5 Misconceptions About the Cost Reduction Industry (Fixed Costs Reduction)

Aaron Stahl / Cost Reduction / February 1, 2024

Over the years we’ve realized there are quite a few misconceptions out there about what we do and the cost reduction industry in general. These are some of the bigger ones we’ve come across over the years.

1. Someone Is Getting Fired –

With our service no one is getting fired.  We focus on most of the expenses of a company that are non-payroll. So, while management consultants do exist that focus on trimming employee count, we focus solely on non-payroll related expenses.

I like to think of us as the inverse of a management consultant, and a first line of defense for a company. A company calls us, and we save them as much money as possible from some big areas of overhead and fixed expenses, and hopefully save jobs in the process.

2. It’s Magic –

What we do isn’t magic.  It’s simply hard work and lots of experience. This is a big one. I think people sometimes look at cost reduction and wonder what it is we actually do to drive savings and think it’s a bit of ‘hocus pocus’ so to speak.

This is largely because they aren’t watching over our shoulders for the 100’s of hours during the audit (which would not be particularly exciting to watch).

At the end of the day though, it’s just decades of expertise, reams of data we’ve acquired over the years that we leverage for our clients, and a mountain of work combing through invoices and contracts looking for errors, overcharges, and opportunities for savings.

3. It’s Too Good to Be True –

This is probably the biggest one. The biggest single objection we get from a client, whether they verbalize it or not is ‘this sounds too good to be true’. That’s because we only get paid if we save people money, therefore there is no risk to the client.

In fact, we’ve heard this enough we’ve wondered if charging clients an upfront fee would combat this! We don’t of course. We always respond with the fact we’ll be making money if we help you, and while we love what we do, our motive is very clear and aligned with our clients. And that is to make money when we save our client’s money.

4. We Have People in House That Handle That –

I think there’s a misconception out there that cost reduction consulting is only needed for small businesses or medium-sized ones, and that the bigger companies have staffs to handle this type of thing.

The reality couldn’t be further from the truth. While it’s true that bigger companies do have bigger staff and more resources, those people are still doing 100 other things. I would say the only way this misconception is true, and the only way any company doesn’t need their expenses reviewed by 3rd party experts is if the answer to all the below questions is ‘yes’:

  • Is the person who is managing the XYZ expense category, only managing that expense, and has no other duties?
  • Are they incentivized to save every dollar on a performance basis in that particular expense category?
  • Do they have over 10 years (minimum) of sole focus on this particular expense category, doing nothing else each day?
  • Do they have access to thousands of other comparable data points across industries, organizations, and peers outlining comparable costs (at a line item level) of this particular expense category?

If the answer to all of those is ‘yes’ then I would concede a cost reduction audit by category experts is not warranted. Otherwise, it’s certainly worth a shot and the time invested. Which brings us to our last misconception.

5. It’s Another Project We Don’t Have Time For –

We hear this one quite often, and understandably. Every organization is stretched for resources, and they have to focus on where their time is most valuable. We find savings at 90% of the clients we work with and only get paid if we save money. So our service produces an infinite ROI (as the cash investment is zero), which leaves the ROI on time as the critical factor.

Admittedly, the hardest part of engaging with us for our clients is getting us the data we need to get started (we need invoices and copies of contracts for the categories we are auditing). That being said, in many cases, we can obtain this data ourselves once provided with online logins by the client, almost completely eliminating this administrative burden.

Outside of this initial gathering of data the only time requirements needed will be when we come back to the client and say ‘We’ve found X amount of savings in Y category’. We have a brief call to explain the details of the findings, answer any questions, get our client’s ok to move forward and get to work delivering those savings to their bottom line. (or in the 10% of cases where we don’t find savings we simply say ‘you have a clean bill of health in this category, thank you for the opportunity’).

The total time requirement (outside of someone on their team getting us the data) is about 2-3 hours.

So when these savings, which will continue to pay our clients dividends each month, are factored into an hourly cost for the client, the ROI on time is immense. And even with the 10% of the time we cannot find savings, meaning the ROI on time is zero, there is still peace of mind knowing their expenses have been reviewed by industry experts whose only source of income is helping clients save money, and they have a clean bill of health.

Ultimately, time savings is one of the biggest reasons our clients choose to engage with us though. The 90% of the time we find savings means there’s one less thing for the client to have to worry about. There is more time for our clients to focus on their core competencies and less time dealing with vendor headaches, overcharges, contracts, lengthy negotiations, and vendor issues.


These are some of the biggest common misconceptions we see at P3 and in our industry. Hopefully, this has helped shed a little light on what we do and how we can help.

To see if you’re part of the 90% of businesses we find savings for, schedule a call with one of our cost reduction experts today.

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