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900 lines: a new twist in tech support.

When deregulated phone companies began setting up 900-line exchanges a few years ago, the first customers to sign up were heavy-breathing-for-pay services, horoscope vendors, and teenage chat lines. Software developers didn't immediately grasp the notion that 900 lines also could be used to bill customers for fee-paid tech support Calls--but the idea finally seems to be catching on. Already this year, at least three companies--Aldus, Lotus, and Buttonware--have announced new 900-line programs. Dozens of other plans, we suspect, will be unveiled in the next year or so.

To get a better sense of how 900-line service will affect the software industry, we talked with tech support and marketing managers from the three software companies that have broken the ice in this area. So far, we found, nobody has much real operating experience with 900 lines. Buttonware is the only company that has actually put a 900-line support program in place, and Buttonware's experience is barely three weeks old. Aldus expects to activate its new 900-line service as this issue goes to press, and Lotus is still working on the details of what it describes as a "pilot program."

Nevertheless, all three companies have invested a fair amount of time in researching and planning their 900-line services. Here's what we found are the key issues:

* Customer acceptance. will 900-line charges antagonize customers?

All three companies worried about this issue, but apparently

there isn't much resistance to the idea of fee-paid support.

Aldus's director of customer service, John Archdeacon, told us

his support technicians polled callers for several months about

a 900 line. "They were surprised at how many customers were

willing to pay." Jim McMullen, Lotus's director of customer

support, says one goal of his pilot program is to measure

acceptance "before we go off the deep end," but he adds that

"early indications have been pretty favorable." And Buttonware

marketing manager Dee Dee Walsh says that in the first three

weeks of operation, her company's 900-line program has generated

only one serious complaint. "We talked for a while, and even he

wasn't absolutely roasted by what we were doing."

* Price. Buttonware's program charges callers at a rate of

$1/minute, with the first minute free. Lotus hasn't set a firm

price yet, but McMullen says the rate will probably be "in the

vicinity" of $2/minute. Aldus's pricing is the most interesting:

Callers are charged a flat $15 regardless of the length of the

call. Archdeacon explains that the $15 figure is based on an

average call length of ten minutes, so the effective rate is

about $1.50 a minute. "I didn't want us to get into the issue of

how long it takes us to answer a question," he says. "Sometimes

I'll win, and sometimes I'll lose."

* Profitability. The cost of a 900 line varies considerably,

depending on which telephone company provides the service. Aldus

pays MCI 25 cts/minute plus $1.50 per call. Walsh says Buttonware

pays 60 cts-70 cts a minute to US West. ("The phone company's making

out like a bandit," she says.). Lotus uses AT&T and won't

comment on the price it pays, though McMullen says Lotus's terms

came straight off the AT&T rate card. In addition, most 900-line

service vendors charge monthly minimums and fairly steep set-up

charges. In a few cities, we've found that 900-line brokers can

provide smaller customers with more flexibility than they get in

dealing direct with Ma Bell and her sisters. But our guess is

that competition among phone companies will very quickly force

prices down to more attractive levels.

* Service standards. Walsh says one reason Buttonware decided to

try a 900 line was that the company's free support service had

reached a crisis situation, but we couldn't afford to keep

growing the support department." The company's phone lines were

choked, and Walsh says the support staff spent most of its time

fielding questions about DOS and non-Buttonware titles. Now that

Buttonware is charging for support by the minute, she points out

that quality standards have to be higher. one solution, she

says, is to make sure callers are never put on hold. "They'll

get a busy signal if everybody's occupied--though so far nobody

has hit a busy signal yet."

* Fit with other plans. All three companies say they'll continue

to offer some form of free support, supplemented by alternative

forms of paid support. Buttonware says it will honor its former

policy of a year of free support for products purchased in 1989;

starting in 1990, however, the free support period will drop to

90 days. Aldus has revamped its entire support program and now

provides 90 days of free support (up from 45 days), plus a

choice of annual contracts priced between $89 and $149. Lotus

offers six months free, then a choice of contracts priced at $49

and $79. Archdeacon points out that only about 25% of Aldus's

support calls come from customers who aren't covered by the

initial free support period or paid contracts. "We estimate that

about half of these people will opt for 900 service," he says.
COPYRIGHT 1990 Soft-letter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Soft-Letter
Date:Feb 3, 1990
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