Five Areas Where Your Business is Likely Overspending
There's definitely a difference between getting value and getting swindled! Do you know which one's happening in your business? Many executives don't.
We've consulted with a lot of companies, and have found the majority of them are overspending in at least one of these five areas. If you're not sure you're getting what you're paying for, hopefully our advice here will help you find out!
When was the last time you updated your company's phones? Lots of businesses are turning to VoIP and other modern telephone services which is fantastic. But too many are still relying on the same hardware and service they bought years ago and paying far more than they should.
Prices and service levels in this area have changed drastically even in the last few years. Technology has given us plenty of high-quality, inexpensive options that offer helpful business features. Modern telephony services can allow you to forward calls from your business line to your cell phone for when you're outside your office, set up advanced call routing and ring groups, receive voicemails in your inbox, use a virtual receptionist or auto attendant, play hold music and informative messages, and much more that can be beneficial to your company. New features and technology are developed often, so be sure you're talking to your provider regularly.
Whether you've modernized your phones yet or not, we also recommend speaking with your service vendor at least every year. They can let you know about new solutions that may work better for your needs, or any deals that could save you money. Most will rarely, if ever, reach out to you with savings options so it's best to be proactive here. If you haven't spoken with your vendor recently to find out if you could either be paying less or getting more for your service, you're likely leaving money on the table.
Companies often have the same complacency with their internet service as their phone service. We see the "set it and forget it" mentality at many organizations. If you last talked to your internet service provider over a year ago (or even when you first activated the account), it's a good idea to set up a time to review and explore new options.
It's much the same case as above - they will rarely, if ever, reach out to you with ways you can save money, so be proactive with your internet service as well. Changes here happen often, so you are most likely way overpaying if it hasn't been revisited in the last few years.
If you do reach out to your provider and they aren't willing to help you find areas in which you can save money or receive better service, it's probably time to look at other vendors. If you have multiple options in your area, get offers from other companies and bring them to your current ISP. Sometimes they will match or beat them, but either way you'll be able to make a better decision on who to spend your money with.
DATA MANAGEMENT AND STORAGE
Many companies have moved their storage and data management into the cloud, which is great! It's quite the step up from keeping all our documents in endless file cabinets. But many companies also don't realize they're overpaying for their cloud services.
Stanford researcher and lecturer Dr. Jonathan Koomey reported that "the majority of companies migrating their systems to the cloud have the wrong idea of how much capacity they actually need. The companies are over-estimating the amount of cloud capacity they need to pay for because the in-house data centers they've been relying on are poorly configured...More than 80% of in-house data centers have way more server capacity than is necessary...Since many companies don't do routine checks to see how much capacity they are using, they end up paying for extra electricity, cooling, licensing and maintenance for server capacity that never gets used" (Business Insider).
If you have already moved into the cloud, make it a point to audit your services at least yearly. If you haven't migrated yet, we recommend determining how much space and the service level you'll need before you do. This often requires good collaboration between departments - especially your IT team. Whether you choose to manage this in-house or through a vendor, take the time to plan your course of action.
WEBSITE AND SEARCH ENGINE OPTIMIZATION SERVICES
This is a tough category to determine overspending in, and can be pretty variable depending on your goals and values. Some people might prioritize a flashy, cutting edge, expensive website that makes their company look luxurious over the amount of leads they get from it. Whatever you decide is okay! But you can still be taken advantage of by shady or ignorant providers regardless of your budget. The first step in figuring out what you should expect to pay in this area is laying out your preferences. After that, research average prices and packages.
To give you an idea of fair pricing for SEO services and what it will likely include, check out this article by Digital Current.
This chart from WebpageFX shows the average prices for website design and maintenance services.
These should give you a good idea of the average market prices for services depending on your needs and goals. However, there are always factors that could make a service more or less expensive. Take into consideration these factors from Forbes that could influence the value you get:
- Customer service. The extra customer service you get, including the friendliness and rapport of your account manager, can make running your campaign smoother and more enjoyable.
- Flexibility. It pays to have a partner who’s willing to make changes to your account on the fly, and who’s available for conversation at any time. It may be worth the extra money to get this.
- Commitment to results. When your campaign is straggling, how does your agency react? If they go out of their way to boost your campaign, or give you extra services, they may be worth the extra money you’re paying every month.
- History. How long have you been with this company? At some point, you may have to cut your losses, but it’s always favorable to work with an agency that’s already familiar with your brand. Starting from scratch with a new agency is a bit of a gamble, and may cost you time to warm up with them.
Whether you love your current vendors or not, we often find that companies are overpaying or not getting appropriate value from them. This frequently happens when businesses turn to a current vendor about a new service that they claim they can help with but don't have enough knowledge in.
For example, your IT provider may tell you they can handle all your security needs too. But business security is a specialized and fluid area. Your provider might think they can keep you secure, but unless they have a specific focus on security you probably won't be fully protected and you'll pay more to boot.
Most vendors love to offer you as many related services as you're willing to pay them for, whether they are experts in that area or not. Take the time to fully vet your vendors for any new services you're interested in, and don't be afraid to seek out a different, more qualified provider if needed.
To prevent overspending here, we recommend performing at least a yearly vendor audit. Note every vendor, what services you're receiving from them, how much you're paying, your satisfaction with the services offered, and their level of expertise in each area. Compare these to other vendors to ensure you're receiving competitive rates and support.
If you think you're being taken advantage of or aren't satisfied with their work, don't be afraid to speak with your current vendors. Many companies just pay bills as they come and never scrutinize their services or research new options. Take the time to review and negotiate regularly to save your business money and headaches.
Want to stop overpaying without spending tons of time dealing with service providers?
Does talking to and negotiating with your providers this often seem like a pain? Companies like yours often overpay because they don't have the time or resources to work with their vendors as much as they should. If your time is better spent elsewhere, it might be a good idea to check out a managed service provider like Techvera. Aside from handling all your IT needs, we act as your vendor liaison. We know who to speak to and what to ask for to get you the best deals and service in these areas, and will handle any issues with your providers.
If that sounds awesome, let's talk!