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The Last Round-Up: Dialog to Eliminate DialUnit Round-Up in September
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Posted On August 17, 1998
Responding to widespread negative reaction from customers, the Dialog Corporation has announced that it will eliminate "rounding-up" to the nearest whole DialUnit at the end of each search. The change will occur September 1. Dialog and DialogWeb customers will pay only for the precise amount of DialUnits that they consume during their searches, calculated to 0.001 of a DialUnit. The key impact of these changes, according to Dialog, will be "a dramatic reduction in the cost of quick and simple Dialog searches, which tended to have a higher cost under the pricing plan introduced in June."

In another pricing modification, Dialog will terminate DialUnit charging for administrative commands. This will bring the charging algorithms into alignment with Dialog's stated goal when it introduced DialUnit charging in June—to "allow users to prepare search strategies, read documentation (Blue Sheets) and help screens, view free formats such as title lists, browse search results already on screen, configure Alerts, set delivery options, and establish user preferences, at no charge." Though the elimination of connect-time charging had substantially reduced charges for such activities, some DialUnit charges still occurred for the administrative command stage of the search process.

Under the revised DialUnit charges, the following administrative commands used for basic maintenance functions will not generate DialUnits, regardless of which file the user is in when executing the command: Cost, Display Sets, Edit (including commands used within the online editor like Change, Copy, Delete, Insert, List, Move, Query, Quit, Renum, Save, Edit Email, Edit Address), Help, Formats, Keep, Logoff (Logoff Hold), Recall, Release, Save, Set, Show, and all the commands preceded by these terms.

In announcing the changes, Dialog added that it "remains committed in its efforts to offer customers the most competitive and simplified pricing plan possible. Dialog is grateful for the feedback it has received on its new pricing plan from customers. The decision to implement these pricing changes was brought about by the company's recognition of the need to refine the DialUnit pricing structure to ensure the most cost-effective searching on Dialog." Dialog still recommends flat-fee or subscription payment plans to customers who want more predictable budgeting.

The latest announcement indicated that "some selected files will have minor DialUnit adjustments to reflect these changes." At press time, a Dialog representative told us that the minor adjustments would affect the 21 files for which they reduced charges in July. (See previous NewsBreak, "DataStar Back from the Dead and Without DialUnits; Minor Adjustments in DialUnits for Dialog Itself.") One would expect DialUnit charges for these files to move upward somewhat. For further details on changes in the DialUnit pricing changes, check Dialog's Web site at http://www.dialog.com/pricing/pricing_faqs_1208.html.

Reactions

Most of the horror stories circulating among Dialog customers about the new DialUnit pricing stem from "rounding up" problems, where the addition of a DialUnit for a quick search can double, triple, or quadruple the charges under pre-DialUnit pricing. How will Dialog's market react to this correction? We interviewed the two searchers on the forefront of the problem—Reva Basch and Mary Ellen Bates, both of whom have done in-depth, before-and-after studies of DialUnit pricing (Reva Basch, "DIALing for Dollars: Dialog's New Pricing Structure and the DialUnit Debacle," Online, September 1998, http://www.onlineinc.com/dialog/basch.html; Mary Ellen Bates, "Dialog's DialUnits: A Price Increase in Sheep's Clothing," Searcher Magazine, September 1998, http://www.infotoday.com/searcher/sep/bates.htm).

Reva Basch applauded the elimination of the round-up as "definitely the right move, the right response. Thank God they saw the light and did the right thing." On the other hand, Basch's initial wave of relief was quickly jerked back by caution. She remains "very curious how it will translate to the bottom line. My first reaction is to check it. There have been so many false strategies and missteps in implementing and adjusting [the new pricing]."

Mary Ellen Bates was "very pleased that Dialog finally responded to the public comments about the inequity of rounding up DialUnits. It's disappointing that they took this long to correct a problem that we anticipated even before DialUnits were rolled out. And of course I find it disingenuous that they refer to this as simplifying our pricing' when all they're doing is correcting something that they surely knew was inappropriate from the beginning." On a happier note, Bates was "gratified that they listened to the complaints and comments of expert searchers and eliminated unfair DialUnit pricing for administrative commands." This, along with "finally deciding the rounding up made no sense," should make Dialog "more competitive with all the other search services out there."

Bates did voice concerns over the "predictability" Dialog attributes to subscription contracts. The dramatic changes and turmoil in pricing that started in May, according to Bates, would make it very difficult for a search operation manager to predict the impact of a flat-fee. The "boilerplate" contract offers a basic price increase of 10 percent over the previous year's charges, though Bates admits that many operations negotiate their own special deals. If the new DialUnit price changes bring the average cost back to a revenue- neutral or lower increase, instead of the estimated one-third bump that Bates' and Basch's analyses showed, then searchers could find it cheaper to stay in transactional mode. The bottom line, said Bates, is "Who knows? Contracts and flat fees are not useful in an environment of uncertain pricing information."

From a broader standpoint, Dialog also faces the task of mending fences with a customer base that grew angry and distrustful. Basch believes that "the market will settle down, and, if we assume that non-rounding' works out the way we expect it will, I think people will stick or drift back to Dialog because of the huge reservoir of habit and good results in the past. This is Dialog's second chance, but something has changed unalterably. Dialog the company is seen differently. There is no longer an unquestioned assumption that they are a partner or ally. It's like infidelity in a personal relationship; even after confession and a return to the fold, the crack may be mended, but it's still there." Nonetheless, Basch considers that "Dialog did the best thing it could do under the circumstances. The customers who remain, however, will really keep Dialog on their toes, now that the reservoir of good will has been depleted. They will ask a lot harder questions, and be a lot more skeptical and a lot pushier."


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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