Today on the IC-DISC Show we’re talking with Hans Stronck, from Expense Reduction Analysts.
I’ve known Hans for many years and really appreciate the help he’s provided to our clients in the past. I’m excited to be able to share his ideas with you because I know they really can help any company that has $5 million or more in revenue, regardless of whether you export.
Hans also created a guide www.ReducedExpenses.com that accompanies the points he talks about today, so if you don’t have time to listen to the podcast, I encourage you to head over there and take a look at this great presentation with more detail on the savings strategies he’s suggesting.
I know you’ll get a lot from this episode.
Hans has helped dozens of our clients save millions of dollars and I’m a big fan of what they do.
Get a Free Copy of the ‘Is an IC-DISC Right for ME’ book Whether or not you have an IC-DISC already, get a free copy of our entrepreneur’s guide to evaluating the IC-DISC and discover the opportunities to maximize your after-tax income – Get your copy here
To speak to Hans directly about the services Expense Reduction Analysts provide, your can email email@example.com, call (713) 391-4746, or visit www.ExpenseReduction.com
IC-DISC Show 006 Transcript
Dave: Hi, Hans.
Hans: Hey, Dave. How are you?
Dave: Hey. I’m great. Thank you for being a guest on The IC-DISC Show.
Hans: Of course. My pleasure. Thanks.
Dave: Okay. Well, let’s get this started. My guest today is Hans Stronck, and he is Managing Director of Expense Reduction Analysts. Hans grew up in Spain and the Netherlands. After finishing high school in the Netherlands, he immigrated to the US, where he graduated from Southern Methodist University with a degree in economics.
Hans is a nationally recognized professional in the third-party logistics industry. He gained extensive experience in logistics as Senior Vice President of South Central Wholesale in Chicago, as well as Executive Vice President of Sales and Marketing for North America for a global supply chain management company.
He’s executed numerous international logistics projects for many Fortune 1000 companies. Early in his career, Hans operated warehouse facilities and ran a truck brokerage division for a major national firm.
Hans joined ERA as a regional licensee in 2006, and became a Managing Director in 2012. Hans is consistently one of the top client acquirers in the United States. Hans lives in Houston and is married, with two children and several dogs.
Hans: Thanks, Dave. Appreciate it.
Dave: Just while I think of it, many of my contacts have enjoyed the podcast, but many of my contacts don’t have an IC-DISC. They’ve requested that I try to add some value for really any company that’s say $5 million or larger, whether they have an IC-DISC or not.
I heard you loud and clear, and that’s why Hans is on the show today. Hans, how long have we known each other?
Hans: Well, Dave, I would say this was right after I joined ERA. ERA by the way stands for Expense Reduction Analysts. That was 12 years ago or so I would imagine. So we’ve known each other quite a long time.
Dave: Yeah. That sounds about right. I don’t know if you remember when we first met, but I described the IC-DISC to you, and then you described what you do to me. Do you remember what my comment was when you explained about your services?
Hans: Tell me. I don’t remember.
Dave: Okay. After you told me what you did, I said, “Hans, that seems too good to be true if you ask me. I just can’t believe there’s that much money available that companies are just leaving on the table.” Your reply to me was, “Well, Dave, the IC-DISC sounds just as devious to me.” We kind of both laughed about it and said, “All right. Fair enough.”
Since then, I haven’t checked the numbers lately, but I know that you and your company have added millions of dollars in value over the last 12 years to my clients. So thank you for taking such good care of my clients.
Hans: Well, thanks for introducing them to me. I appreciate that as well.
Dave: Okay. Also, the last item is in preparation for this call, Hans did something pretty cool. He set up a website called reducedexpenses.com. That domain is just a landing page where you can go get a copy of a presentation, so that if you don’t have time to listen to this podcast or you want to learn more, basically it’s a presentation where he just walks a company through exactly how to do this work themselves. Is that right, Hans?
Hans: Yeah, essentially. I basically talk about the process we go through and why we are successful. I explain to whoever listens that this is not brain surgery, and any firm can do it. It takes commitment and takes other things, but it can be done. When you asked, I was happy to provide that.
