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How Great American sells support.

Back in 1986, Ashton-Tate sent ripples through the industry by switching to a fee-based support system (Soft-letter, 8/21/86). Suddenly, developers realized that one of their worst financial sinkholes might someday become a real profit center.

But the transition to fee-based support turned out to be tougher than it seemed. So far, only a handful of companies have put successful systems in place. One of these is Great American Software, a $2.7 million developer of small business accounting packages, which recently told us the inside story of their recent switch to a $125/year support program. "We started with a mindset that we were going to improve service, not just make money," Bays Steve Wolfe, Great American's technical support manager. "I think that's the key to why the whole process worked so well for us."

Wolfe says Great American started planning its fee-based system a year ago. The first step was to spend $250,000 on new telephone and computer systems ("and we're still investing," he adds). A major goal was to route calls more efficiently to support technicians, so that customers wouldn't get busy signals or be put on hold for long periods of time. Great American now has 14 toll-free lines, which Wolfe says will "comfortably" handle about 200 calls per day. (During peak periods, a few callers are still put on hold, but never for long; after four minutes, they're promised a callback--usually within an hour.)

Great American's telephone system is tied in with a database that automatically retrieves a caller's support history, system profile, and product ownership. If that information isn't already on file, Wolfe notes, the system first routes the call to a switchboard operator, who keys in the data. "Our technicians now handle a lot more calls than they used to, but they actually spend less time on the phone and more on training and research," says Wolfe.

Once these new systems were in place, Wolfe says the company rolled out a marketing program for its support services that "we really believed added a lot of value." starting in the fall, the company sent letters to its 35,000 registered customers, warning them that free support would be replaced in January by two programs--a $125/year contract that offered unlimited toll-free support, and an "a la carte" option that would cost $1.50/minute (with a $15 minimum). in addition, support customers would get free updates, discounts on major upgrades, access to a bulletin board, and a newsletter.

So far, says Wolfe, the conversion has gone smoothly. The direct mail campaign signed up 30% of Great American's 20,000 active users (another 15,000 buyers have sent in registration cards but aren't currently using the product). New customers are also buying service contracts; 10%-15% sign up immediately, and Wolfe expects many of the holdouts will join the plan once they use up the 30 days of free support that new buyers get .

Wolfe admits that delivering a premium level of support has raised Great American's own costs substantially. Tech support staffing now includes Wolfe, a switchboard operator, six technicians (plus a part-timer), and two dealer-service people. Manpower and telephone charges add up to $40,000 a month--almost triple the amount Great American used to spend on free support. Nevertheless, says Wolfe, the fee-based program looks like it will become at least self-funding. "After four months, we're already teetering on the brink of breaking even," he says.
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Copyright 1989, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Great American Software Inc.
Publication:Soft-Letter
Date:Apr 15, 1989
Words:575
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