Money Lessons Learned From a Dysfunctional Phone System

tangled lines

One of my clients (where a friend of mine also works in IT) recently upgraded their office phone system. The phone system they had was perfectly functional but, like so many people and businesses, they wanted something with more bells and whistles (and something that several of their competitors had). After taking bids, forking over the money, and getting everything installed, the new system has been nothing but trouble. It rarely works and even when it is working, it’s not able to reliably handle the call volume that they deal with. The poor IT staff has done nothing but work on this system for months and the “support” that was supposed to be provided by the seller has been unhelpful. Everyone who has to deal with it is fed up and wishing for the return of the old system.

While this hasn’t been my problem directly, I’ve certainly had to listen to my friend complain about it every single day for the last three months. In all of the complaining, I’ve picked up on a few money lessons that apply to both businesses and individuals.

The cheapest product/bidder is probably that way for a reason

Also known as, “You get what you pay for.” The company opted for the lowest bidder, as many companies and individuals do when choosing a vendor or contractor. The trouble is, the lowest bidder is usually cheap for a reason. In this case, the installation was faulty and the promised support never materialized.

The Lesson: When shopping for a contractor or vendor, do your homework. Don’t choose someone just because they’re cheap. Make certain that they will do the work you need and do it well. Find someone who takes the time to understand your unique needs, not someone who’s looking to make a quick buck. Check their references and look at some of their other jobs, if you can. Low cost is great, but if it’s going to end up costing you more in the long run to fix the resulting problems, choose another contractor.

Just because the Joneses have something doesn’t mean you need it, too

The main reason that this company opted for this particular phone system was because many of their competitors used it, too. That may seem like a flimsy reason for choosing a system, and it is. But this industry is dominated by appearances and the thinking always goes that if someone else has something and they are successful, then we will be successful if we have it, too.

The Lesson: Keeping up with the Joneses is almost always a bad idea. Whether you’re a business or an individual, buying something just because others have it is rarely a good idea. The item may not meet your particular needs, it may cost more than you can afford, and it may not be as good as the item it replaces. This is the case with phone systems, cars, houses, and anything else that you buy simply because someone else has it. The wiser action is to buy something only when you need it and do your own research to determine which product is right for you.

If you feel like something is off about a deal, you’re probably right

My friend told me before the deal was finalized that something seemed off about it. The price they were quoted was much lower than anyone else’s quote. The salesman was hard to reach and seemed to avoid phone calls. My friend recommended that they use another vendor. She was overruled by upper management and the low cost vendor was chosen, with disastrous results.

The Lesson: If something feels off in any sort of deal or financial transaction, listen to your gut and go elsewhere. Too many times I’ve tired to ignore that feeling and I’ve always been punished for it. I’ve learned through a lot of trial and error that if something feels wrong I’d better find another solution. Sure, you might miss out on something great, but the chances are that your gut is right and there’s something wrong with the offer.

Doing some research ahead of time can save a lot of trouble

Had this company taken the time to research this new system, they likely would have learned about the problems that other businesses had with the vendor. They would also have learned that this vendor does not make systems that scale well to the size of my friends’ business. Of course, they learned all of this after the fact. They didn’t do any research on their own and instead listened to the claims of the salesperson, who was in it only to make a sale.

The Lesson: Always do your research before entering into any kind of financial transaction. Make sure you know as much as you can about the provider, the terms of the deal, what other people have experienced with this provider, and make sure you read any fine print. If you have to get a lawyer involved to go over the contracts with you, do it. Make sure you know exactly what you’re getting and that the product will meet your needs and perform as promised. Never believe what a salesman tells you because they are not your friends. They are looking for a sale. Verify everything with independent sources. Doing your own research will save you a lot of headaches.

If you already have something that works well, keep it

The phone system that the company had before worked fine. It just wasn’t the latest and greatest thing. Now that they have the latest thing and it’s a disaster, everyone wants to old system back.

The Lesson: Don’t get rid of something that works perfectly well just because there’s something newer out there. It’s one of those, “Better the devil you know…” situations. Sure, your current item may not be the greatest, but you know that it works and you might even know how to fix it already. A new item is always a gamble. It might work great, but it might also be a total lemon that makes you yearn for the item you discarded. Keep what works until it stops working or until you have a justifiable need for something else.

This experience with this phone system has taught this company a lot of valuable lessons about how to hire and work with contractors. They’ve learned the hard way that upgrading for the sake of upgrading can be a risky and costly strategy. Maybe next time they’ll think twice before deciding that they need something just because the competitor up the road has it.

(Photo courtesy of Peter Kaminski)

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One Response to Money Lessons Learned From a Dysfunctional Phone System

  1. Bben says:

    In my experience with just this kind of situation, Upper management – who overruled your friend because the system was ‘cheap’ will soon forget those lessons and make the exact same mistakes again.

    Lessons learned from a successful contractor. Never submit the lowest bid or the highest. Submit a reasonable bid that you both can live with. Cutting corners or cheapening your product to make a sale will come back to bite you. An astute customer will almost always throw out a low bid that is out of line with the rest of the bids. And, If a customer always takes the lowest bid, we don’t want them for a customer as we will lose money on them.

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