I have always been curious how people value the worth of one percent. Some are quick to say that one percent is insignificant.
A recent Sprint TV commercial utilizes 1% as the defining difference in comparing their shortcoming to Verizon’s entire coverage of mainland USA. Sprint’s angle: 1% reliability differential is miniscule. It should be overlooked when picking a phone provider.
My question becomes: How do we quantify this 1%?
Hypothetically, if every smartphone user in the USA during 2017 utilized Sprint that would be approximately 222.9 Million users according to statista.com. 1% of this number is 2.23 Million. Call me old fashioned, but 2.23 Million is a lot of people; a lot of dropped calls, missed text messages and social media posts.
I am a firm believer in how 1% can impact the bottom line of any business as well as your personal life. The marketplace has tight competition and finding new ways to shave costs is the path to gaining an advantage.
A former manager and mentor would always quiz our management team about 1%. He would ask randomly during budget time, “what is 1% of 100 dollars?” Everyone would reply, “$1 dollar.”
“Raise your hand if you believe this is a lot of money.”
No hands were raised.
“What is 1% of a Million dollars?”
“What about 10 Million?” Easy, add a zero; $100,000 dollars.
“Raise your hand if you think $100,000 dollars is a lot of money.”
Every hand was raised.
“Great, now does everyone understand how the swing of 1% on every job we run can accumulate over the course of a year when you run a budget based on $10 Million in Sales?”
Imagine if that Sales number is 100 Million.
The power of one percent can result in positive reinvestment of profit or negative cost cutting measures. So how can we make some immediate, subtle changes to embrace the power of 1%?
Take advantage of Free Stuff!
Be mindful of the rewards and incentives that are being offered and maximize the benefit. They are everywhere. Here are a few ideas:
Discount terms for early payment are a great way to save. All it takes is a negotiation with the supplier, stay on top of the invoice and ensure it is paid on time. Easy enough, right?
Home Depot offers contractors savings programs with cash back on purchases as well as fuel rewards. Their web portal allows tracking of every receipt and powerful reports to understand spending.
Pay invoices with a cash back or rewards credit card. As long as the vendor doesn’t charge a processing fee, this is low hanging fruit.
For those who are interested in personal savings, here are some ways to save at home:
Amazon.com – An Amazon Prime membership is worth the $100 investment. The free shipping and member benefits pay for itself over the course of the year.
Credit Card Rewards are another slam dunk. There are a lot of offers that provide Cash Back. You simply need to plan ahead and know what card to use for the different purchases.
Here are two Cash Back programs that are essential for savings:
Discover IT Card:
- 5% Cash Back on Different Categories of Purchases (categories change quarterly; ex. Gas, groceries, Amazon, Home Depot)
- 1% on Non Category items
- For the first year, Discover will MATCH your Cash Back reward
- There is a potential to get 10% cash back on certain items from different categories
American Express Blue Cash Preferred:
- 6% Cash back on Groceries up to $6,000
- 3% on Gasoline
- 1% on everything else
- There are also current promotions for spending at Amazon.com
Keep in mind that the savings will only be truly effective if you pay off the balance each month and do not accumulate interest. The benefit is in the cash back reward. To not pay off the balance each month is disastrous as the interest cost will wipe away your rewards. Unless of course you swing a 0% interest rate for the first 18 months. Proceed with extreme caution and fiscal responsibility if you embark down this road.
Now is the time to embrace that 1%, make it habit, bring that behavior into everyday decision-making at the office and at home. Hopefully with practice it will grow to 2% or more over time…imagine that!