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VOL. 35 | NO. 25 | Friday, June 24, 2011

Harnessing the power of consumers

CostPress seeks to trade data for perks

By Colleen Creamer

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Franklin-based CostPress wants to give consumers more of a voice in pricing and customer service with companies that provide such core services as wireless, cable, gas, and health and auto insurance.

But it’s not able to do that just yet.

For now, members sign up and pay $1 for the service they would like discounted, such as health care or gas. They conduct a survey on the provider they currently use and the hope is that enough consumers will join to impact those large service providers.

It’s collective bargaining for consumers and, the company hopes, a paradigm shift in shopping.

“This is a prelaunch product we’ve put together so we can tell our story,” co-founder Larry Wahl explains. “We are, in the next 30 to 60 days, likely going to conclude capital agreements. We are doing this through close relationships and qualified investors. We don’t have to necessarily reach critical mass with membership number, since we are able to, and have to have, relationships with the providers.”

Different from other group-purchasing organizations such as Groupon.com, which concentrates primarily on discretionary income and offers “deals of the day,” CostPress (costpress.com) aims at delivering ongoing discounts on services consumers can’t live without.

Their approach is unique, Wahl maintains, in that the plan is to attract big vendors with more than just the strength of its membership. CostPress will try to lure providers with unique and possibly valuable data about how the company performs and what they could improve upon.

“What we are saying to providers is, we are giving you data that is valuable to you and, in exchange with that feedback in hand, you can tailor services so you should be able to create a more streamlined operation that allows for saving, and we want some of it back for our members,” Wahl says.

Nashville resident Anita Ryals, who is on a fixed income, says she would use such a service but only if the discount was worth the effort.

“If it worked out to be enough of a discount that would be easily accessed when I needed it, then I think it would be a great benefit,” she explains.

Ryals says she feels the pinch mostly at the pump and the grocery store even though she shops for bargains. However, she is unsure as to the power of a third-party survey.

“I get sticker shock every time I go to the store or fill up the car,” Ryals says. “I have to limit my driving, and I have to pay attention to where I get gas at to get the best deal. I would have to do some research as to exactly what they [CostPress] do and how the money is being used on my behalf.”

Wahl says much of the original brainstorming focused on the lack of customer service because, in the current climate, the customer “no longer comes first.”

“We all know that when you call corporation X, you get somebody at a call center that’s making $8 an hour. He or she has no power,” Wahl says. “If this had been launched in 1985, the average consumer would say, ‘Oh, you are just being rude. There’s no problem. I like IBM. I like Xerox.’ It’s just not that way anymore.”

Ryals says customer service does seem to have taken a hit along with the economy.

“It’s all been outsourced, and half the time you can’t understand what they’re saying,” Ryals says. “A few weeks ago, I had a problem with AT&T and called their customer service center. The rep couldn’t figure out what I needed, so they told me I needed to talk to a supervisor, but the supervisor wasn’t going to be in until 3 p.m. the next day.”

Wahl furthered that the company had acquired a “solid foundation” while getting the word out. While further pursuing funding, he said, CostPress will develop more provider agreements and collect memberships. The company already has “existing relationships at high levels” with some providers, he adds.

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