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Dave’s Dating Service Case

Background

Dave's Dating Service

Located near San Diego, California, Dave's Dating Service (DDS) was founded in late 2004 by owner Dave Sanderson, who has an undergraduate degree in chemistry and an ivy league M.B.A. Sanderson's long-term business plan is for DDS to become a well-known dating-service firm with an impeccable reputation. Sanderson developed his business plan after 15 very successful years at high tech startups. In 1998, he and his business partner Cheryl Vallier began a nationally known tech company. It was in early 2003 that Sanderson started thinking about ways that he could engineer his next business from the ground-floor up. A little over a year later, he had secured $1 million in outside capital to bankroll his ambitious business plan. Today, DDS has over a thousand active members.

The Way Things Work at DDS

Registration Procedures. Prospective clients usually initially contact DDS by visiting the website. The website answers the prospective clients' questions regarding fees and the nature of the service, as well as provide general information about the current client mix (e.g., number of members, ethnic composition, average income level, etc.). The information given to the prospective client is based on the most recent Customer Profile (see attached Table 2 for most recent profile, which also is called Form D1). The Customer Profile is prepared quarterly on data taken from new customer files. The Customer Profile contains aggregated information usually of interest to prospective clients related to existing clients' ethnic background, occupation, income, hobbies, and other frequently-requested information. The website was designed two years ago, but DDS had a patch made indicating that DDS now is a member of and adheres to the ethical standards of the International Society of Introduction Services.

If the site visitor shows further interest, they can live chat with a DDS client representative. Representatives are employees who have been trained in registration procedures. They are salaried and receive a small bonus when prospective customers are referred to DDS by one of their current clients. When a prospective client chats with a representative, the representative discusses how the service works and answers many of the questions that prospective clients have.

If the prospective client is interested in enrolling, the representative direct him or her to read and sign the service contract and a background check release. The representative answers any questions about these forms as the client read them. Once a client digitally signs the service contract, the signed copy of the agreement is returned to the client for their records. DDS maintains an electronic copy of the service agreement filed in their system. The client is required to pay a $1500 membership fee by credit card or pay pal, before obtaining further access. The system takes the payment and uses a verification service for payments made by credit card. The verification services rejects credit card transactions if the card has been reported as lost or stolen. If the verification service were to notify DDS of a problem with the account, the prospective client's file would be held until payment is made in full. A new client is unable to obtain information about other clients until payment is made.

Once the payment verification procedure is performed, the client completes a “New Client Information Sheet.” The information does not “go live” until the receptionist enters the data for paid customers from the New Client Information Sheets into the database. When the receptionist enters the client data into the database, a number is assigned to the client and the client's Database Record is printed. The receptionist compares the Database Record to the New Client Information Sheet and corrects any discrepancies. At that point the receptionist will active the client’s record. Once activated, the client's file will remain active for one year. After payment of the $1500 fee, an unlimited number of database requests are permitted for one year. After one year, members pay only $100 per month to remain active in the service.

DDS engages Secure, Inc. to perform random background checks on new clients. According to DDS's control manual, a Secure background check is to be done, at random, on 1 out of every 4 new clients. The purpose of this background check is to verify such data as age, marital status, number of children, education, salary, and criminal record. Background checks take about a week. When DDS personnel receive the results of background checks, they are to compare the background information against the clients' records in their Database Record. If clients are truthful in their initial interview, their files remain active in the Database. If clients are not truthful, as per the Secure report, their files are to be corrected and then temporarily deactivated until a DDS service manager contacts them. If the client can explain the discrepancy, their file is reactivated, but if they cannot explain the discrepancy, the client's fee, less the cost of the Secure report and a $50 processing fee, is refunded. Their file is then deleted from the Database Record.

Clients are asked to report back to DDS if they eventually marry someone to whom they were introduced by DDS. A "success rate" figure which DDS plans to include in a forthcoming marketing brochure will be based on these client reports.