Dave: Well, thank you. And again, that’s reducedexpenses.com. Reducedexpenses.com. We’ll have that in the show notes too.
Hans, how did you get into this line of work? Because you came from corporate America, where you were very successful. Why did you make the change to ERA?
Hans: Well, a couple of reasons. To your point, I’ve been in corporate America 15-20 years, and had done enough traveling for a lifetime. Started a family, our boys were just 2 and 3, 3 and 4, something like that, and I just didn’t want to be away. So part of the reason was a lifestyle change.
The other reason was that I was somewhat done with corporate America, always chasing the next quarter financials, and go to the next meeting, all the things that people know about corporate America. There are many advantages, but there’s some disadvantages as well.
I was ready for a different challenge where I was more my own boss. I think I knew what that meant, higher rewards, high risks, and other things as well. But I was ready for that.
So it was a combination of wanting to do something else away from corporate America and starting a new lifestyle change and become more independent professionally.
Dave: Okay. I can certainly relate to that as a fellow entrepreneur.
Hans: Yes, you can.
Dave: I guess it’s been about 13 years now you’ve been at ERA. Have there been many surprises? Has it been just smooth sailing the whole time? What about it’s been easier than maybe you thought? What’s been harder than what you thought it would be like?
Hans: When I joined ERA, I had the same reaction that you had when I talked to you first. That is, this sounds too good to be true.
Our model is essentially, where we take a look at the contracts, the agreements that our clients have with suppliers, and through a whole process and the knowledge that we have, we try to improve upon that. If we are successful and if we are saving, then we get paid. Your reaction was similar to my reaction. Once I joined ERA, I thought it was a no-brainer so to speak. But not everybody else does.
So obviously there were challenges. The main challenge I would say is trying to differentiate when they don’t know who you are yet. Trying for a busy CFO or a busy CEO to respond to a call or respond to an email, that’s easier said than done. That only has gotten worse and harder over time because of LinkedIn and social media and other things that have come in the last 12 years. That was the hard part.
The easy part was once I was in the door, or once I was connected with the top-level people in the organizations, they understand the model. They appreciate the model. They like the model. That part was not as difficult.
Getting in the door was and continues to be a challenge. That’s to be understood. In our model, we really have to start at the top because it is a strategic discussion that we need to have, it’s a commitment, and really often a culture change that we’re asking the company to work on.
Dave: Thank you for that. I’m also assuming that one of your biggest challenges is the same challenge we have that goes back to our conversation 12 years ago. Is that just overcoming the skepticism that people have really left this much money on the table?
Hans: Yeah. Our history, we’ve been around for 25 years. We say historically, this is how much money we save, and it is between 10 and 30%. That does sound high, and it is high.
Naturally, a CFO or a CEO, his first reaction or her first reaction is, “That sounds too good to be true.” Or, they will say, “We’re looking at our expenses every day. There’s no way you can do that.” These are typical responses.
Sometimes we’re not able to save them money, but then at least they know about that, and we went through some sort of a due diligence process with them. However, more often than not, there are reasons why are able to find those savings in addition to what they already had done themselves.
Clearly, 100% of our companies that we deal with, 100% of our clients are looking at their expenses every day. It’s not that they are not doing it, they are doing it. But for a variety of reasons we can go into, we are able to shave off more than they were able to find.
Dave: Okay. Help me translate that percentage. Let’s just think about it as a percentage of revenues. What would the savings be as a percentage of revenues?
Hans: I would say it’s probably on the low end 0.5% of revenue, and on the high end 1.5% of revenue. We deal with clients as small as $5 million in annual revenue, and as large as billions.
Dave: Okay. Let’s just do the math on that. If we have a company that does $50 million of annual revenue, and we take the midpoint, that would be 1%. 1% of $50 million is what? $500000?
Hans: $500000, yeah.
Dave: That’s a lot of money.
Hans: That’s net. So that’s after any fees we have. That’s what’s literally going to their bottom line.
Dave: Wow. Okay. That’s what they’re netting. But they only pay you if you’re successful, right?
