What type of buyer do your personality, circumstances, and experience make you for your organization?
Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.
This week we have been looking at a lot of different buying behaviors based on the amount of money at the company’s disposal, the view about discounts and values, and those based on loyalty and comfort levels. Not every buyer is the same and some buyers have aspects of more than one buyer in them. We conclude the series today with the final buying behavior we will be looking at:
Cash Rich (Fat, Dumb, and Happy)
John is a very successful person. He does extremely well and is making more money than he can spend due to some great ideas he has sold. The more he spends the more he seems to make. When he goes to a restaurant or to a store, he barely glances at the prices because he knows he has plenty of money in the bank. If he wants something or wants to take a trip he just spends the money and does it. If John saves money throughout this he barely notices it because he gets the things he needs and wants whenever he feels like it. He thinks that he is well-insulated to the emergencies that may come and believes he will always have enough.
No Time to Save – There may not be too many businesses in the position that John is in but there are some. These companies are ones that are and have done very well, growing faster than they can sometimes handle and increasing their revenue year after year. Their resources are completely focused on the growth of their fortunate business and so they have little time to invest in doing the things to save money now. In their minds it is tough to justify spending time on a process to save a million dollars when they could invest that same time to grow their profits by ten million. They know there may be a time when they have to save and cut costs but that time is not today. This can lead to issues down the road if they do not have the infrastructure in place to transition to a new way of business.
The Crash – “Down the road.” There always seems to be an end to the growth “down the road” followed by a time that requires expense reduction. If cost-controlling processes, tools and partnerships are not established when the company is growing it is difficult to turn those on when expenses must be cut. In many of these cases this involves cutting blindly from the #1 expense; headcount. As we saw during the turmoil of the auto industry, staff was greatly reduced, plants were closed, and jobs lost in order to combat lost revenue. Having processes in place that are operating even at a minimal effort, can leave a system which can be ramped up to help later if they are needed.
Trickle Down Effect – As many people in John’s life will attest, when the controller of the money is unconcerned about how that money is spent, those around him tend not to either. John’s wife, children, employees, and friends have the tendency to spend John’s money just as easily as he does. In the business world this translates to employees who travel without trying to get the deals, paying extra money to fly on a certain airline or stay in a specific hotel because they want the miles or points. It can also mean that managers and executives may spend too much money enjoying the benefits of strong growth without the consideration that the growth and extra cash may someday go away.
Growth is a great thing and rewarding those people who got it that way is also a good thing. The best approach to dealing with growth and increased revenue, however, is to put the programs in place to prepare for a time in the future when it goes away. By putting savings processes and policies in place when things are good, even if you don’t put a huge time investment into it, you can be prepared for leaner times.
Regardless of what type of personal buyer or corporate buyer you are, or even if you are a combination of any of the five we have covered this week, the goal should still be to prepare and create savings and value where you have the resources to do it. Some companies will have more time and resources to invest and others, due to circumstances, will make the time and resources to do it. For more information on how SafeSourcing can assist your team this process 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.