Every so often I get a call from a customer who has misunderstood how Free Conference Call services work. These people are usually upset about a higher-than-expected telephone bill which they’ve received. That’s because when you make a free conference call, you still have to pay your telephone company a long distance charge to reach the conference calling service. And usually that calling service is located in an out-of-the-way location, resulting in higher charges.
The difference between a free conference call service, a Calliflower Premium call and a traditional toll-free service is simply who pays and how much.
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| Each participant makes a long distance call to participate in the conference call. | Each participant makes a local call to participate in the conference call. | The call organizer pays for each participant to join the call. |
| Cost: Whatever your carrier charges you for long distance. | Cost: A flat $50/month for two organizers. $25/month for every additional organizer. | Cost: your toll free rate (7 to 10 cents/minute usually) multiplied by the number of participants. |
Scenario 1: You have a weekly meeting with your team who are spread out all over the country. There are 10 people in attendance at the meeting, and the meeting lasts for one hour each time. Your cost, using each of the service types above, would be:
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| At $.10/minute for long distance, you would pay 60 x $.10 x 4 or $24. | $50 | At $.10/minute for the toll service, you would pay 60 x $.10 x 10 x 4, or $240. |
| Note: If you reimburse your team members for their long distance costs, you would be paying an additional $216, bringing your total to $240. | Note: You can make as many additional calls as you like each month, and you won’t pay a penny more. |
Scenario 2: You are coordinating a project which requires 3 meetings of 90 minutes duration per week with team members including a PR agency in New York, a product manufacturing company in Singapore, and your head office in San Francisco.
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| At $.10/minute for long distance, you would pay 3 x 90 x $.10 x 4, or $108. | $50. Calliflower has local call-in numbers in each of the three cities. | A leading conferencing provider charges $0.30/minute for Singapore dial-in. Your cost would therefore be 2 x 3 x 90 x $.10 x 4 + 1 x 3 x 90 x $.30 x 4, or $540. |
| Note: You will also be expected to reimburse your contractors for their calling costs as well – a minimum of $216 more, bringing your costs to at least $324, depending on what a call from Singapore to North America costs. | Note: You can make as many additional calls as you like each month, and you won’t pay a penny more. |
Scenario 3: You are coordinating 2 phone seminars as a marketing event. No presentation is required. 100 participants will call in to listen to the seminar, ask questions, and receive answers. The entire event will last one hour.
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| At $.10/minute for long distance, you would pay 60 x $.10 x 2 or $12. | $50 | At $.10/minute for the toll service, you would pay 60 x $.10 x 100 x 2, or $1200. |
| Note: You can make as many additional calls as you like each month, and you won’t pay a penny more. |
Scenario 4: You hold daily sales webinars for up to 10 prospects at a time. Each call lasts 20 minutes, followed by 10 minutes of questions and answers. A sales presentation must be delivered.
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| At $.10/minute for long distance, you would pay 30 x $.10 x 20 or $60 for the calls. In addition, you would pay $50 for a web conferencing service such as GotoMeeting, bringing your total to $110. | $50, including the web conferencing. | At $.10/minute for the toll service, you would pay 30 x $.10 x 20 x 10, or $600 for the phone calls. In addition, you would pay $50 for a web conferencing service, bringing your total to $650. |
| Note: You can make as many additional calls as you like each month, which means that you could use Calliflower to close the deal with each of these prospects, and not pay additional. |
Scenario 5: You manage a team of 5 business development representatives. Two are located in London and cover Europe, two in North America, and one in Singapore, responsible for Asia. Each representative makes an average of 5 calls per week of duration 45 minutes, with four participants. In addition, there is one weekly team call of 90 minutes duration with the five representatives and yourself.
| Free Service | Calliflower Premium Service | Toll-Free or 800# Service |
| No free service can accomodate this scenario. | $50 for the initial account, plus $100 for an additional four organizers for a total of $150. | Assuming $.10/minute for the toll service in North America, and $.30/minute for cross border calls in Asia and Europe, you would pay $990 for the business development calls, and $432 for the weekly team meeting calls, for a total of $1422. |
As the saying goes, your mileage may vary. Perhaps you pay more, or perhaps less, for long distance calls than we’ve postulated in these examples. Or, perhaps you’re on a flat rate plan, and long distance is simply included. However you calculate your results, the conclusions are inescapable:
- Free services make economic sense for those with light conferencing needs, or those with flat rate long distance plans. The disadvantage of a free conference call service is that as your usage goes up, so do your costs.
- Toll-free services are convenient, but not economical. Unless you have an ironclad requirement for national toll-free service, toll-free just doesn’t make sense. Your costs rise as you use the service, and as your calls become larger.
- Flat rate, with local calling numbers, is usually the most economical choice of all.
At Calliflower, we don’t provide 800 number service. We can’t buy toll free lines at any wholesale price that doesn’t make them into a rip-off for our customers. But we do provide both a free conference calling service, and our premium conference calling service with document sharing and flat rate service via local dial-in numbers. Choose whatever flavour you like, or your business needs, just so long as it’s not toll free.
{ 2 comments… read them below or add one }
Alec, While your reasoning and analysis is spot on, I think you missed an option. Once a company grows beyond a given point, it might become cheaper to simply purchase the conferencing infrastructure and manage it in-house as part of the telephony or IT services provided. Doing that will add a considerable upfront cost to the solution with an additional continuous maintenance cost, but will drop the other costs considerably. Tsahi
Thanks Alec for this interesting comparison. I work for a small company with a geographically dispersed population that is probably above-average in conference all needs. However, we all have company mobiles with all-you-can-eat plans and flat-rate LD, so the free conference call model would seem to make sense. However, for those of us who want to use SIP clients, Skype, or Google Voice, the picture is less rosy. Some VoIP providers offer less optimal routing to (resulting in poor voice quality), Skype just refuses to terminate the call, and GV charges up to $0.25/min. The reason of course is the cost of termination to the rural ILECs where many of these services are hosted. I expect that this model will collapse at some point, but until that day comes, it has been hard to make a compelling case on the grounds of cost to abandon our current mode of operation.