Hans: That’s correct, yeah. If we find savings, and it’s apples-to-apples, we all can find savings and go down on quality or service, that’s not savings. It’s all about value. So the total package. If we find savings one, and two, if the client agrees with those savings or that supplier, then it’s considered a successful engagement, or a successful project.
What turns out is that in the majority of time, probably 70% of the time, the client will actually stay with their incumbent supplier, so there is no change.
Dave: Yeah. That is awesome. Why don’t we just look at a typical example? Why don’t you pick a category that you frequently work in? Let’s just do a walk through of a typical scenario.
Hans: Typical, there’s no such thing as typical. We have experts in the field, analysts as we call them, that come from industry, in probably close to 50 different what we call cost categories. That can range from something very specific like food, food distribution, or very generic like office consumables.
We deal with all industries, with all size of companies, because all industries use energy, all industries use insurance, all industries use office consumables. Many of these categories overlap no matter what you do.
Then you have obviously specific categories. So medical supplies will not apply to restaurants, but will apply to hospitals. Legal software will only apply to legal companies.
Anyway, that is first of all. We’re open to any company, any category. Really what we do is we have the discussion with the client and we try to understand how they procure their goods and services. We ask them, “Where do you think there are pain points?”
They always have certain costs in categories where they have a lot of expertise, where they have put a lot of resources in, and they believe they have good contracts, whether that’s the case or not. So we leave that alone.
They will say, “Because we have limited resources, we were not able to spend a lot of time on these seven different categories.” So we end up going and analyze those, if that makes sense.
Dave: Yeah, it does. I’ll tell you what. Why don’t we look at the category that seems to be the most commonly used by my clients, which is small parcel freight?
Dave: Why don’t we just look at a typical small parcel freight category? Let’s just assume that they currently are using UPS. They say, “Oh, but don’t worry, Hans. We’ve got a great contract with UPS. We have a great rate.” What do you say to them? What do you ask them? If they say they have a great rate.
Hans: Well, we say that they may be correct, that there’s no way for me to know obviously, and I’m not going to promise them that we will be able to improve upon it. But we won’t know until we take a look at it.
If they agree for us to take a look at it, and again, there’s no cost to them for us to do that, they send us the contracts that they have and they send us some activities and invoices of the last, let’s call it last year. So we understand what kind of activities they have in this category. What they buy, who they buy it from, how often, at what price, et cetera.
With that data, we can then benchmark those contracts that that client has against all the other projects that we have done, and there’s about 20000 of them. We use the data that we have to benchmark.
Then we go back to this client in your example with one of two answers. One is, “Mr. Client, you were absolutely correct. Your rates and your services are best in class. Congratulations. Please stay with them and please continue to do what you do,” and that’s the end of that engagement. Or we say, “Your rates are good and competitive, but I know we can do better,” and we’ll go from there, we’ll take the next step.
Dave: What percentage of the time do they have just world class rates? I’m guessing it’s a minority of the time.
Hans: I would say less than 10% of the time.
Hans: What I find is that there’s no great correlation between size of clients and let’s call it quality level of rates that they negotiated. Often times a large client thinks because they are large, they have good rates. That is definitely not necessarily the case. At least, I haven’t seen much of a correlation between those two.
Dave: Okay. Let’s say that we’ve got a category, and let’s say they’re incumbent. You look at it and you do some initial analysis and you indicate that you think you can save them say 20 to 25% in that category, by benchmarking it with all the other projects you’ve done in that category, right?
Hans: Right, right.
Dave: Then let’s say they say, “All right. Let’s go for it. Let’s move forward. We don’t have any particular loyalty to this vendor. Let’s go for it.” What happens next then? What do you all do next?
Hans: Well, even if they do have loyalty towards them, sometimes what we do, what we do do next is we create an RFP, a request for proposal. The goal of that is not just to get the lowest price possible, but it’s a combination of what we put in there, we ask of the suppliers that obviously they’re pricing, but also certain things related to quality and service.
We send out an RFP, we get it okayed by the client, all the requirements that they want in there are in there, and we send it to a number of the suppliers. We get that back, and then we present the responses so to speak to the client.
