Building an Outbound Cost Model from Scratch

Why You Need a Cost Model (Not Just a Rate Card)

A carrier rate card tells you the unit cost of billed minutes. It does not tell you:

• What fraction of billed minutes produce conversations
• How much your effective rate changes as lists age
• Whether flat-rate or per-minute is cheaper for your specific dial intensity
• What your telecom cost is per closed deal, booked appointment, or collected dollar

Without a model, telecom is a black-box line item. With a model, it becomes a lever you can optimize. See the cost of a connected minute for why rate card comparisons understate the real difference.

Step 1: Gather Your Inputs

You need six numbers to build the model. All are available from your dialer reporting:

If you do not have these numbers available, use these conservative defaults: 500 dials/day, 150 min talk time/day, 15% connect rate, 10% VM rate, $0.0085/min.

Step 2: Calculate Billed Minutes Per Agent Per Day

This example produces 5,520 billed minutes per seat per month — below the flat-rate break-even of 11,647 minutes. Per-minute billing is likely cheaper for this profile.

Step 3: Calculate Per-Minute vs Flat-Rate Monthly Cost

At these inputs, per-minute saves $52.08/seat/month. At 30 seats, that is $1,562/month. The case for flat-rate does not emerge until dial intensity increases significantly.

Now run the same model with higher intensity inputs: 900 dials/day, 240 min talk time, 20% connect rate, 15% VM rate:

Still below break-even. Per-minute wins at $68 vs $99. Push dials to 1,200/day with 25% connect rate and aggressive pacing, and billed minutes reach 14,000+/month — above the crossover. The model tells you exactly where your operation sits.

Step 4: Calculate Effective Cost Per Conversation Minute

This is the metric that connects carrier cost to business output:

`` effective_cost_per_conv_min = monthly_carrier_cost / (avg_talk_min_per_day × working_days) ``

For the high-intensity example at flat-rate: `` $99 / (240 min × 20 days) = $99 / 4,800 = $0.0206/conversation minute ``

For the same operation on per-minute: `` $68 / 4,800 = $0.0142/conversation minute ``

Per-minute is cheaper per conversation minute at this dial intensity. At 14,000 billed minutes (where per-minute costs $119): `` Per-minute: $119 / 4,800 = $0.0248/conv min Flat-rate: $99 / 4,800 = $0.0206/conv min ``

Flat-rate wins. The crossover in effective conversation-minute terms is near the 11,647 billed-minute threshold.

Step 5: Calculate Cost Per Outcome

The most useful version of the model connects carrier cost to the business outcome you are tracking — appointment booked, deal closed, payment collected.

At $0.55 in carrier cost per appointment booked, the telecom contribution to cost of acquisition is negligible. The model reveals this — and it also reveals how sensitive the number is to connect rate and conversion rate changes.

A drop from 20% to 12% connect rate, holding all else equal:

• Conversations: 900 × 12% = 108/day
• Monthly outcomes: 108 × 5% × 20 = 108
• Carrier cost per outcome: $99 / 108 = $0.92/outcome

The telecom cost per outcome nearly doubled from list quality degradation alone.

Step 6: Sensitivity Analysis

Run the model at three scenarios — pessimistic, base, optimistic — to understand the range:

The flat-rate decision is a bet on sustained dial intensity and moderate-to-poor list quality. If your list quality is consistently high (connect rates above 25%), per-minute may be structurally cheaper. See when per-minute actually wins for those scenarios.