What type of buyer does your personality, circumstances, and experiences make you for your organization?
Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.
It is interesting to look at the business world in the perspective of how we function in our personal lives; seeing the differences and similarities with which activities are accomplished. Sometimes we behave in business as we do in our personal lives and sometimes we behave totally opposite, especially when we are dealing with someone else’s money. This week we will take a look at some different types of purchasing profiles and the defining characteristics of each.
The Bargain Hunter
Sue is what we call a thrifty coupon cutter. She is on a fixed income since she lost her job and has had to take another which makes less income. Since many of Sue’s expenses, especially those relating to her two children are difficult to adjust, Sue must do everything she can to cut her expenses until she can grow her income back to a level she was used to. Sue searches through the paper for coupons, pays attention to special discounts and will even shop at multiple stores to get the items she needs at the best price available. These efforts take time and an investment from Sue, but it is worth it in a situation for her where the money is tight.
Many businesses are not unlike Sue. For one reason or another, their revenue stream may have taken a hit due to losing a major customer, having a major expense that has depleted capital or from rising supplier costs. In these situations companies must review their expenses and determine, as Sue did, where they can cut costs until they can return the company’s revenue to previous levels.
Cut the luxuries – The first step to take in cases like this is to review those areas of expense that aren’t necessary. In Sue’s case, the cable TV package and restaurant meals were the first to go because they were luxuries and not necessary for her family to survive the reduced income situation. Many companies often follow this same strategy and will cut those “luxury” expenses that their company can live without.
Look for discounts – The second step is to begin looking for discounts on the services and products that you cannot live without. In Sue’s case she found e-coupon sites, clipped coupons and registered for discount programs from the places she shopped most. Many businesses will do the same thing, looking for suppliers who are offering deals on new business. The important thing here is that changing suppliers or products introduces unknown variables in the equation that should be examined before deciding on full switches. Trying or testing out a product or supplier first will be a very important part of this process.
Discover new sources – There may also be times when it makes sense to split your spend among more than one supplier so that you can get the best deals on the items you need when you need them. This does create more effort to manage multiple vendors, but like it did for Sue, the investment of time may be worth the savings received when multiple suppliers constantly compete for the business with no one vendor being guaranteed they will keep all of the business by default.
Discount shoppers must invest more time but their circumstances often require this in order to get the savings they need to run their business. Keeping watch of the market and being familiar with multiple sources of supply is a big key to this model. For more information on how SafeSourcing can assist your team in a revenue decline/cost cutting situation or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.
We look forward to your comments.