Classmates.com 2006 Annual Report Download - page 11

SEASONALITY
Our access services have experienced higher usage and a higher rate of new registrations during the March quarter when compared to other
quarters. While this increases our Communications cost of billable services and advertising inventory in the March quarter when compared to
other quarters, the impact on our costs and revenues has not been significant. Revenues from our loyalty marketing business have been higher in
the December quarter when compared to other quarters, resulting in higher advertising revenues in the December quarter when compared to
other quarters. We do not know if these seasonal trends will continue.
BILLING
The vast majority of our pay accounts pay us in advance with a credit card. Other payment options for some of our pay services include
ACH, personal check or money order, or via a customer’s local telephone bill. Pay access accounts that elect to pay with a personal check or
money order are not provisioned until their payment is received and they are required to subscribe for one of our prepaid multi-month billing
plans.
We utilize a combination of third-party and internally developed software applications for customer billing. Customer billing is a complex
process and our billing systems must efficiently interface with third-parties’ systems, such as our credit card, ACH and telephone bill processors’
systems. Our ability to accurately and efficiently bill and collect payment from our accounts is dependent on the successful operation of our
billing systems and various third-party processors. In addition, our ability to offer new pay services or alternative payment plans is dependent on
our ability to customize our billing systems.
CUSTOMER SUPPORT AND RETENTION
We believe reliable customer service and technical support are important to retaining our customers. Our customer relationship
management and support infrastructure includes employees at our facilities in Hyderabad, India; Woodland Hills, California; Fort Lee, New
Jersey; Renton, Washington; San Francisco, California; and Orem, Utah. However, we outsource substantially all of our telephone support and
some of our email support to third parties.
We offer a variety of online and offline “self-help” tools for our services, designed to provide comprehensive tutorials, advice, tips, step-by-
step solutions and answers to frequently asked questions. These self-help tools are also designed to assist users in updating and verifying billing
information, downloading and operating our software and setting up their accounts. We also offer live telephone technical support for our access
services billed on a per-minute basis and telephone billing support for free. We monitor the effectiveness of our user support functions and
measure performance metrics such as average hold time and first call resolution and abandonment rates.
In addition, we provide traditional email support for our services. Communications with users are logged and categorized to enable us to
recognize and act on trends. An internal quality assurance team monitors the performance of our vendors and provides feedback to improve their
skills and establish consistency throughout our customer support functions.
TECHNOLOGY
Our services are generally provided through a combination of internally developed and third-
party software, industry standard hardware and
outsourced network services. We have developed software to enhance the functionality of certain components of our services, including
connectivity, Web services, billing, email, customer support and targeted advertising. We maintain data centers in multiple locations around the
country with, in many cases, redundant systems to provide high levels of service availability and
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