How to protect yourself in a recession

Tough times increase consumer risk as suppliers seek to cut costs and undercut, but people can protect themselves by basing their buying decisions off recommendations from reliable sources.

Graham Southwell of BNI New Zealand – a national business referral organisation that specialises in helping people achieve word of mouth business growth – says it’s not uncommon for some companies to under-quote to get the business and then come back for more money later on.

“There’s also the risk of some suppliers cutting corners to reduce costs. They don’t do their long term business prospects any good, but it’s the customer that takes the immediate loss,” he says, offering these five tips which will help people be more vigilant.

1. Ensure you receive a written quote that covers everything (no hidden surprises).
2. Get three quotes.
3. Ask for a guarantee and be clear on what the guarantee covers.
4. Seek only to do business on recommendation.
5. Request testimonials which quote the full name of the person or company giving the reference.

“It is particularly important that you ask for recommendations. When somebody gives you a recommendation they’re putting their own reputation on the line, thereby reducing your risk,” says Graham, whose organisation will only accept members who provide at least three references.

“Companies only become members after being vetted by the existing members of the networking group. Thereafter members will actively refer business to that company for as long as they continue to do a good job.

“The price they quote is also the price they are expected to charge and our induction process actually requires each new member to make the BNI commitment in front of the other 20 or 30 other business people at the meeting,” he says.

The BNI Code of Conduct offers a good, vigilant formula for selecting quality suppliers:

“Upon acceptance to BNI, I agree to abide by the following Code of Ethics during the tenure of my participation in the organisation:

1. I will provide the quality of services at the prices that I have quoted.
2. I will be truthful with the members and their referrals.
3. I will build goodwill and trust among members and their referrals.
4. I will take responsibility for following up on the referrals I receive.
5. I will display a positive and supportive attitude with BNI members.
6. I will live up to the ethical standards of my profession.

Ends/…

About BNI

BNI is New Zealand’s largest structured business referral organisation for small to medium businesses, and is based on the principal of ‘givers gain’. The organisation has 105 chapters countrywide – from Dunedin to Whangarei – and more than 2,300 members who attend weekly breakfast meetings to pass business referrals to each other.