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Strategic Technology Horizons is a free monthly newsletter published by Allen Falcon, President of http://www.horizoninformation.com target="_blank">Horizon Information Group, covering innovate ideas and perspectives on technology management issues relevant to small and mid-size enterprises. ******************************************************************************
Strategic Technology Horizons
May 2008A Note from Allen
Back in high school, I worked a local chain of appliance stores. Long since the victim of big box retailers, these stores were from the era when every price tag on every item had a slash through the price. The only way to know the selling price of the air conditioner, lawn mower, TV, or vacuum was to ask a salesperson for help. The salespeople would pick a price, and the customers would haggle … I mean negotiate. The trick of course, was that every price tag also displayed two codes that told the salesperson the lowest price they could quote and still receive their full or half commission on the sale.Call it chaos or free enterprise; customers would not buy until they were happy with the price and the salespersons would not sell unless they were happy with the commission. Interestingly enough, one of the best salespersons only approached customers leaving the store without having made a purchase. She always offered the lowest half-commission price and almost always closed the deal.
Recently, local and national news outlets have run in-depth stories instructing consumers how to negotiate price at some of the largest national retailers. Merchants like these stories because the help keep customers in the stores. Selling a Hi-Def TV at a half the normal markup is still better than selling none at all.
For business technology buyers, price is nearly always negotiable. And, negotiating price is only one of the creative ways to find opportunities in a slow economy.
Best Regards,
Allen
Slow Economy + Creativity = Opportunity
Whether or not you believe the economy is in recession, you likely see the effects of the general economic slowdown in your business. While some industries prove more resilient, in a slow economy, most businesses look to optimize available revenues, reduce costs, and manage cash flow. On the flip side, creative Information Services spending decisions can reduce near-term costs and/or save your business significant sums over the long-term.Here are a few ideas on combining the slow economy and a little creativity to create opportunity for your business.
- Consolidate and Time Your Technology Purchases: Here's how …
- Map out all potential IS purchases for the next six to twelve months; buying early may save you thousands
- If you buy direct, work with an account manager and not just the web site. Make sure your account manager is in the right "group" based on the size of your business and your potential budget
- Quote purchases between six and four weeks before end of your vendor's fiscal quarter
- Re-quote as the initial quote nears expiration; let your vendor know their competitor is looking to "buy" your business with lower prices
- Map out all potential IS purchases for the next six to twelve months; buying early may save you thousands
- Ask and Receive (maybe): Ask your vendor to …
- … take another 5-10% off the price
- … throw in a peripheral (network switch, printer, etc.) for free
- … give you free shipping
- … take another 5-10% off the price
- Call Your Telecommunications Provider
- Ask your telecommunications provider what they can do to lower your fixed and variable costs. In many cases, if you simply "extend" your agreement, they will move you to a new agreement with lower (current) prices.
- If pragmatic, consolidate services under a single provider. Many providers will manage multi-provider installations, and consolidating services may move you to lower cost tariffs for the same services.
- Find out if an upgrade will save you money. Moving a wide area network from point-to-point circuits to an MPLS network, for example, usually takes advantage of lower cost Internet connections while providing more flexibility and lower costs for future growth.
- Ask your telecommunications provider what they can do to lower your fixed and variable costs. In many cases, if you simply "extend" your agreement, they will move you to a new agreement with lower (current) prices.
Creative Finances
If you plan to use the slow economy as an opportunity to maintain and invest in your Information Services, pull together your financial and technology teams and take a fresh look at the financials.Several current market factors may change your historical view of how you acquire technology.
- Vendor leasing incentives, such as 60 days same as cash and introductory rates
- Government investment incentives, including accelerated depreciation options and industry-specific investment tax credits
- Changing financial priorities within your business with respect to cash flow and tax planning
Looking at these, and other factors, may tip the scales in a buy now versus buy later and lease versus buy decisions.
Things We Like: Your Ideas
If you have any creative business ideas for taking advantage of the slow economy, we want to hear from you. afalcon@horizoninformation.com?subject=My Ideas>Send me your ideas. The best and most creative ideas will appear in next month's issue.
