Ebit were tasked by our client with the following brief:
To benchmark existing affiliate agreements
To ideally consolidate the number of existing suppliers
To fix finalised pricing with multiple providers for a set term
Our client was using a number of providers for essentially the same service. Whilst providing a degree of flexibility the approach was certainly not providing the optimum commercial solution for the business. Our challenge – to benchmark the current rates in place and the performance of the suppliers concerned.
Ebit used its extensive benchmarking database to compare our client’s rates with similar sized businesses. It was immediately obvious that the current rates charged by the incumbents were not as competitive as they should have been. A tender document was formulated and sent to pre agreed alternatives and of course the incumbent suppliers. The document was designed to give our client multiple options going forward.
Final Outcome and Success
Thanks to an extremely competitive tender exercise and Ebit’s in house benchmarking data and industry knowledge, a substantial reduction of over 20% was achieved. More importantly from our client’s perspective the whole process was transparent, expedient and controlled within tight timescales. Our client actually remained with one their existing providers and was delighted to achieve not only significant reduction in costs but a vastly improved contract providing much improved service levels.
A shorter 6 month contract term was also agreed with successful parties on the basis that a secondary decision to consolidate further would be made subject to their actual performance and returns. Ebit’s client gained immediate commercial advantages with the incremental benefit of having two very keen suppliers being responsible for delivery maximum benefit over the term. Ebit also ensured that future commercials were agreed upfront to make the secondary switch seamless.