I hope that you have enjoyed the article “Rule #1 of Tactical Procurement.”
While most of my articles are written around corporate procurement situations that I’ve experienced or observed, sometimes I am inspired by a personal purchase that reminds me of corporate procurement principles. This article is one that was inspired by a personal purchase.
Here’s the situation…
My family recently purchased a new home. This meant that I had to hire a moving crew to haul our big stuff – furniture, appliances, bikes, etc. – from the old place to the new one.
There are many moving companies. So many that one may call moving services a commodity.
But anyone who has been in the procurement profession for a while knows that services that appear to be commodities can have suppliers that are quite different when it comes to performance. I believe that moving services fit into this category.
We took a close look at three moving companies in particular. Mover #1 claimed to be the official or preferred mover of all our hometown sports teams. I had an acquaintance with one of the owners of Mover #2 and my sister had a great experience with them. Mover #3 was a company that really didn’t have much fancy going on in the way of marketing or branding.
Naturally, we got pricing from these companies. Mover #1 was the least expensive. Mover #2 was the most expensive. Mover #3 was right in the middle.
Which company would the average new tactical buyer choose?
Probably the low bidder – Mover #1 – right?
The easiest – and, often most disastrous – decision to make is to select the lowest-priced supplier.
Of course, I consider myself a little beyond being the average new tactical buyer. But I also don’t consider myself part of the “I prefer the devil I know to the devil I don’t know” camp. Those people would have chosen Mover #2, despite its high price, because there was some personal familiarity with the company.
I chose to do a (slightly) more in-depth analysis of the capabilities of these movers. Drawing from the above-referenced article, I was trying to determine the “supplier with an acceptable probability of being satisfactory in all aspects of the transaction.”
For some tactical procurements, this is pretty easy. So for my moving supplier selection, I started by doing the easiest thing that a buyer can do – I googled the names of each of these movers.
I found that Mover #1 had lots of bad reviews posted online from disgruntled customers. Mover #2 had lots of positive reviews. For Mover #3, I could only find two reviews and they were for their retail delivery business, not their residential moving business.
Then, I searched the Better Business Bureau’s Web site for each of these companies. What I found was rather revealing.
Mover #1 had a BBB rating of F! Within the past three years, they had a whopping 41 complaints against them, including one that they did not respond to! And this was the official/preferred mover of sports teams? I can’t believe that sports teams would risk their brand by associating with an apparently bad performing company, but those types of alignments are usually “all about the deal” and not about performance.
So, needless to say, we ruled Mover #1 out. This little bit of research helped us remember that tactical procurement can be a minefield of potential mistakes and “commodity services” aren’t always what they appear to be.
Mover #2 was a BBB Accredited Business and had an A- rating. They had four complaints in the past three years, all of which were resolved.
Mover #3 was also a BBB Accredited Business and had an A+ rating. They only had three complaints in the past three years, all of which were resolved.
Based on the googling and the BBB ratings, we felt that Movers #2 and #3 each had an acceptable probability of being satisfactory in all aspects of the transaction. So then – and only then – did it come down to price.
Mover #2’s price was more than 10% higher than Mover #3. I could find no convincing evidence that Mover #2’s premium would result in better performance. I consider BBB Accreditation a commitment to customer satisfaction and, because Mover #3 was BBB Accredited, I felt strongly that they would perform, so I selected them.
Who was Mover #3? Starck Van Lines.
And how did they perform?
I can’t tell you how impressed I was with the crew: Denny, Ron, and Kevin. These guys were careful, caring, personable, fast, and strong! Speaking of strong, Ron – a guy who told me that he has been doing his job since 1979, so he’s no spring chicken – lifted my washing machine about 14″ off the ground by himself and held it there for about 20 seconds while Kevin slid the tray underneath it. Crazy!
These guys obviously had developed good synergy by working together for some time. They navigated the tricky corners with ballerina-like grace and coordination between them. I’m not sure they would be flattered by a ballerina comparison, but they just awesome at their jobs!
Though time-and-materials contracts can make any buyer nervous, these guys finished the job in less time than was quoted, making my expenditure less than expected. Plus, not only were the personnel doing the heavy lifting a pleasure to work with, but their relocation coordinator Ann Marie was in regular contact before, during, and after the move to ensure that everything went according to plan.
All in all, I couldn’t imagine being happier with the moving experience! And I didn’t have to pay that 10+% premium to go with Mover #2, who has more awareness in the marketplace.
So, I have nothing but kudos to Starck Van Lines in general and Denny, Ron, Kevin, and Ann Marie in particular.
It was a nice reminder that, by doing just a little due diligence, you can find a great supplier, keep costs down, and avoid the landmines of a one-time buy.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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