Taking the Pain out of Purchasing
For Mie-Yun Lee, it started with the pit-marked business cards. It was 1992 and Lee, a research associate at consultancy Corporate Decisions Inc. (CDI), was helping her employer set up a new company to manufacture ambulatory and EEG equipment. As one of the junior staff, she had been assigned to purchase business cards, and she ordered thermograph printing because it looked good. But the cards came back looking horrible: the treatment made the company's large logo appear acne-scarred. "It was money down the drain," she recalls.
Lee's experience is repeated every day in small companies everywhere. And often the lousy purchase is something more expensive and important than business cards. "When you start a business, you have people with a great idea but they don't necessarily know how to do the things necessary to support that idea, like purchasing," says Lee. "In our case, we made mistakes left and right. If we had had a resource to help us buy things like business cards or a trade show booth, we could have saved hours and probably thousands of dollars."
So Lee and a CDI colleague, Gregg Kavet, set out to create such a resource. The result, Beacon Research Group Inc. (BRG), in Watertown, Mass., provides purchasing advice to small businesses on everything from networking equipment to health plans. Small businesses need this service more than large ones, Lee argues, because they lack a separate procurement function--or even an experienced office manager with expertise in such things. As a result, purchasing decisions--particularly the important ones involving products like computer systems--often fall on the already burdened shoulders of the CEO or owner.
Rather than testing everything internally or--horror of horrors--promoting advertisers' wares, BRG relies on the opinions of its customers, chiefly CEOs and other decision-makers in companies with fewer than 250 employees. "Lab testing definitely has its place," says Brenda Chin Hsu, BRG's vice president of marketing, "but trying to capture the real world experience is very important to us."
BRG captures that experience by surveying customers, in groups of as many as several hundred at a time, about the good, bad and ugly products they have purchased. BRG then correlates that data with respondent demographics to get a sense of which products work best for which types of companies. "When I looked at computer magazines and I saw a recommended best buy for a laser printer, the question I always had was, 'Is it the best buy for me?" says Lee. "Best buy recommendations gloss over the fact that it's like Cinderella and her ugly stepsisters: There are different shoes for different feet."