A 900 number is a calling service that charges customers for information delivered over the phone. Although the concept has been battered in the past by scams and negative press, 900 numbers have quietly gained acceptance as a practical way for firms to provide detailed technical help or post-warranty support to their customers.

900 numbers are an excellent way to charge support costs to customers who actually need the extra service. Rather than raise prices to cover rising support costs, many firms have turned to 900 numbers as a simple yet effective way to directly bill for phone assistance.

900 numbers offer the convenience of automatic billing, with charges sent to users through their regular phone bills. This can be especially helpful when services are too inexpensive to justify the costs of separate billing.

Implementing a 900 number is a delicate task, however. Firms should be careful to avoid offending their existing customers, particularly those who are accustomed to certain levels of free support. Since 900 numbers are not necessarily considered to be that reputable, businesses considering using them should be very careful to think through the cost and benefits of the service before implementing a program.

This guide is designed to give you the facts you need to set up a 900 number for your business. The various sections are listed in the box above. You can choose to read this guide from beginning to end, or jump directly to a section of interest.

How They Work

To use a 900 service, a caller dials a telephone number that uses 900 as the area code. Immediately upon connecting, the caller will hear a preamble explaining how the call will be billed. This is designed to allow the caller time to hang up before charges begin to accrue.

After this message, callers can be handled by a dedicated 900 service center or directly routed to your company's offices.

How Calls are Billed

Calls made to 900 numbers can be billed in one of two basic ways.

Most services charge callers according to the number of minutes spent on the phone. This fee can entail a constant per minute charge, or can vary, with the first few minutes costing a certain amount and the following minutes assessed at a different rate.

Calls can also be billed on a flat rate, which results in a set charge regardless of the amount of time the caller is on the phone.

Most calls are billed on the caller's local telephone bill. However, some 900 numbers allow the caller to bill the call directly to a major credit card.

About Providers

Companies interested in setting up a 900 number can choose either to work directly with a carrier or to sign up with a service bureau.

Working directly with a carrier is generally an option only for larger companies that have an advanced PBX phone system. You will typically require an automated attendant system to answer incoming calls and alert users to the charges, plus automatic number identification capabilities to identify the number that will be billed for the call. In most cases, this will require a direct T1 connection between your phone system and a long distance carrier, which will cost several thousand dollars to install and maintain on a monthly basis.

Most smaller companies will want to work with a service bureau. These companies have already made the investment in phone equipment and lines, and have 900 numbers available for almost immediate use. A 900 service bureau not only provides access to a 900 number, but can also help design a program that will comply with all regulatory requirements. Service centers can also provide office space and support for smaller companies unable to support a full calling center in their own offices.

Choosing a Provider

There are several points to consider when evaluating service bureaus. These include the system capacity, service offerings, and company experience.

First, make sure that the service bureau will be able to handle the expected call volume during peak calling periods. Peak periods can arise during certain times of the day, or after a radio or television commercial. The service bureau should have enough lines and personnel to handle all the calls you expect to receive in these situations.

Another area to evaluate is the service offerings of the 900 bureau. Examine areas such as call handling capabilities, program design assistance, regulatory knowledge, and billing reports. Ideally, the service bureau should have previous experience with the type of program you would like to implement. Even better is a firm that already has similar 900 offerings currently in place.

It can also be useful to experience the service from a customer's perspective. Call other services hosted by the provider to get a sense for how well these services are implemented. Check into the collections process for delinquent customers and make sure it suits your customer base.

Finally, look into the company's background. This is particularly important since the 900 service business has not earned a strong reputation for honesty. Learn about the firm's clients, and how long they have been in business. You should also thoroughly check references.

Legal Requirements

In order to combat burgeoning problems with pay per call services, the Federal Trade Commission (FTC) passed the Telephone Disclosure and Dispute Resolution Act (TDDRA) in 1993. This act sets specific requirements for advertising and operating 900 number services to prevent deceptive billing practices.

For example, all numbers that cost more than $2 per call are legally required to warn callers about these charges during the introduction, or preamble. Callers should be allowed the opportunity to hang up without being charged when calling these numbers.

Any service bureau you use should be able to guide your firm through the specifics of the Act to ensure that your 900 program is in compliance.

Pricing

Working with a service bureau costs between $1,000 and $2,500 in initial capital. On an ongoing basis, you will generally need to pay monthly fees and per minute charges based on the call volume received. In addition, there will usually be a carrier commission of 10%-15% of gross revenue. The total amount paid to the carrier and service bureau usually totals close to $1 per minute.

Special Tips

Prepare an Alternative
Keep in mind that many companies block calls to 900 numbers on their phone systems. You may want to provide an alternative route for people to reach you, such as credit card billing via a regular or toll-free line.

Let Callers Dial Direct
Avoid shared 900 numbers that require callers to dial an extension to reach your service. This can result in misdialed numbers and greater difficulties in resolving billing disputes.

Know Your Bargaining Power
Rates and terms are almost always negotiable. Talk with multiple bureaus to increase your leverage in bargaining discussions.

Other Sources for Help
The publisher of Audiotex News (800/735-3398) also offers various titles about the 900 industry, including "The Directory of 900 Service Bureaus: How to Select One" and "Promoting Your 900 Number." They also can refer you to service bureaus with specialties in particular areas.