Are You Road Testing Your Savings Ideas?
Savings ideas come from all sources (sales reps, magazine articles, GPOs, peers, etc.), but are you road-testing them before you present them formally to your customers and stakeholders for even greater success?
As you know, any new car design is road-tested for hundreds of hours before it would ever show up in a new car showroom. This is to ensure that it is ready for real-world driving conditions. It’s the same with savings ideas! It’s best to road-test your big savings ideas (little ones don’t need a lot of testing), with your customers who will be affected by any proposed change in their practices, before you officially present the idea to a larger group of decision makers.
We have a client who is a champion road-tester of savings ideas done in a setting that is always non-threating, casual, and informal. He will find a reason to talk to one of his customers about an idea he has, that would save them time, money or resources and to get their reaction. Many times he will get blow-back in his discussions, but that doesn’t faze him, since now he knows what obstacles he will face if he decides to formally present his big savings idea in a larger forum. It also gives him an opportunity to soften, revise or further align his savings proposal from his customer’s perspective to make his savings proposal even more palatable.
On the opposite side of the coin, I have seen supply chain managers rush pell-mell into a meeting with their cardiologists and then formally propose out of the blue a 25% savings on their pacemaker purchases if only they would standardize on one vendor — only to be quickly rejected out of hand!
Can you see the difference? If you road-test your big savings ideas in a collegial and non-threating fashion, with your affected customers in an informal setting, you can gain insights into their concerns regarding your ideas. This way you can prevent your savings idea from being shot down out of hand in a formal environment. More importantly, you can have an opportunity to revise your savings idea based on your customer’s feedback, so it will be more conforming to your customers’ needs, wants and desires. It can save you time, effort and headaches by doing so!
Filed Under: Best Practices • savingsblog
We have another name for the "road testing" you do. We call it "doing your home work" and you're right. Sometimes, home work is skipped. Presenting something that's quickly shot down does mean you should not have presented the idea, yet.
Peter
You bring up a good point Peter about doing your homework before you propose any new savings idea but I think the point of our article and both of our points is to make sure we cover all of our bases (everything). A good example of this was a client VA Project manager who was purchasing all new Endoscopes for their hospital which were specified by their Doctor that these were the products that he wanted, needed and had to have. The hospital VA Project Manager was from the Finance department and was able to stretch the capital dollars a bit further with the specifications in hand and purchase a few more scopes for the hospital under the capital budget.
Unfortunately, when the scopes came in-house and the doc started using them, he didn't like their grip and feel aspect of the scopes and forced the hospital to buy him a whole new set of $350,000 scopes. This doc provided 80% of the referrals to the hospital. Bottom line, no one thought to have the doctor run a trial on the new scopes to make sure that the product truly met his requirements. Financial homework was done flawlessly but it turns out an important step was missed on the road test, trial, evaluation, etc.
It just goes to show, if you miss one step, forget about one customer or key aspect it could cost you in dollar or quality or both.