Answering Service Pros & Cons Small Businesses Need to Know

The pressure is always on when you’re a business owner, and you’ve got a ringing phone. Is it a potential customer that you could land? An existing client who needs to reschedule an appointment? Or worse — does someone need urgent help? Missed or mishandled calls can quickly add up to missed revenue.

Managing incoming calls can be challenging. Some business owners turn to outsourcing to large call centers, though many small to medium-sized businesses find that these call centers lack a personal touch. Increasingly, many business owners are looking at answering services for small businesses.

There are many answering service choices to consider, and not all are created equal. Do you want an exclusively human answering service or one supported by AI-powered features? There are pros and cons to each. In this post, we’ll discuss your options so you can choose the solution that works best for your customers.

What Is an Answering Service?

An answering service is a solution that handles inbound customer calls when your business can’t answer directly.

And this is important to note: Modern answering services go far beyond message taking. They can qualify leads, book appointments, route calls intelligently, and integrate with business systems like CRMs and calendars.

Today, professional answering services fall into three main categories:

• Human answering services: Humans completely handle all calls.
• Automated or AI answering services: AI agents are the first point of contact for callers and offer advanced functionality.
• Hybrid models: AI agents handle certain types of calls and escalate to human agents as needed.

Each approach has strengths and limitations that matter depending on your business’s call volume, customer expectations, and complexity. The type of virtual receptionist service you choose for your business can directly impact customer satisfaction.

Pros and Cons of Human Answering Services

Let’s start with using human answering services to manage your business calls.

While some customers prefer human support, there are drawbacks to human-only support that can result in longer wait times, increased costs, and limited scalability that ultimately impact customers negatively.

Pros of human answering services

Human-only answering services excel in situations that require judgment, empathy, or nuanced conversations. Sometimes, there’s no making up for the personal touch of a real person.

Trained agents can:

• Handle emotionally charged or sensitive calls
• Adapt tone and language in real time
• Navigate complex or ambiguous decisions that may operate outside of your standard business rules and require advanced logic
• Build trust through natural conversation

For industries like healthcare, legal, or crisis response, this human touch can be essential.

Cons of human answering services

Despite their strengths, human telephone answering services struggle operationally at scale. Common drawbacks include:

• High and unpredictable costs due to per-minute pricing
• Limited scalability during call spikes or seasonal demand, which can be difficult to plan for
• Longer customer wait times when agents are busy
• Inconsistent quality across agents and shifts, which may not always be easily identifiable
• Staffing challenges during nights, weekends, and holidays, even when you’re outsourcing

While these may seem like fringe disadvantages, they can have a major impact on the customer experience during critical periods. If you have an outage, for example, and it’s impacting customers’ service level agreements, the last thing you want is for them to have extended wait times while they try to get a hold of you.

Pros and Cons of AI Answering Services

Like human answering services, AI call answering services have both benefits and drawbacks. However, strong agentic AI agents have positives that outweigh the negatives.

Pros of AI answering services

AI answering services are designed for speed, consistency, and scale, which is useful for businesses of all shapes and sizes. Key advantages include:

• Instant call answering with no hold times
• 24/7 availability without overtime or staffing concerns
• Ability to handle thousands of calls simultaneously
• Predictable monthly or use-based pricing
• Consistent responses without fatigue, agent burnout, or human error
• Ability to route callers to the right person in escalation protocols as needed
• Multilingual support without the need to hire additional specialized staff

Cons of AI answering services

AI systems still have limitations that matter in customer interactions, and it’s important to acknowledge them. These include:

• Limited emotional intelligence
• Difficulty handling novel or highly complex requests
• Potential frustration if escalation paths are unclear
• Over-automation when workflows are poorly designed

Let’s say a customer calls your real estate business. They have made an offer on a home and paid a good-faith deposit. But due to a complicated scenario after fallout from a bad inspection, they want to cancel the offer.

An AI agent could explain the standard rules of how good-faith deposits work, but since the situation is complex and high-stakes (with thousands of dollars on the table), this is not an area where AI shines. A potential miscommunication could be disastrous.

