You know a company spends a lot of money on advertising when you can recite their tag line from memory. A great case in point is Geico’s “A 15-minute call can save you 15% on your car insurance.”
So, when my homeowners and auto insurance policies came due earlier this month and I saw that the premiums had risen even more sharply than they had in the past – every insurance company sneaks in annual price increases to “penalize” loyal customers – I knew it was time to make some of those 15-minute phone calls. Sure enough, I found that switching to Allstate brought my annual insurance spend down tremendously.
Similar situations happen in corporate purchasing departments as well. Mediocre suppliers raise their prices until one day they “awaken the sleeping giant” and you make some calls and end up with a more eager supplier offering more reasonable prices.
January is the classic time for suppliers to begin sending out those dreaded annual price increase letters. And January is right around the corner.
Now, naturally, there are some suppliers that are too deeply entrenched in your organization’s operations and strategy to switch. So, you will negotiate those increases with them.
But what categories that you manage are ripe for switching suppliers with little ramp up time needed and little risk exposure? Where just a phone call can lead you to better pricing and equal or better performance?
Use the comment link below to share your thoughts.
Take into consideration Sourcing Innovation’s cautions about switching suppliers in the name of cost savings.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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