Costar buyer experience

This week I had the task of renewing my company’s subscription to Costar, a data/analytics tool that has become relatively industry standard for most major participants in the commercial real estate space.  This is a web-based product that offers various data segmented by market (eg: Seattle, San Francisco, London, etc.).  The company has sort of a stranglehold on the market thanks to the quality of its data, which is borne and continually improved by the number of subscribers.  Having been established in the late 80s, the company has virtually no competitors that can rival its service offering at this time – and this makes for a frustrating subscription process.

Costar sells its product using an annual subscription-based model with seat licensing.  A purchaser subscribes to a number of seats with a given service level offering, and ‘certificates’ needed to login are installed on terminals so the product cannot be shared (unless you have a dedicated terminal).  What I was hoping to do was review subscription packages online, compare and contrast, and make a selection based on our needs.  After spending some time trying to do so, here’s what I found. 

First, Costar’s website provides descriptions of its many products available for subscription, but that’s about it.  No pricing information can be obtained and the viewer is instead peppered with invitations to schedule a demo and phone numbers for sales reps.  They appear to be forcing you to experience the product before being turned off by its price (which is high – like the cost of an FTE employee), but by the time you know the cost you’ve been lured in and trapped by its glory.

Pricing was the most frustrating part of the experience.  Users can’t review pricing and packages online – it’s a black box to the subscriber.  You’ve got to actually get on the phone with a representative who provides a quote after they’ve learned about the number of seats you want and suite of services sought.  Further, they force a sort of escalation of commitment by bundling.  Let’s say of the total suite of services numbered 1-10, I want only 1, 2, and 7.  Can’t do it they say.  You’ve got have at minimum 1-3 and 7 alone is the same price as 7 and 8 combined, so you need 5 products in total, not 3 (or some such thing…).   

While frustrating to the buyer, there is logic behind this approach.  By forcing the user to describe its needs prior to obtaining pricing, the seller gains an upper hand in getting to know the customer first.  This helps them understand the needs and scale of a client and then develop a tailored offer strategy accordingly.  While clearly frustrating to the customer, Costar can get away with this thanks to their market position, as customers have nowhere else to turn and tend to seek out the product before being ‘up-sold’ (thus the product is first ‘bought’, but then ‘sold’ to borrow from Seth Godin’s anecdotes).  While definitely not the experience I would have preferred as a buyer, it makes for an interesting case study in the power a product or service provider can exert over its buyer under the right conditions.

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