AI works best when it knows exactly what it is responsible for and when to step aside to enhance customer relationships. Call management is key here.

How AI Addresses the Core Limitations of Human Answering Services

There’s a reason why our 2025 Guide to CX trends found that 81% of businesses said they planned to increase their AI spending.

While AI has constraints, it solves many of the operational challenges that plague traditional live answering service models.

Cost predictability

Answering service cost matters to businesses of all sizes, but it’s critical for small businesses with tight budgets.

AI eliminates per-minute billing models and replaces them with predictable subscription or usage-based pricing. This removes cost anxiety during peak periods, giving you a cost-effective live answering service solution.

Scalability without degradation

AI scales horizontally. Whether you’re getting 10 calls or 10,000, performance remains consistent without expensive or frustrating staffing changes.

And best of all, you aren’t pushing your agents into burnout with unrealistic expectations and unmanageable workloads, so they’re free to handle the complex issues that actually need their attention.

Response time and availability

Want to win the race when it comes to lightning-fast response times and always-on availability?

AI answers customers instantly and never gets overwhelmed. Customers don’t wait on hold or get routed to voicemail during high-volume periods. And there’s no such thing as off business hours with an after-hours answering service that’s always capable of providing advanced support.

Here’s a sneak peek into how Nextiva’s XBert AI takes a phone call after hours:

Consistency and accuracy

AI delivers the same approved information every time. There’s no going off script, skipping steps, or making fatigue-driven errors. Overall, you’re looking at stronger customer experiences and a more consistent brand perception.

Key Factors to Consider When Choosing an Answering Service

Thinking about adding an answering service to your business? Here’s what you need to keep in mind when evaluating service providers.

Call types and volume

Look at your customer experience and the types of calls you receive. Which are routine and which are complex? And if they’re complex, what functionality do you need to address those calls?

AI agents, for example, can modify appointments as needed or qualify leads. But to handle complex and nuanced scenarios, they’ll need to escalate. Make sure that the software you choose can support your needs.

You’ll also want to assess how call volume fluctuates over time. This can help you choose a pricing model that works for your business. If you have fairly steady call volumes, choosing a flat monthly fee might work. But if you have drastic spikes, this may result in expensive per-minute surge pricing that could increase overall cost compared to another pricing model.

Integration requirements

Today’s answering services need to integrate with your tech stack, including your calendar software, CRM tools, ticketing systems, and messaging platforms. Without these integrations, your answering service will be stuck at just taking messages instead of delivering the full functionality you need.

Customization and control

Your business is unique, so you need an answering service that can account for that.

Look for platforms that allow flexible workflows rather than rigid scripts. You want your answering service to fit into your processes, not the other way around.

Reporting and visibility

Don’t overlook the need for strong reporting and transparent visibility.

Without clear reporting on answered calls, bookings, and missed opportunities, the return on investment is impossible to measure. It’s also difficult to identify customer satisfaction concerns or quality issues that may be impacting your business.

Level-Up Your Answering Service Experience With XBert

Gone are the days when answering services were just about coverage (though coverage matters!) Now, they’re increasingly about control, speed, and customer experience at scale.

Human answering services deliver empathy, but they often struggle with cost and consistency. AI answering services deliver efficiency but require thoughtful design to avoid friction.

Nextiva’s XBert allows businesses to automate what should be automated, personalize what matters most, and evolve their answering strategy without rebuilding it from scratch.

XBert is designed to provide flexibility rather than forcing businesses into a single answering model. It allows teams to:

• Automate routine interactions instantly
• Route calls intelligently based on intent and urgency
• Escalate to humans when nuance or empathy is required
• Handle calls, texts, and chats from one system
• Tie conversations directly to scheduling and CRM outcomes

For teams that want fewer missed calls, better customer experiences, and a system that grows with them, flexibility is no longer optional. It’s an advantage.

Choose a solution that scales with your business. See how Nextiva’s AI answering service can help your customers today.