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Dialog Starts Rollout of New Connect-Time Pricing, Completes Simplification of Sales Contracts
Posted On October 22, 2001
On November 1, Dialog Corp. ( will announce the fees for searching databases under the new connect-time pricing plan. Originally released in late June, the new plan forms part of a 2-year project to revamp pricing and strengthen customer relations. Designed for implementation in January 2002, the connect-time pricing will exist in parallel with the older DialUnit system. According to Dialog president and CEO Roy M. Martin Jr., one constant during the planning and testing of the new system was the intent to remain "highly competitive."

Users will be able to switch the pricing option from one search session to the next by changing their user profiles. "Our goal is to nurture long-term relationships with our customers," Martin said. "To do that, we need to give them the ability to craft their relationship with us on their terms, according to their needs. Our new pricing plans will help our customers define their own ways of maximizing the value of Dialog and DataStar in their professional lives."

Martin told me that the connect-time pricing will not incorporate telecom charges. Also, royalty fees for search results will remain a separate billing charge, and at the same rates as DialUnits.

In June, Dialog announced that the connect-time pricing would go into effect in October, but the company decided it needed more time to educate customers on the potential impact of new pricing alternatives on budgets and billing. During the next 2 months, Dialog account executives will conduct preview demonstrations with clients. They will also continue to collect customer feedback, adjust interfaces, and accommodate final changes from database providers. Proposed connect-time rates will be published on Dialog's Web site on November 1 (, with final rates set in mid-December and implementation on January 1, 2002. By mid-November, Dialog should have the pricing "turned on" for demonstrations and previews with selected clients.

Major changes in DialUnits, the relatively unpopular and unpredictable current pricing plan based on algorithmic assessments of system resources used by specific commands and functions, have already occurred. They went into effect on October 1, according to Martin. He indicated that the changes are revenue-neutral for Dialog, though customers may experience budget impacts depending on use of specific types of searching with specific files. Technical enhancements have made the DialUnit option consistent across different Dialog platforms, in particular, Dialog Classic, DialogWeb, and DialogClassic Web. Other system enhancements have improved the speed of delivering search results. (For a rate list of current DialUnit charges, go to

Martin predicted that most users would only experience relatively minor increases or decreases "except in the case of DialogClassic Web.… All DialogClassic Web users should enjoy a significant price decrease."

In my June 26, 2001 NewsBreak ("Dialog Announces Long-Awaited Price-Structure Changes";, Mary Ellen Bates noted the wide variation in search costs that occasionally tripled the cost of a DialogClassic Web search from that on other platforms. I was reliably informed that Dialog's internal testing of the new pricing models incorporated Bates' tests for Searcher magazine with other standing Dialog benchmark tests. (As soon as the new pricing becomes available, Bates plans to run her own tests for publication in an upcoming issue of Searcher magazine.)

Searcher behavior should best drive the decision on which pricing to use, according to Dialog staff. Deciding on the most economical choice between the "clock time" of connect-time pricing, which tracks usage by the minute, and the "work time" of DialUnits, which tracks by commands performed and complexity of searches, depends on personal style and the specifics of individual searches. In general, experienced, swift searchers or searchers performing quick in-and-out searches, such as searching for a known citation or author, might prefer connect-time pricing. Infrequent or new users who need to use helps or those working on unfamiliar topics who like to browse search results online might prefer DialUnits.

The new pricing works for both the Dialog and DataStar product families. Customers will be able to choose from within three new plans: Dialog Transact, Dialog Advantage, and Dialog Enterprise. Benefits depend on the specific plan the customer selects with varying terms such as discounts, multiyear options with price protection, full or partial access to Dialog files, and fixed monthly payments. In June, Dialog revised and simplified its sales contract, eliminating legalese. The sales-related documentation that a typical customer receives when first signing a contract with Dialog now runs four pages or less.

 "We are delivering on our pledge to offer pricing options that best serve customers' unique information needs and company budgets while simplifying the process of doing business with Dialog," said Martin. "We've listened to our customers, and now we're responding to their requests by offering a significantly streamlined and simplified approach to buying and installing Dialog. The dual foundations of our pricing philosophies are trust and value. The announcements today build solidly on that foundation. At the center of our value proposition to customers are the methods for measuring usage and determining price on our online systems, and providing choices that suit the unique needs of different customers."

All the new sales contract plans—Dialog Transact, Dialog Advantage, and Dialog Enterprise—include, at no additional charge, customer training (declared free worldwide earlier this year), installation, user documentation, monthly technical and training newsletters, annual database catalogs, and ongoing phone support through the company's Knowledge Centers. Dialog Transact is basically a rewritten version of the standard contract with time/material and value calculations. Dialog Advantage sets monthly fees with discounts starting at $1,000 (approximately the equivalent of a year's worth of the $75-a-month minimum on the Transact option). Dialog Enterprise is a true flat-fee program with access to all content for an annual fee, usually paid monthly. On the subscription packets, the company may offer multiyear arrangements that let users set price changes for the second year in advance. Again, Martin pointed out, the "latter two plans are composites of different agreements already in place, but neither is a one-for-one match with earlier contracts. We dismissed things that proved disadvantageous to customers, while matching that with financial prudence on our part. They balance value."

Dialog now also offers Dialog Consulting Services worldwide to help customers integrate Dialog products with customer intranets, by using the Dialog IntraIntelligence line of products, an enhanced and renamed expansion of the Dialog Intranet Toolkit. According to Martin, the Consulting Service employs about 17 people full time who primarily help clients with intranet work by embedding content. In the U.S., most of the clients are large customers, but in Europe Dialog has customers of all sizes using the service.

Pricing initiative developments will continue next year, with the next round of changes scheduled to be announced in the first quarter of 2002. "Now that the basic elements of measuring customer usage are in place," Martin commented, "we will focus on the various existing fee structures that are part of the Dialog pricing model, as well as the development of new pricing programs and structures for all Dialog product-line platforms. Our pricing transformation will continue, with ongoing progress being made in a structured and disciplined fashion."

According to Martin, one interesting new development is that Dialog is considering a return to the date and time-of-day invoicing abandoned under the former owner. This would once again allow searchers to use their Dialog billing to accurately verify charges from their own records and to better cross-bill clients.

Martin stated: "We will build on the new initiatives done this year. In January we may announce a way that a customer can get an estimate of DialUnit calculations before they do the search." Martin also indicated that the company was looking at a lot of possible innovations, now that the basic pricing structures are in place, such as seat-based pricing, subscriptions by files or groups of files, specific sector products, etc.

Dialog, a Thomson subsidiary, provides a wide array of data covering business, science, engineering, finance, news, the arts, humanities, and social sciences. Its products and services, such as Dialog, Profound, and DataStar, cumulatively carry more than 6 billion pages of information. In business for over 30 years, Dialog sells primarily to corporate and government markets. Its products are used by over 20,000 corporate clients in over 100 countries. Based in Cary, North Carolina, since the M.A.I.D. ownership days, which ended in May 2000, the company has offices in 30 countries.

Barbara Quint was senior editor of Online Searcher, co-editor of The Information Advisor’s Guide to Internet Research, and a columnist for Information Today.

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