There’s no right or wrong there. The client doesn’t have to stay with the incumbent. He doesn’t have to stay or choose or go with the lowest priced supplier. It is really the client who decides this solution gives us the best value. That is the next step.
Then as I said, the majority of the time, that is the incumbent. Then the implementation of course is quite simple. But 30% of the time it’s not. Then we help them with the implementation and the transfer from one supplier to the other.
Dave: Okay. Then I would imagine another concern companies might have is that they think this is going to take hundreds of hours of time by their accounting department or purchasing department. What’s a typical range or metric? Because based on my client’s experience, it’s a relatively small amount of time, right? I think your team will even come in and actually look through all the invoices at their office, right, and make the copies right there-
Hans: Yeah, if we need to.
Dave: Or conversely, if they have an online system, they can somehow share that information with you electronically, right?
Hans: That’s usually how it goes. But to your point, as I said earlier, and when people see the presentation and my comments with that, they will see that this, again, this can be done by any company. However, if you do it yourself, it does require a lot of commitment and a lot of people and resources. But that’s maybe the right way to go.
To your point, Dave, we do a lot of the work behind the scenes. We do it away from the client’s office. We really only bring them in to the fray when we need to have them make a decision. So when we go from step one to step two, from the baseline report into the RFP, and then from the RFP into deciding who they want as their supplier.
We do the legwork. We do the analysis. We do the monitoring afterwards. All of those things can be done internally, but that’s our value proposition. That’s what we do.
Hans: To your point, under our model, the amount of time that the client spends with us is really quite minimal.
Dave: So maybe based on my client experience, there’d maybe be like two meetings with somebody at the executive level, like an initial meeting to discuss the ideas, discuss different categories that you might be able to help them.
Hans: Yeah. For sure.
Dave: Then a second meeting to present your findings. Then if they want you to move forward with the RFP, then I guess perhaps a third meeting where you’d present the results of the RFP. Is that-
Hans: Yeah. You got it pretty much right. We want to meet also with the stakeholders involved, people that are involved in this process. With freight, it could be people in operations or in finance or what have you. We want them to understand what our role is, and our role is really to be an extension of their team.
Again, we do all the legwork and all the work work. They as a client make the decision. The stakeholders need to understand who we are, what our role is, and what it is not. We have those meetings as well.
This is for each project. We could do 10 projects for a client, and so obviously then it becomes a little bit more busy, but different stakeholders and different people will get involved. That’s essentially how it works.
Dave: Okay. I hate to just pin you down on stuff like this, but I’m going to do it anyway-
Hans: Go ahead.
Dave: Let’s just say we’re looking at a $50 million company that you end up net saving them $500000. How many projects would that technically entail? Three? Four? Five?
Hans: Well, let’s just say it’s a blue-collar company that buys a lot of freight, right? A $50 million company can buy $3-4 million of freight. What if we save them on the low side 10%, whatever. You can get there quickly. But they will also have a lot of smaller expenses where they spent $200000 a year on office consumables. It just depends on the categories.
Generally speaking, we really don’t want to do more than five projects at a time, just to make it manageable really for them. We have the bench strength, we have the analysts in all these different categories, for us it doesn’t matter. But we like to do five at a time. Once they are finalized, then we just add others to it.
Dave: Okay. Let’s just say that they did five projects-
Hans: Go ahead, pin me down.
Dave: I don’t know, let’s not even pick them. Let’s just say it’s five projects. In total, they net $500000. Let’s say each project takes 10 hours of time, between executive team and staff. Is that a reasonable estimate?
Hans: Yeah, I think it is. I absolutely think it is.
Dave: So let me just do the math here. 50 hours of time, that’s the investment, and the return is $500000. If I’m doing my math right, that’s a $10000 per hour return on their investment.
Hans: That is, but that’s if you only look at it from year one. These savings don’t end at year one.
Dave: Oh, okay.
Hans: If you look at this moving forward, let’s look at it two years, and that ROI doubles. Really, what you have created is now a lower baseline for that client to negotiate come year three, four and five.
