study. I want to know which accounts are consuming the most resources, which accounts have changed significantly, where labor demands are moving, and whether pricing still reflects the work being performed. Those questions give an owner somewhere useful to start.
After more than four decades in the answering service industry, I do not believe there is a single number that can tell an owner whether the business is healthy. The operation is too complicated for that. Revenue matters, labor matters, account activity matters, and profitability matters, but none of them should be viewed completely on their own.
The real value comes from understanding how those numbers relate to one another. When something changes, an owner should be able to recognize it and ask why. In my experience, asking that question is often where the most useful information begins.