Quick answer: An AI answering service uses artificial intelligence to handle phone calls for your business—answering questions, capturing leads, booking appointments, and transferring calls to humans when needed. Unlike voicemail or basic auto-attendants, AI answering services like Iris AI from Sandos Solutions can hold natural, real-time conversations in 40+ languages.
If you've ever called a business after hours and reached a robotic voice that couldn't understand what you wanted, you know how frustrating automated phone systems can be. For years, businesses faced a tough choice: pay for expensive 24/7 human receptionists, or settle for voicemail that customers often hang up on.
AI answering services change that equation entirely. They're not the clunky phone trees of the past. Today's AI can actually talk with your callers, understand their questions, and provide helpful responses—all without a human on the other end.
How Does an AI Answering Service Actually Work?
Modern AI answering services use something called real-time speech recognition combined with large language models (the same technology behind ChatGPT). Here's what happens when someone calls a business using an AI answering service:
- The call connects instantly. There's no "Please hold" or waiting in a queue. The AI picks up immediately.
- The AI listens and understands. Using advanced speech recognition, it converts the caller's words to text in real time.
- The AI processes the request. It understands the intent—are they asking about hours? Wanting to book an appointment? Reporting a problem?
- The AI responds naturally. Using text-to-speech technology, it responds in a natural voice, often with less than one second of delay.
- The conversation continues. The caller can ask follow-up questions, and the AI maintains context throughout the entire call.
What makes this different from the old "Press 1 for sales, press 2 for support" systems is that callers can speak naturally. They don't have to remember menu options or repeat themselves. The AI understands phrases like "I need to reschedule my appointment for next Tuesday" just as well as a human receptionist would.
What Can an AI Answering Service Do?
The capabilities vary by provider, but advanced AI answering services like Iris AI can handle a surprising range of tasks:
- Answer FAQs about business hours, location, services, and pricing
- Book appointments by integrating with Google Calendar or Calendly
- Capture leads with contact information and notes about what they're interested in
- Transfer calls to a human when the caller requests it or the situation requires it
- Send follow-up texts with confirmation details or additional information
- Handle multiple languages—Iris AI supports over 40 languages
- Record and transcribe conversations for quality assurance and training
AI Answering Service vs. Traditional Options
To understand why AI answering services are gaining popularity, it helps to compare them with traditional alternatives:
| Feature | Voicemail | Human Answering Service | AI Answering Service |
|---|---|---|---|
| 24/7 availability | Yes | Varies | Yes |
| Handles conversations | No | Yes | Yes |
| Books appointments | No | Sometimes | Yes |
| Instant response | Yes | May have wait | Yes |
| Multilingual | No | Limited | 40+ languages |
| Cost per month | $0-20 | $200-2,000+ | $450-1,500+ |
The sweet spot for AI answering is businesses that get too many calls for voicemail to work, but not enough to justify a full-time receptionist. That said, even large companies are using AI answering services to handle after-hours calls and overflow during busy periods.
Is the AI Really That Good?
This is the question I get most often. And the honest answer is: it depends on the provider.
Some AI answering services are still using older technology that sounds robotic and struggles with anything beyond basic scripts. But the best services—those using OpenAI's Realtime API, like Iris AI from Sandos Solutions—have crossed a threshold where many callers genuinely can't tell they're talking to an AI.
The key factors that determine AI quality include:
- Response latency: The delay between when you finish speaking and when the AI responds. Under one second feels natural; over two seconds feels awkward.
- Voice quality: Does it sound like a robot reading text, or like a person having a conversation?
- Context handling: Can the AI remember what you said earlier in the conversation?
- Interrupt handling: If you start talking while the AI is speaking, does it stop and listen, or does it talk over you?
When I was building Iris AI at Sandos Solutions, these were the problems I was obsessed with solving. After working on precision systems for NASA projects, I knew that "good enough" wasn't going to cut it for business communications.
What About Security and Compliance?
For businesses in healthcare, legal, or finance, security isn't optional. Any AI answering service worth considering should offer:
- Encryption for calls and transcripts
- HIPAA compliance options for healthcare
- GDPR compliance for businesses with European customers
- Audit logs showing who accessed what data
- Configurable data retention and deletion policies
Sandos Solutions' Iris AI was built with these requirements from the start, not bolted on as an afterthought. Coming from an engineering background where security failures could have serious consequences, I made sure that Iris AI meets enterprise standards out of the box.
How Much Does an AI Answering Service Cost?
Pricing varies significantly across providers. Some charge per minute, others charge flat monthly fees. At Sandos Solutions, Iris AI pricing starts at $450/month for 450 minutes of conversation time. That might sound like a lot compared to a $20/month voicemail service, but consider:
- You're capturing leads that would otherwise hang up on voicemail
- You're booking appointments without human intervention
- You're providing 24/7 availability without paying for night shifts
- You're handling multiple calls simultaneously
For most businesses, the ROI comes from leads that don't slip through the cracks. If your average customer is worth $500 and you capture just two additional customers per month, the service pays for itself.
Is an AI Answering Service Right for Your Business?
AI answering services work best for businesses that:
- Miss calls because staff is busy with other tasks
- Get calls outside regular business hours
- Have predictable FAQs that callers ask repeatedly
- Need to book appointments or capture leads
- Want to reduce time spent on routine phone calls
They're less ideal for businesses where every call requires highly specialized expertise that can't be documented, or where the personal relationship with a specific human is the core value proposition.
Getting Started
If you're curious about AI answering services, the best next step is to experience one firsthand. At Sandos Solutions, we offer demos where you can actually call Iris AI and have a conversation. You'll hear for yourself what modern AI voice technology sounds like.
The technology has reached a point where the question isn't whether AI can handle business calls—it's whether you can afford to keep missing calls while your competitors adopt it.
Johnathan Sandoval is the founder of Sandos Solutions and creator of Iris AI. With 7+ years supporting NASA projects and over a decade of software development experience, he brings precision engineering to business communication technology.