Don in Upstate NY Posted May 14, 2009 Report Share Posted May 14, 2009 Things to ponder ... Apparently TRX is limited to selling 500 copies of ATX. If they sell their full allotment they will gross between $150K and $350K, depending on the mix of $299 and $699 packages. We don't know how much of that goes to CCH, but even if they paid nothing to CCH, how many support people could TRX realistically train and devote to the ATX product without losing money on the product line? What about next year? How much management time and effort should be expended on negotiating to maintain a product line with only 500 customers? Remember, that's 500 customers who are basically loyal to the manufacturer of the product, not to you. On the other side, ask why CCH seems to be more concerned about ATX sales more than sales of their other product TaxWise? We've heard no rumors about any restrictions on the resale of TaxWise, and there even appears to be at least one other reseller out there. Could CCH be making enough money off the sales of TaxWise to their major clients (IRS/VITA/AARP/TCE) that they don't mind some lost sales to individuals and small firms? Link to comment Share on other sites More sharing options...
Randall Posted May 15, 2009 Report Share Posted May 15, 2009 Interesting questions. I've wondered about the business model on both sides of this too. If you believe some of the info a few years ago, there were about 70,000 ATX users. Of course, not all would purchase the full package. CCH must have paid a pretty penny to purchase ATX. So, they need to recoup that with as much profit margin as possible. I can understand why they got rattled with TRX selling the product so cheaply. They were probably hearing a stampede coming. Link to comment Share on other sites More sharing options...
kcjenkins Posted May 15, 2009 Report Share Posted May 15, 2009 Actually, I expect we [this board] are the real cause of the problem. Not intentionally, of course. But I think that TRX saw this board as not an official ATX board, which is true, so assumed they could post on here that they were selling ATX now without it being the same as running an ad advertising the fact in a way that was in violation of the 're-branding' rule. They may not have realized that CCH is familiar with, and monitors, this board. And that they would see the posts here from Braden and Chris as being a violation of the contract. I can see arguments on both sides. Link to comment Share on other sites More sharing options...
Roberts Posted May 19, 2009 Report Share Posted May 19, 2009 Not just CCH but any company needs to look at what business they are in and determine how to leverage that business. For Intellitax they determined they were in the software development business so they effectively sold their software for a reduced rate so that resellers could provide the customer service. Look at what happened to ATX after they were purchased by CCH and you tell me what happened to the customer service! Most of us are on this website because they so obviously failed at providing superior customer service. With the purchase of Intellitax and Taxwise, it seems reasonable to me that CCH is testing whether they can make this business model work. My guess is in a few years one of two things will occur. 1) they will try and keep customer service in-house because they think they are effectively paying to much for it and they will again provide horrible customer service at expensive rates. (I see this ALL THE TIME with billing companies and past due accounts / collections) 2) they will determine they really are just a software development company and they will continue with the TRX model in some way. Just my guess. And the 500 copies of ATX is reasonable. It would be silly for ATX to completely transition their franchise software to outsourced customer service companies. TRX is making an investment that if they do a good job, ATX will sell them a much larger number next year. Hopefully it works out. Link to comment Share on other sites More sharing options...
joanmcq Posted May 28, 2009 Report Share Posted May 28, 2009 Well, KC, as I posted above, having members of this board posting on offical CCH boards and calling CCH probably didn't help too much either. Link to comment Share on other sites More sharing options...
joelgilb Posted May 28, 2009 Report Share Posted May 28, 2009 Well, KC, as I posted above, having members of this board posting on offical CCH boards and calling CCH probably didn't help too much either. Amen. good thing that for once I didn't sit on the fence and placed my order! Link to comment Share on other sites More sharing options...
kcjenkins Posted May 28, 2009 Report Share Posted May 28, 2009 Me too, Joel. I guess we will soon find out if we made a good choice. One thing I do know is that I have yet to hear a single person who used TRX who did not like their support team. Also, someone else who purchased right after I did mentioned me as the person who referred them, and I got a check from TRX for $40 for the referral. Got the check two days after they signed up. I had no idea they even did that. Link to comment Share on other sites More sharing options...
Catherine Posted May 29, 2009 Report Share Posted May 29, 2009 Me too, Joel. I guess we will soon find out if we made a good choice. One thing I do know is that I have yet to hear a single person who used TRX who did not like their support team. Also, someone else who purchased right after I did mentioned me as the person who referred them, and I got a check from TRX for $40 for the referral. Got the check two days after they signed up. I had no idea they even did that. I was talking to someone at one of our local professional group meetings, who had been on the fence about ATX for several years. Really liked some aspects, kept hesitating over the price. Told him about the TRX deal, he signed up next day, and sent me an email thanking me _and_ telling me that TRX had told him to pass along to me that I mention the referral to get an additional $40 off. That was a sale CCH/ATX would _never_ have made -- this guy wasn't biting because of the cost. If he likes the program, he'll be back the next year probably regardless of who he has to buy from. So it gains them sales from new folks, as well. It's not "loss of revenue" to them if it builds a customer base at _no_ additional support cost. And I highly doubt they sold all 500 licenses in this one forum. But you're right, KC, there are two sides to this story. And it must hurt to lose full-price customers to a reseller. OTOH, I had been thinking _very_ seriously of going over to Drake because of the total cost for my small practice. This TRX deal kept me as a customer, so for CCH it's still better than losing me completely. Catherine Link to comment Share on other sites More sharing options...
kcjenkins Posted May 29, 2009 Report Share Posted May 29, 2009 Exactly. And remember, while we love this board, our membership is a tiny fraction of the 4000+ ATX users. So it's doubtful that they lost many 'regulars' to the TRX deal. Even among those of us here, a lot were just hesitant to make any change. I'd bet that the majority of those 500 ATX packages that TRX sold went to new users who never used ATX before. Link to comment Share on other sites More sharing options...
Bob Hoffman Posted May 29, 2009 Report Share Posted May 29, 2009 Exactly. And remember, while we love this board, our membership is a tiny fraction of the 4000+ ATX users. So it's doubtful that they lost many 'regulars' to the TRX deal. Even among those of us here, a lot were just hesitant to make any change. I'd bet that the majority of those 500 ATX packages that TRX sold went to new users who never used ATX before. Please stop rubbing this situation in the rest of our faces. Link to comment Share on other sites More sharing options...
joanmcq Posted May 29, 2009 Report Share Posted May 29, 2009 Thank you bob. Since I am still catching up on my taxtalk digests and am really shocked at the blatant way that people a)called ATX or CCH demanding to know what was up, blatantly promoted TRX over CCH on CCH run boards, c) generally just flabbergasted at the way this whole thing was handled. Anyone that was on this board knew TRX was a reseller since TaxWise was substituted for Orrtax/Intellitax and there was a big discussion about the mechanics of this last year. OUR membership is a fraction of the ATX users, but taxtalk has a huge amount of ATX users. Ya think the parent company isn't going to notice that? Braedon wasn't going on that board announcing the deal! Link to comment Share on other sites More sharing options...
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