Frugal or foolish?

This video is rather funny but it made me think about how purchasing is sometimes done, and how it really should be done.



What I started to think about is how easy it is for us, as non-profit professionals in ever-tightening budgets, to get so caught up in saving a few dollars that we forget how to do business. The thing is that when we allow that to happen, we risk damage to our organizations. These three scenarios are a great, albeit (thankfully!) exaggerated illustration.

The guy trying to buy the video does the least damage. Yes, he managed to really annoy the clerk, and you can bet that this is one clerk who will never do him a favor. But, if the guy ever goes back in there to purchase something, he'll get whatever is in the box. He doesn't have to worry as much about the good will of the clerk, although if he ever needs something as simple as a bit of guidance or information, he probably won't get it. So, even though he doesn't do alot of damage, he doesn't really win anything, either.

The woman going for a styling and trim, though, was asking for trouble. Would you trust this hair stylist after this conversation? I don't know that I would. I certainly would not expect his best work. When I know that my chances of redoing any significant job in any short period are almost non-existent (in other words, whenever I'm involved in purchase decisions) the last thing I can afford is someone doing less than his best. Why would I take that risk. Even if I did get a small discount this way, I've just risked a much larger amount because a less well done job is more likely to need fixing or replacing sooner than a better done job. Not the most sensible tack to take.

The scenario that poses the greatest danger to your organization, though, it the restaurant diners. Not only have they thoroughly antagonized a vendor who they will never be able to use again, they are now stuck with an expense that they had not budgeted for. If you were talking about a significant project, you could be dealing with a real hole. Also, you really don't want to get a reputation as someone who doesn't pay the bills, either. Lower cost vendors won't do business with you, if that's what they hear. At best, they are going to want you to pay up front, which creates its own set of problems. In short, this scenario really has no upside, even from the purely pragmatic point of view.

I know that these videos are exaggerated. Most good humor is. But it was scary to hear some of the same buzzwords I've heard in other contexts. And the (twofold) point is seriously valid.

Firstly, never, ever take or accept goods or services that you don't intend to pay the price for. If you can't afford it either do without or find a way to fund-raise. Secondly, when you are tempted to push on price really hard, think about two things. Is squeezing and disrespecting someone who is, after all, doing something of value for you, consonant with an agenda of improving the world in some way? And, is your organization well served by the possibility of saving a small amount of money balanced against the certainty of a job not done as well as it should be?