Part of what we do is we transfer our knowledge, we transfer our process to our clients so they will now have seen how this works. Ideally, when the contract is called, this freight contract expires in two years, they will now know how to go about this. They can hire us again if they want, but they can do it themselves. But now that baseline is so much lower.
If you think about it, the ROI per hour is much, much higher than what you just mentioned, the $50000.
Dave: That is awesome. Really any company with revenues of $5 million and up you’re willing to have a conversation with, right?
Hans: Yeah, yeah. No promises, but we’ll have a conversation.
Dave: Okay. So there’s really two easy, a couple of easy ways people can reach out to you. One is they can just go to reducedexpenses.com, enter their information to download the guide, and then you’ll just automatically follow up with them, you’ll have their email address, right, and see if they have any questions?
Hans: Yes. Yeah.
Dave: Then the second way they could just give you a call?
Hans: They can always call me, of course. Yeah, yeah.
Dave: What’s your phone number?
Hans: It is (713) 391 – 4746. That’s my direct number. (713) 391 – 4746.
Dave: Got you. Then your email is Hstronck, H like Hans and then your last name, S-T-R-O-N-C-K, @expensereduction.com.
Hans: That’s correct.
Dave: Okay. That’s your contact info. We’ll put that in the show notes as well.
Hans: Okay, great.
Dave: Why is your service relevant for almost all companies? Because don’t practically every company already watch their expenses carefully?
Hans: Yeah. That is absolutely right. Many of them are doing a very good job. But as I indicated earlier, there are a couple of reasons why it makes sense that we find additional savings.
First of all, this is what we do 24 hours a day. We deal with suppliers every day. Our analysts know the industry that these suppliers are in, which is very important. They know what makes UPS tick and AT&T tick and Office Depot tick. We have industry knowledge.
Secondly, we have the resources. Our clients have limited resources, regardless how big they are, I don’t care. Those resources as it pertains to this topic, they’re going to spend most of it to their largest expenses. Those are usually labor that we don’t deal with, or direct expenses, and sometimes we do, mostly we don’t deal with that. That leaves a lot of indirect expenses open and exposed. The lack of resource is another reason why some of these contracts are not as good.
I mentioned the benchmarking aspect, the data we have from 20000 projects. When we have a client in Houston today and we try to work on UPS with them to your example, we go see UPS and we say, “Why are you charging them $10 to go from A to B, when we had this other client last week, you only charged them $9 to go from A to B?” We use our data to benchmark and obviously as leverage when we negotiate on our client’s behalf.
So there are a couple of reasons why it makes sense intellectually that we are finding more savings in addition to what our clients had done already.
Dave: Okay. I can speak to that personally from our clients that you’ve worked with, that it really seems like the knowledge you have of those 20000 projects is really so much of the value you can deliver.
Because if they don’t have you and they just call up some vendor and say, “Hey, we think we’re paying too much. We think we need a discount,” the vendor is just going to say, “No, you already have a great rate. Trust us. You have a great rate.” There’s really nothing they can do to prove otherwise, right?
Hans: Yeah. How do you know? Often times a client, when I ask them, “How do you know they are good,” and they will say, “Because we got a 3% reduction last month compared to last year’s contract.” Well, again, that doesn’t mean anything necessarily. Maybe that is a good deal. But you have no way to compare it, right?
Dave: Sure, sure.
Hans: I had a discussion just a few weeks ago with this one company, they told me what great of a printing, copier and printer contract they received. They said it was 5% lower than it was before. Little did they know that because of the industry and all the advantages there, the cost to the supplier had gone down by about 30% at the same time.
So really, their price had gone up rather than down. It’s a matter of understanding the suppliers. And the suppliers know that. A lot of times our clients will say, “Well, I’ve been with this supplier for 20 years, and they’re our best friends and we trust them.”
Well, just like there’s not necessarily a correlation between the size of a company and the quality of contracts, there’s also no correlation in the duration of the relationship. I would almost say that the longer the relationship generally speaking a client has with a supplier, the worse the contracts are. It pays to do the due diligence yourself or let a third party do it from time to time.
