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Why upgrade campaigns bog down.

The good news about upgrade offers, says Jordan Levy Jordan Levy is a Jewish American politician and talk show host from Worcester, Massachusetts. He has served as the Mayor of Worcester on two occasions, first from 1981 to '82 and the second time from 1988-93. , is that they usually generate "a flood of money" from a company's installed base. The bad news is that that same influx of orders can crash the phone system, bring chaos to the shipping department, and antagonize thousands of once-loyal customers. "Multiply mul·ti·ply
1. To increase the amount, number, or degree of.

2. To breed or propagate.
 lots of little problems times 20,000 or 50,000 orders and you've got a real crisis," he says.

Convinced that upgrade fulfillment ful·fill also ful·fil  
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils
1. To bring into actuality; effect: fulfilled their promises.

 will become an increasingly serious problem for software companies, Levy last year created the Upgrade Corporation of America, which he claims is already the industry's "largest third-party upgrade processing company." Levy seems to have spotted a genuine problem: More than 20 blue-chip clients currently rely on UCA to handle upgrade telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. , order processing, and fulfillment.

Levy argues that third-party companies like UCA are likely to do a better job of upgrade processing because they can afford state-of-the-art mail-order systems and don't rely on short-term, temporary employees. But Levy admits that much of UCA's success depends on knowing how to avoid several obstacles that often get upgrade campaigns in trouble:

* Abandoned calls: Typically, an upgrade offer results in a surge of calls that can overwhelm o·ver·whelm  
tr.v. o·ver·whelmed, o·ver·whelm·ing, o·ver·whelms
1. To surge over and submerge; engulf: waves overwhelming the rocky shoreline.

 a company's phone system. "If the volume of calls exceeds the system's capacity, you'll aggravate a lot of people," Levy says. "Moreover, roughly 15% of people who get blocked or abandoned the first time never call back. Those are sales lost forever." (Callers generally won't wait more than 30 seconds to talk to a sales representative, he adds.)

* Information requests: "Only 50%-60% of people actually place an order the first time they call," Levy says. Many of these non-buyers want more detailed information--spec sheets, demo disks, answers to technical questions. "You've got to hire and train people on the phone who are capable of answering questions as well as taking orders, and you should be ready to fulfill ful·fill also ful·fil  
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils
1. To bring into actuality; effect: fulfilled their promises.

 information requests immediately."

* Open orders: When customers offer purchase orders or checks to pay for upgrades, most software companies put the order on hold until the money actually arrives. Levy notes that as many as 20% of these payments "will never show up without prodding, even though the customer was really prepared to pay." To capture the "enormous amount of money that's left on the table," Levy says open orders should be pursued aggressively with invoices and follow-up calls.

* Credit card and check processing: The majority of customers--60%-70%, says Levy--will pay for upgrades with a credit card. Here, the bottleneck A lessening of throughput. It often refers to networks that are overloaded, which is caused by the inability of the hardware and transmission lines to support the traffic. It can also refer to a mismatch inside the computer where slower-speed peripheral buses and devices prevent the CPU  is getting the card approved, "a very time-consuming process" that can be complicated by invalid accounts and errors in recording the card number and expiration date Expiration Date

The day on which an options or futures contract is no longer valid and, therefore, ceases to exist.

The expiration date for all listed stock options in the U.S.
. Handling hundreds of small checks is another "unbelievably" people-intensive process, he adds, in part because a check should be cleared before a company fills the order. As many as 5%-10% of checks will bounce, Levy says. "It's a serious problem."

* Single-copy fulfillment: "Most software companies are used to shipping pallets or truckloads to a handfull of large accounts. It's suddenly very different when they have to ship tens of thousands of onesies," says Levy. An inefficient shipping system can make fulfillment costs skyrocket sky·rock·et  
A firework that ascends high into the air where it explodes in a brilliant cascade of flares and starlike sparks.

intr. & tr.v.
; in addition, upgrade customers tend to judge software companies by their turnaround time (1) In batch processing, the time it takes to receive finished reports after submission of documents or files for processing. In an online environment, turnaround time is the same as response time. . "People don't want to wait three or four weeks when another company ships immediately."

* Order tracking: Especially when shipping is delayed, a lot of customer--about 30%, Levy estimates--will call back to find out what happened to their order. "If you don't have an automated order tracking system, you're going to spend a lot of time and money making those customers happy."

* Returns: As many as 5% of upgrade customers will take advantage of a money-back guarantee (or will discover they ordered the wrong disk format or have a similar problem), says Levy. "It's amazing a·maze  
v. a·mazed, a·maz·ing, a·maz·es
1. To affect with great wonder; astonish. See Synonyms at surprise.

2. Obsolete To bewilder; perplex.

 how many people will call up and complain that they didn't get what they wanted." Getting prompt refunds to these customers is important, in part because credit card companies may impose a $12 fee for charge-backs that involve a customer complaint.
COPYRIGHT 1991 Soft-letter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Date:Sep 4, 1991
Previous Article:Benchmark survey: customer service.
Next Article:Sy Merrin on "Vapor Discounts." (market researcher and president of Merrin Information Services Inc.) (interview)

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