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A model for multi-copy ownership.

Despite all the talk about "volume buyers" these days, surprisingly few software companies actually know much about the people who buy multiple copies. One exception is Qualitas, a developer of memory management utilities (386Max and Blue Max) that are often bought by in-house PC gurus for use by all the members of a department or workgroup. Earlier this year, Qualitas executive vice president Reid Conrad decided to take a closer look at his company's registration card database, to make sure an upcoming upgrade offer wouldn't neglect multi-copy buyers--"our most committed customers."

Even though 386Max is probably a title with above-average multi-copy ownership, Conrad nevertheless found that more than 938 of the company's retail customers were the owners-of-record of just one copy of the program. (Qualitas also had a direct corporate program for sales of 25 or more units; these users were tracked separately.) Moreover, the typical Qualitas multi-copy owner was hardly a volume buyer in the usual sense. Conrad's data showed that over half of the company's multi-copy customers (48 of total users) were owners of two copies; less than 38 of all Qualitas retail customers were owners-of-record for three or more copies. (Conrad points out that registered users aren't always the original brand specifiers or purchasing agents. "But for an upgrade, what counts are the names of registered users.")

However, when Conrad counted the number of units that this handful of multi-copy customers represented, the picture changed dramatically. Although multi-copy users represented only 78 of the names in the Qualitas database, they accounted for 228 of retail copies--clearly, a critical segment of the company's installed base.

Based on these numbers, Conrad implemented a segmented approach to the company's upgrade campaign. Users who owned one to nine units were sent a conventional direct mail offer, but were also given a list of the serial numbers for the copies registered in their name and a discount for purchasing additional copies. Multi-copy owners of 10-25 units received a more elaborate upgrade kit and a personalized letter. Finally, owners of 25 or more copies received an even more aggressive pitch, followed by a telemarketing call.

Conrad says the final results aren't yet in, but there's no doubt that the segmentation strategy is working. "Not only have more upgrade units been sold, but multi-copy user response rates have averaged 508 higher than single unit response rates," he says.

Reid Conrad, executive vice president, Qualitas Inc., 7101 Wisconsin Ave., Bethesda, Maryland 20814; 301/907-6700
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Title Annotation:Qualitas Inc. strategy for selling upgrades to multi-copy users
Date:Oct 31, 1992
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