Dave: That’s great to know. What I’d love is for you to give us one real life example. Just think of a company over the last year or so, and obviously you’re not going to share the name of the company, but just tell us a bit about it. What industry they’re in, what their approximate revenues are. Tell us about the different cross categories you helped them with?
Hans: Well, we did a large, very large private chemical manufacturer, a billion plus, and with locations all over the country, and with contracts with vendors all over the country. Typically like a large company, they thought they were in good shape. We did about 14 projects for them.
In 5 instances, 5 out of those 14, they were right. They had very good rates, best in class, was very little we could tweak or do. But we did the projects anyway. They were happy to know that they were doing well, they had negotiated good rates.
However, in 9 of the 14, it wasn’t so good at all, and we were able to improve. In one instance we did, telecommunications was one of the projects, they had a full-time person whose job was to have that relationship with the telecom companies and negotiate with them. We were able to save in that project the client 38% off of that telecom contract.
Again, they thought they had a good relationship. They thought, because we are big, AT&T or whoever it was is going to give us good rates. Well, that’s not how it works.
The vendor has two things in mind when they talk to a prospect. One is for that prospect to become a client, and two is for them to become a client at the highest possible rates that the supplier can get away with. And that makes sense. That’s how it works. We understand that. Sometimes companies have great contracts in certain categories and very bad ones in others. It happens.
Dave: Sure, thank you for that example. That’s a great example. Just on that telecom, do you remember what the approximate annual spend on that was?
Hans: Well, that was between $1 and $2 million. 38% or so, that added up to quite a bit.
Another thing that I really haven’t talked about, Dave, and I’ll give you an example here, once the new contracts are implemented with the new or the existing supplier, we will monitor for a number of months, usually two years actually, all the invoices that’s come in moving forward. We do that for a variety of reasons.
One of them is obviously we want to make sure that the new rates are actually implemented. A lot of times over time, you see what we call rate increases or rate creep coming back in. We want to make sure that the client is actually buying from that supplier and not from other suppliers. We monitor it on a monthly basis.
Now, recently we had another client, not so big, probably under $100 million. We did freight for them. What we decided, because last year you will remember that it was extremely hard for anybody to buy freight so to speak. There were not enough truck drivers, there was not enough equipment, the economy was going 100 miles an hour. The price of freight was very high.
Now fast forward literally 12 months to today, that has gone 180. Now there’s plenty of equipment on the road. You can buy freight much, much cheaper than you could 6, 9, 12 months ago. By us monitoring the invoices, by us understanding what’s going on in the freight industry, we went to the client and we said, “Rather than wait two years until the contract is up, why don’t we do an RFP on a quarterly basis?”
That is what we have done. It’s not typical, but it made sense to us. Sure enough, every quarter the rates have come down, because the situation allows us to negotiate that. That’s another example of where we bring value.
Dave: Sure. When you do that, the monthly review of the invoices, you do that for a couple reasons, right? One is because your fee will be tied to the actual savings, right?
Dave: Unless you figure out the actual savings, you don’t know how to calculate your fee. Then the other is they get a bonus benefit of having you make sure that there’s no mistakes on the invoices.
Dave: I’m just curious, do you find mistakes on the invoices?
Hans: We find mistakes on invoices all the time.
Dave: So here’s my question. What percentage of the time is the mistake to the customer’s benefit?
Hans: Yeah, yeah. I think you know the answer. The minority of the time. Isn’t that funny how that works?
Dave: Sure. Like less than 5%? Maybe 1%?
Hans: Probably, yeah. I’m not sure if we even track that, but I would imagine it’s not very often.
Dave: Even though they’re “honest mistakes,” they always seem to be honestly-
Hans: Sounds like an oxymoron, yeah.
Dave: Right. Go ahead.
Hans: No, that’s one of the reasons why we do it. It’s to see patterns, to make sure that the client has stopped buying from the old supplier and has transferred all to the new supplier. So different reasons why we monitor it.
Dave: Well, thank you for the example. I think based on my experience of the clients of ours you’ve worked with, I would say that 95% of the clients we’ve referred to you, you’ve been able to add value. Is that typical for your whole portfolio? Or was our clients, was there something unique?
