“There is hardly a company in the world that isn’t under continuous pressure to reduce or minimize costs while simultaneously striving for growth. Executives feel it. Purchasing departments feel it. Managers and even entry-level staff can feel it. The continual drive to do more with less has resulted in various techniques that look like good solutions, but they can be very difficult to accomplish, and at best only deliver a fraction of what a company’s total savings could be.”
Substitute “Club Manager” and “Country Club” into that quote from the white paper “Getting a Handle on Unmanaged Spend: How to Ensure You’re Maximizing Savings on Fixed and Recurring Costs” by SIB. Club Managers feel this same pressure. How can a club continue to add value to a patron’s membership if they are trapped in a continuous cycle of overwhelming fixed and recurring costs?
Finding a solution
This was why VGM Club looked for a solution. We were able to find it in SIB Fixed Cost Reduction. SIB is a cost reduction consulting firm with a proven track record of saving money for companies in a variety of industries. Through expert analysis, SIB will discover if businesses are overpaying on their monthly bills. SIB has a 98% success rate when it comes to finding savings for their clients.
“A lot of these categories that SIB specializes in are not traditionally categories that country clubs would typically believe they could negotiate – or potentially be over-charged on. When we initially began discussions for a partnership with SIB, this was the most intriguing element from our perspective. SIB could be another service, and value we offer our members.” – Mike Sawyer, VP of contracting at VGM Club – from our fifth episode of Club Cents “That’s Negotiable? You’re Kidding!”
Brown Golf Management finds success
Brown Golf Management is a shining example of the success an organization or club can find with SIB. This VGM Club member found savings exceeding $30,000 after receiving an audit from SIB. Justin Stezin, Corporate Hospitality Director at Brown Golf Management was happy to share some thoughts on his experience with us:
How were you first introduced to SIB? Explain the process from your point of view, what was asked of you and your team to get this going. Was there any initial hesitation?
“We were introduced to SIB through our VGM Club contact, Amy McClean-Ragsdale. SIB requested invoices from our clubs from several expense outlets so they could perform an audit for our facilities. The only hesitation was deciding if we wanted to attack these audits in house, but SIB had far more leverage in the marketplace than our company.”
If you were to explain this process to another individual looking at SIB, how would you explain it to ease any hesitations they may have?
“It’s a fairly seamless process requiring very little leg work on our end. SIB shouldered the responsibility of going out in the marketplace to find savings.”
Learning more from SIB CEO, Dan Schneider:
Broadly, how does SIB take a potential client from start to finish? What steps are involved? How much effort is needed from a club?
SIB’s process is extremely straightforward — we save our clients money on recurring monthly costs across dozens of spend categories by identifying billing errors, analyzing contract compliance and leveraging our experience in over 45,000 locations nationwide to negotiate the lowest pricing possible. We do this all without changing vendors or service levels. The process for our clients is also very simple, in that we just need one month of invoices for each category. From there, we work directly with their vendors to optimize service and pricing and present the savings to the client. If we don’t find savings, they don’t pay us a penny.
It’s really a win-win. If we save our clients money, they’re happy. If we don’t find savings, our clients are confident knowing that they already receive the lowest costs possible and there’s no charge for SIB’s service.
Once we find savings, we validate those savings for the life of our term. Each month, our clients receive a report comparing original baseline spend to the new invoices. We keep tabs on the vendors to ensure pricing remains in compliance with their contracts. We even have an ongoing vendor management service once our initial engagement is complete – we ease our clients’ administrative burden by managing their vendors for on an ongoing basis.
What are specific examples of push back? This process seems like a win-win, why do clients hesitate at first, and how do you educate to ease those hesitations?
To some, it simply sounds too good to be true. They think there must be a catch, but there truly isn’t. If we find savings, we share in it with our clients. If we don’t, they pay nothing. In order to overcome this skepticism, we share success stories and statistics, and encourage prospective clients to view the testimonial videos and recommendations on our website. Learning about cost savings successes from our clients makes the process real for those who are initially skeptical.
Some fear bringing in a third party expert will make their staff look bad or feel threatened if we do find savings. However, executives want their teams to focus on mission-critical work – negotiating the telecom bill for example typically isn’t part of that. Plus, our experience in dozens of spend areas across more than 45,000 locations nationwide and analysis of over $2 billion in recurring expenses gives us negotiating power they simply don’t have. We have support from our clients’ highest levels, which makes everyone feel like they’re part of one mission – to save the company money.
Can you give us a few examples of potential sources of savings? Where might a club not be looking?
SIB reviews dozens of spend categories, including telecom, property tax, bank fees, credit card processing, shipping, utilities and maintenance contracts. These all apply to golf courses, certainly, but areas of special consideration for your industry include water/sewer/stormwater, equipment maintenance agreements, and even document storage and shredding.
SIB gets the best results for our clients when we’re able to do a full review of all applicable categories across all locations. Jack Nicklaus may have been one of the greatest golfers of all time, but he didn’t sink every putt. Like Jack, we may not find savings in every category for every facility – but when we have the chance to turn over every rock, the process is more successful and saves our clients more money.
As you can see, SIB works on a shared savings model, that means there is no upfront costs and they are truly able to deliver a win-win situation for your club.