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| Perhaps you've seen the commercials, read the ads, even contacted Bargain Network Inc. to buy a computer, a TV, a car, even a house. More than 2 million people have. That's why this Goleta-based company is rapidly adding employees, building customers and watching revenues rocket. Every day, Bargain's phones ring about 15,000 times around the clock and the company signs 2,000 new subscribers,boasts Christian Hunter -- proud chief executive officer, who at age 28 leads one of the largest businesses in the county.  "We assist customers to make smart shopping decisions," he said. "We're growing, and we're only going to get bigger and better."Bargain Network calls itself the nation's premier pricing service for homes, vehicles and consumer durables. The private company has approximately 500 employees, twice the number of four years ago. Last year's revenues were $24 million. "We'll do in excess of $35 million in revenue this year," Mr. Hunter stated. "We've done 50 percent growth year over year the last four years on average. That will increase." How it works is really simple. Any shopper who calls Bargain's toll-free phone lines or finds its Bargain.com Website can subscribe for $9 per month, with the first month free. Members receive objective, discounted pricing information 24 hours a day. Dozens of online agents and dozens more in toll-free telephone support personalize the discount pricing assistance.
For example, say a consumer wants to buy a digital TV. He can call the company and a Bargain agent will tell him which stores in the area have better deals. The agent will tap into the company's search engine, find prices at Circuit City, Best Buy and other retailers, and share the prices, quality information and if available, the name of a salesperson at the store. There are many calls centers, shopping 'bots, direct response marketers and membership clubs. Bargain Network claims to be the only company that brings all these together. Bargain Network makes money through subscriptions, much like a magazine. Unlike a magazine, it does not accept advertising. Nor does it pay national retailers to use its inventory databases, Mr. Hunter said.  The company currently has about 250,000 subscribers. At $9 per month, that's generating about $27 million annually. There is churn, but the company claims it's adding new members much faster than it loses old ones. More revenue comes from extra services sold to subscribers.Inside the 20,000-square-foot building at 7404 Hollister Ave. are several departments: Media buying, membership services, the call center and the information technology department. Its media buyers direct millions of dollars into 4,000 newspapers and 400 television networks each day, advertising the toll-free number to consumers seeking deals. With high accuracy, the team knows how many phone calls these ads in numerous markets will generate to the call center, 24 hours a day, seven days a week, all year long. Visitors will notice that upon entering the call center, the noise level soars. A steady din of voices emanates from the cubicles. Agents wearing headsets speak with customers from all over the United States, fingers tapping keyboards to find pricing information. Most are college students from UCSB or Santa Barbara City College. They get paid hourly and earn commissions. Though some make $9 to start, the average hourly wage is $14.50 with commissions, Mr. Hunter said. Bargain has 350 telephone and Web agents. Shifts go around the clock.
The company provides full medical benefits, a 401(k) with 4 percent company match, vacations, holidays and this year the company will begin an employee stock-option plan. There are bumps, too. A lawsuit filed by Homestore.com accuses Bargain Network of using automated querying programs thousands of times a day to misappropriate Realtor.com listings information. According to Inman News Features, the complaint alleges that Bargain Network has been using linking technologies to bypass Realtor.com while selling access to Realtor.com's content through Bargain.com to Internet users. The complaint also alleges that Bargain.com's bypassing Realtor.com deprives Homestore of opportunities to collect demographic information from Internet users and potentially jeopardizes Homestore's contractual relationships with its content providers, business allies, sponsors, advertisers and customers. Homestore's complaint also charges Bargain Network with violating the terms of use posted on Homestore's Web site, Inman News reported. Those provisions expressly prohibit users from using automated querying programs to scrape data from Realtor.com and other Homestore cyberspace properties.  Mr. Hunter said the lawsuit is without merit. He said Bargain Network is working to settle the case.Looking ahead, Bargain is hiring executive talent from around the country and is seeking to expand its space. Mr. Hunter, whose wardrobe reflects his penchant for black, confidently, if not brashly ,predicts his company will quadruple subscribers within one year and top the 1 million mark. This month alone, Bargain has filled six top executive positions. Bargain Network trains every employee Timothy Chin and Ryan Fell last week were named as directors of strategy and corporate development, and Faith Sedlin and Mary Lysaker were named vice presidents of consumer services and member services, respectively. Earlier, the company appointed two outside board members, Dennis Cagan and Eric Robison. They bring the board to five, including Michael Dubrow, executive vice president of partnership development, and Adrian Sedlin, senior vice president of strategic and business development. * Mr. Chin has more than 15 years of strategic marketing and product development experience. He will focus on helping Bargain Network acquire new members and retain existing members. He has previously worked at Hewlett Packard, Sun Microsystems, NEC and NetZero. At NetZero, he led the research and loyalty marketing activities and helped grow the membership tenfold to 6 million members. Most recently, Mr. Chin worked for Dynamics Direct, an online direct marketer of streaming videos video, audio, music and animation. * Mr. Fell will support internal operations in developing projections as well as support the strategic direction and development of the company. Prior to joining Bargain Network, Mr. Fell worked for the Santa Barbara Technology Group, an early stage venture financing and management advisory firm for tech startups. Before SBTG, he worked as a general manager for Kinko's throughout Los Angeles. * Mr. Cagan is the founder, chairman and chief executive officer of the Santa Barbara Technology Group. He has founded more than a dozen companies and been a successful tech industry entrepreneur for more than 35 years. * Mr. Robison is a business adviser whose clients have included Microsoft, Coca-Cola and Symantec. Previously, he was the vice president of business and project development at Vulcan Inc., the business management operation of investor Paul G. Allen. He currently serves on the corporate boards of CNET Networks, Cumulus Media and Rocket Network. * Prior to joining Bargain Network, Ms. Sedlin was a general manager and senior director for Excite@Home. Leading its communication services division, she oversaw several of its flagship products that propelled user growth. * Ms. Lysaker has experience in improving customer service operations, call centers, and training and development programs at companies including Shop at Home Inc., Thomson Corp., Jazzercise and the 3M Corp. She has built customer call centers from inception and worked in numerous acquisitions. Company reinvented itself after lawsuit Bargain Network Inc. used to be Century Direct Marketing. Four years ago, the Federal Trade Commission filed civil actions against six telemarketing companies in the greater Santa Barbara area, including Century Direct. "We got lumped in with other companies" in this action, said Bargain's CEO, Christian Hunter. At least four of the other five companies are no longer doing business. In 2000, without admitting any wrongdoing, Century Direct paid $200,000 to settle FTC charges that the company sold incorrect or outdated information about government auctions of cars, houses and other property -- information that was offered for free elsewhere. Century Direct disputed the allegations and put up a rigorous legal defense that cost about $1.5 million. The company agreed to settle its case with the FTC for $200,000 because it would have cost considerably more to continue fighting the FTC's lawsuit. The settlement also required three Century Direct executives -- Mr. Hunter, Antoine Bordeaux and Thomas Adams III -- to post a $100,000 bond before engaging in telemarketing activities in the future. The company reinvented itself, spokeswoman Ina McGuiness said. "Today, we are fanatical about compliance to the point of paranoia," Mr. Hunter said. Bargain Network trains every employee to adhere to a standardized script when talking with customers. Conversations are recorded and monitored for quality control. Bargain has a staff devoted to finding failure, and "they don't have much to do," Mr. Hunter said. Bargain contracts with a special regulatory counsel to conduct company-mandated independent audits. That counsel is headed by Barry Cutler, former chairman of the consumer protection division of the FTC, the firm said. |
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