Database Controls. DDS uses a local area network (LAN) for data processing. Todd Huff, Manager of Accounting and Data Processing, is the only employee with access to the file server. The original programming and subsequent modifications were done by outside contract programmers. When DDS orders a modification in the software, Mr. Huff writes the specification for the change and Mr. Sanderson approves it. Documentation supporting the original programming is maintained by Mr. Huff, and any amendments to the documentation because of subsequent modifications are made as appropriate. The contractors also are provided with a copy of the documentation.

When a modification is received, Mr. Huff loads it to the system after normal business hours to ensure that no one else will be using the system during the testing procedure. Both Mr. Sanderson and Mr. Huff test the modification to ensure that it works as specified. If the modification does not meet specifications, the old version of the program is reloaded on the system, and the modification is returned to contract programmers for correction. The room with the computer servers is locked, and only Mr. Huff and Mr. Sanderson have keys.

Mr. Sanderson is the "security officer." As such, he sets the access privileges and assigns passwords. Users must enter both a logon ID and a password to access the database. Terminals automatically logout if not used for ten minutes. Mr. Sanderson reviews passwords and logon IDs monthly to ensure that only current employees access the system. Security and authorization levels are as follows:

Security Level	Authorized Users
I. General query II. New client information entry. III. Update current client information IV. Update software program V. Update security and passwords.	All Employees Receptionist All Employees Mr. Huff Mr. Sanderson

Program files are backed up when changes are made. A copy of the program is retained and stored off-site. All data files are backed up monthly. Data file backups are stored in a safe deposit box at the bank. Changes to data are backed up weekly. Data change backups are stored in a fire-proof case in Mr. Huff's office.

Table 1 - The ISIS' Code of Ethics

CODE OF ETHICS The International Society of Introduction Services provides these guidelines to establish and maintain the highest standard of conduct within the introduction service industry. Failure of any service to comply with these provisions can result in ISIS membership decertification and the loss of all membership privileges. Each ISIS member must: Comply with the spirit as well as the letter of all local, state, and national laws. Maintain the highest standards of truth and fair dealing in all business practices, advertising, public relations and promotional activities. Provide clients requesting a contract with a complete, straightforward and understandable written agreement prior to commencement of services. Provide services that always fully meet or exceed any pre-sales representations made to clients. Refrain from making any statements about competitive services except those that are accurate and verifiable. Attempt to resolve promptly all disputes with fairness and sincerity and to honor a client's request for arbitration. Maintain strict confidentiality of all client records and information unless otherwise specifically authorized by the client. Maintain a pricing structure that is always reasonable and appropriate to the level, quality, duration and respective value of the provided service. Recognize a client's right to a personal, supportive and professional service. Refrain from placing prospective clients under pressure and respect their desire to make an unhurried decision to join the service. Copyright ( 1995 by ISIS. Reprinted with permission of the Internal Society of Introductions Services (ISIS).

Table 2 - Dave's Dating Service Form D-1

Customer Profile:
Age Gender (% male) Income Smoking (% non-smokers) Alcohol (% non-drinkers) religious (% active)	42.1 51.6 $60,025 85.6 25.3 51.8
Ethnic Composition African American (AA) Asian (A) Hispanic (H) Native American (NA) White (W)	21.0 19.2 13.0 2.3 44.5
Occupation (%'s) Agriculture (AG) Armed Forces (AF) Clerical (Cler) Construction (Constr) Education (ED) Laborers (Labor) Managerial & Administration (M&A) Marketing & Sales (M&S) Mechanics (Mech) Production (Prod) Professional (Prof) Service (Serv) Technical (Tech) Transportation (Trans)	2.5 2.8 4.7 7.5 8.5 1.2 13.3 11.8 8.1 2.2 18.3 7.3 8.6 3.2
Education High School or G.E.D. (H) Some College (S) Bachelor's degree (B) Advanced degree (A)	12.3 10.6 58.3 18.8
Political Affiliation Democrat (d) Independent (I) Republican (R)	39.5 20.0 40.5
Hobbies Bicycling cooking dancing gardening outdoor recreation reading sports, professional scuba diving theater travel	12.7 18.3 20.7 15.9 22.5 21.3 31.5 17.3 27.8 52.6

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