Daily Archives: September 27, 2009

According to Wharton, You Should be Marketing Now!

Wharton recently published an article on managing in an upturn, quoting famed Wharton professors Morris Cohen, Lawrence Hrebiniak, Peter Cappelli, and Oliver Chatain. The article offered up some very sound advice on how to successfully manage your business through the upcoming upturn. Buried among the nuggets of insight, which, by the way, echo many of the sentiments that I’ve shared over the last year, was one by Olivier Chatain that couldn’t be more timely.

According to Chatain, areas of opportunity can be found in products or computing software that increase productivity and companies that sell these types of products and services should be ramping up production and marketing now. I wholeheartedly agree. Even Forrester has found that investment in procurement technology continues. After all, what other vertical offers software that, when properly applied, can lower transaction costs while reducing purchasing costs?

Vendors, this is the quarter where many of your potential customers will be fighting for budget to acquire new sourcing and procurement solutions to help them increase efficiency and lower costs in the year ahead. This means that now is the time you want your brand to be front and center, because most budget requests are made based on the “baked-in” cost of the preferred solution… yours!

So where should you put your marketing dollars? Well, as far as I’m concerned, you should spend some of them on one of the leading blogs that attract thousands of readers every day and tens of thousands of readers every month. There’s a big difference between push and pull when it comes to web information. While the first model might be accompanied by distribution lists of an impressive size, the reality is that over 90% of people don’t read the vast majority of information pushed at them (think about how much “junk” mail you open). But when someone chooses to visit a site, that’s a reader who is actually interested in what that site has to say — 10,000 unique visitors to a pull-blog are more valuable than 100,000 “subscribers” of a push e-mail list. Much more.

If you would like to sponsor Sourcing Innovation, which reaches over 10,000 unique readers who are now making around 50,000 visits to almost 200,000 pages every month, information can be found on the side bar to the right of this page.

Great Tips For Smarter Procurement From … CNN Money?

Yes, that’s right. A recent article in CNN Money about reducing your spending as a consumer, if you read between the lines and focus in on the principles, and not the tips, had some great advice for reducing your corporate spend. It might sound a little crazy, but their article on cut your spending by $500 a month had some tips that, if properly applied, could save your company millions of dollars. Really.

Let’s focus in on the first 10 tips.

  1. Slash Your Grocery Bill
    • Shop Once a Week

      Aggregate your purchases into fewer orders. This will not only give you volume discounts, but it will reduce maverick purchases … which is often the greatest single source of negotiated cost reduction leakage in an organization.

    • Give Up the Bottle

      Bottled water costs a lot more than you think if you add it up. If each person in your office consumers $15 a month worth, and you have a 1000 people, there’s $15,000 in instant savings.

    • Eat What’s Ripe

      Just like in-season produce is 20% to 50% less, in-season technology purchases for products being produced in bulk could save you a bundle. Remember that when replacing your cell-phones, laptops, and peripherals.

    • Differentiate Between Clean and Dirty

      Just like organic produce will always cost $1 to $2 more, “premium” suppliers will also charge more for products that might not be noticeably better. For example, can you honestly tell the difference between an organic and a non-organic onion or cabbage?

  2. Ditch your second or third car

    Maybe the boss won’t let you get rid of the company cars, but do they really need to be driving high-end BMWs on the corporate dime? A lot of car companies are producing luxury cars now for 30K to 40K. Get them a Hyundai Genesis, for example.

  3. Visit your Local Cobbler

    Are you replacing equipment too aggressively? Regular maintenance can often considerably extend the useful life of expensive equipment. There are companies that specialize in the delivery of software solutions that help you monitor and proactively schedule service calls to keep your mulit-million dollar production equipment working efficiently well beyond the amortization period.

  4. Twitter to Save

    While I don’t recommend the use of Twitter, there are many commodities and office suppliers that you can buy opportunistically and save a bundle. Just keep your eyes open.

  5. Time Your Buys Right

    Many industries go through cycles in supply and demand. If you buy during a trough, you can negotiate a considerably better deal than if you try to buy during peak demand.

  6. Stretch it Out

    Are you being over-serviced? For example, do you need full janitorial service every night? Think about it … do you vacuum your living room every night? Train your staff to empty their own recycling and garbage on the way out every night … because, if your facility is designed appropriately, they’re heading out the back service entrance to the parking lot and going by the maintenance room anyway. Analyze the “management consulting” spend and see how much you need. And you could save some big bucks if you can go to a 4-day work-week via either 10 hour days or telecommuting and turn the power off another day a week.

  7. Get to Work Cheaper

    In the corporate world, you want to get to the client cheaper. Enforce travel policies that require advance scheduling and bookings and compliance with policies.

  8. Step off the Gas

    Make sure your trucks don’t idle, that their tires are always adequately inflated, that they are serviced regularly, that your drivers are trained to drive easy, and that, where possible, they avoid left-hand turns. Chances are, you can cut your fuel consumption by over 30%. That’s going to save you millions if you do a lot of shipping.

  9. Buy Ink, Not Cartridges

    Overpriced, disposable packaging IS overpriced, disposable packaging. Minimize the non-recylable / non-reusable / non-refundable packaging and reduce purchase and shipping costs.

  10. Reconsider Brand Loyalty

    Printer paper is printer paper. Tomato paste is tomato paste. Iron nails are iron nails. Don’t pay for a name … pay for a quality product.

The secrets to smarter spending are more-or-less universal. When you understand what they are, you can usually translate a good consumer tip to a good corporate tip, and vice versa. There will be exceptions, but the reality is all cost avoidance is based on sound analysis and good judgement. Use both, and you’ll save. Always.