We live in a world where we don’t get unless we ask. We’re stuck with the same cell phone plan even though every provider is in a constant state of promotion. Our auto insurance is still priced high even though another company is always offering a deal. And credit cards, well, you know you can switch and get a lower interest rate any time.
Every day we’re bombarded with advertising and direct mail asking us to make a switch to a competitor. But aside from credit cards, most of us don’t make the switch. We don’t even make the inquiry with the new company.
In today’s world, especially with the economic situation we’re in, you can save a lot of money by investigating deals that your competitors are offering.
THE REAL WORLD RETAILING TAKEAWAY
Save money by switching carriers or renegotiating.
A company I’m doing some work for had and has a variety of policies coming up for renewal. Medical and dental plans, liability insurance, auto insurance and more.
So rather than renew with the current providers, we set about investigating our opportunities with other providers. In every case, we switched carriers because the rates were less expensive. When the current insurance provider raised medical and dental premiums 20%, we shopped around and found another carrier (a better one in my mind) that offered similar plans at rates that were slightly less than what we had been paying. That saved the company and employees nearly $9,000 in premiums.
The company also had a contract with Pitney Bowes who wouldn’t let us out of it, nor would they reduce the term of it. It’s only $167 a quarter but that’s almost $1,400 over the two years left on the agreement. So we have a machine that takes up space that we don’t use. But we tried.
What else can you do?
- Call your credit card companies and negotiate your interest rates lower, or move the balance to new cards that offer low introductory rates.
- Call your insurance brokers and make sure they shop your health care, liability, property/casualty, worker’s comp and any other coverage to multiple carriers whenever they’re up for renewal.
- Call your utilities including cable, cell phone, land line phones, etc. and make sure you’re on the right plan for your business size and type. Most will let you make changes to your existing plans.
- Threaten to move to a competitor. Find a better deal elsewhere? Most companies don’t want to lose the business so threaten to leave if they don’t offer competitive rates. It works most of the time.
Don’t stick with what you have because of relationships. We all get too comfortable with what and whom we know. The company mentioned above had the same health benefits broker for 10 years. One meeting with the guy told me he didn’t know his stuff and that the company (and more importantly the owner) could save thousands of dollars. Why did I have to tell the guy what to investigate specific plan options? Often times, it takes an objective outsider to analyze the situation and make the change. And change we did.
Make renegotiating part of an ongoing process. Every time any agreement or contract or policy comes up for renewal, go through the process of investigating your options. Business changes every year. Your needs change every year. And the needs of the providers change too. Make sure you’re taking advantage of the situation. If you don’t, you’ll find them taking advantage of you.
How are your saving money through negotiation?