Hans: They were exceptional. No, your clients were just average. Hopefully we bring value to the process even if there are no savings.
Dave: Oh, because you just confirm that they have good rates, right?
Hans: Yeah. Exactly. They basically conducted a due diligence process. They’re happy with what we did, and they’re obviously happy with what we came back with. It doesn’t always necessarily have to be savings, but obviously that’s how we exist, and the majority of the time that’s actually what happens of course as well. To your point, yeah, 95% is probably a good percentage. It doesn’t always work out, but usually it does.
Dave: Yeah. Truly because the deck is really stacked such that it’s almost impossible for you not to be able to help, right? Because you have the industry experts who used to work at the companies that they’re now negotiating against, you have the database of the 20000+ projects. You know the best rate that a vendor’s given anywhere in the country for that service, and so you have that in your back pocket.
You add all of it together, and then the fact that your work’s all on a success fee basis, there’s almost no drawback to somebody using you. Because again, the worst that happens is you’ll validate at no cost to them that they already have great rates.
Hans: Yeah, yeah. No, that’s it. This whole process, again, they can do it themselves. As they will see in that presentation, it’s a lot of work, but it can be done. As a result, I think their results will go from good to exceptional. That’s what we see when we do it.
Dave: Okay. Well, Hans, I really appreciate you taking time out today.
Hans: Sure. My pleasure.
Dave: Yeah, yeah. Thank you. Why don’t you just let me summarize, and then correct me when I’m wrong, okay?
Dave: For any company over $5 million in revenue, that probably 95% of the time you’ll be able to help them. The magnitude of the help is around 1% of revenues.
It takes very little time, especially if you discover that you can’t help them and they already have great rates, there’s probably very little time on their end to get to that point in the process. So there’s almost no risk, other than just a few hours of time.
The worst thing that’ll happen is that they’ll validate they got great rates. What will probably happen is that they will materially increase their bottom line through your services, and you only get paid if you’re successful. Even then, you only get paid once the savings have been recognized, right?
Dave: It’s not like you’re estimating the savings for a year, and then asking them to cut you a check right then before you even start the RFP, right? They’re paying you monthly based on the actual savings, right?
Hans: That’s exactly right. Yeah. Yeah. Yeah. All of that is correct. One major thing is missing, and that is that throughout this whole process, the client is in charge. We are not in charge. We are not in charge. We do not make any decisions. If the client said, “I do not want UPS on this RFP,” then that’s what will happen.
Again, we are an extension to their team, to their procurement team. We feed them with the information. We give them advice. But they are always in control of the process, and they’re always in control of the decisions that need to be made.
Dave: Yeah. Thank you for mentioning that, because the bottom line, you’re not going to make them change vendors just because you find it’s a better rate.
Dave: Yeah. Thank you for reminding me of that. Lastly, if any of your contacts are listening to this podcast, prospective customers of yours or centers of influence like bankers or attorneys or CPAs, Hans has helped dozens of our clients.
If anybody ever needs a reference, feel free to reach out to me. My number is (832) 654 – 9889. (832) 654 – 9889. Again, I’m a huge fan. I can think of only one client that we’ve ever referred to you that you couldn’t help, and they were relatively small and in kind of a unique area where there just weren’t… most of their expenses were core expenses.
I’m a huge fan of your work. You always make us look like a hero. I would encourage anybody out there who’s listening who has a company with $5 million in revenue or more to reach out to Hans, or even just reach out to me if you want, just an intermediate step. I have a pretty good understanding of their business. If you want to just ask me some questions without having to involve Hans, you can do that as well.
Thank you again for the presentation you put together. That’s at www.reducedexpenses.com. Anything else we need to add?
Hans: No, that’s it, Dave. I thank you for inviting me on this, and obviously for your continued support. It’s been great. I encourage everyone to go see that website and to see the slides and listen to my comments. There’s a little bit more meat to that than we discussed today, so there will be a lot of things you heard today and some new stuff as well. With that, thank you very much, Dave.
Dave: Well, thank you Hans. With that, we will sign off.
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