We are all in a critical time as businesses are constantly looking for ways to lower expenses and still increase their bottom line. One of the top expenses any business pays is their IT/telecom services. We need our phones, internet, and data, so we can’t eliminate those costs. Our vendors have told us we are getting the best rates, so “it is what it is!” I hate that statement, but it is what it is. I want to tell you how my company saves our clients 17% on average on these very expenses without switching vendors.
Step 1: Review
You have to review your invoices at least quarterly, if not monthly. This review is so that you can see what changes from one month, or, one quarter to the next. There are an unbelievable amount of charges that mysteriously find their way on to telecom invoices. Call it whatever you want, but these charges will not typically be caught through variance reports and can add up rather quickly over time. Use these reviews to identify features that are not necessary or frivolous and get rid of them! Not utilizing all of the lines you are paying for? Get rid of them!
There are a lot of times in which vendors will only give you a lump sum bill with little detail…this is intentional. You see these vendors are trying to save money also, and one way for them to do that is to cut down on the paper bill by eliminating the detail. I worked for AT&T a long time ago and one of the things that will stick with me forever is that they told us that if a customer calls in, then just “trust and adjust”. Keep in mind that my call center at the time took several million calls a year and that amount only represented approximately 2% of the base of all of their customers. WOW! Really? What about the other 98% of the customers out there with the same error or overcharge? And this is why AT&T is a big monster rich company, and why the FCC is always lurking over their heads. But let’s face it, all vendors most likely do the same thing.
Step 2: CSRS
You need to order a copy of all of your Customer Service Records (CSRs) for each of the invoices you receive. CSRs are the record by which your invoice is built, it is a record of every feature and product that you originally ordered. The problem is that every feature has to be entered manually by a human, and we all know that we as humans are prone to mistakes. Since you may only get a lump sum, non-detailed invoice, you will not know what you are paying for. The CSR will tell you everything. It is the guide of all guides and will be the route to saving money or even recuperating money for any errors that may exist.
Once you have reviewed the CSRs for any errors and overcharges that are embedded, you will now go to the tariffs for the services you are paying for. By reviewing the actual tariffs that the vendors submit, you will be able to identify whether or not the rates you are paying are being billed at “rack rates”. Rack rates are the highest allowable rates that a vendor can charge you. Tariffs will also outline some of the contract rates and discounts that are available for committing to a term, usually 12, 24, or 36 months.
All you have to do next is look at any contracts that you have for these services and compare them to what the tariff states. This will ensure you are paying the correct rates for the services that are under contract and outline the appropriate terms and conditions of the contract. By triangulating the CSRs, tariffs, and any contracts you have, you can ensure that you are being billed accurately and that your company is protected by the best terms and conditions allowable.
Step 3: ICB Pricing
Now you have to ensure that you are going to get the absolute best pricing ever? “But Shawn, you just said that the tariff has all of the rate information in it, and that is what I am paying. How can I get any better than that?” That is a great question, and what step 3 is all about. I am confident that most of you have a network of peers that you can contact to compare notes. If not, start building it immediately. This is how you can utilize the ICB pricing that is available through most vendors. ICB stands for Individual Case Base pricing and is similar to the car salesman telling you to hold on while they go talk to their manager. Ask! You never know what can be accomplished just by asking. However, in order for ICB pricing to come into play, you have to have something that will incentivize the vendor. I have a partner at so and so who has this service and is only paying X. These are part of the negotiating tactics that you must do to maximize your savings across the board.
Let us know how this works for you, we have built our entire company by doing this for our clients. Of course it helps that we have a great staff of former telecom vendor employees, but that should not prevent you from following these steps on your own. If you do get in a pinch, then add me to your network of friends, and I am sure we can figure it out together. And as always, we hope you enjoyed your reading!