Originally published by Promo Marketing on November 4, 2011.
Do you have a compliance program? Does anyone care if you do? Absolutely. End-buyers that have brands to protect care—a lot. Distributors care if their end-buyer customers care. Suppliers that have distributors who sell to these end—buyers also care. It’s unfortunate, but if you do not have an audience (i.e., demand) for product safety and compliance, the reality is you are not paying much, if any, attention to the topics.
Whether your company cares or not, the promotional products industry is becoming tiered into two distinct groups:
- The companies that are capable of selling to Corporate America
- The companies that want to sell to Corporate America but are incapable of meeting their compliance needs
Corporate America is driving the demand for comprehensive compliance programs. They care. In fact, they care enough to make compliance programs a big part of their vendor relationship and purchasing decisions through RFP’s, programs and projects. They care enough to vet their supply chains with proactive factory visits and audits. Many of them care enough to have expensive compliance departments to oversee the products that carry their brand name. None of these companies go to extremes because they want to; they do it because they have brands that will suffer greatly from being associated with unsafe or non-compliant products.
Corporate America cares because they are the companies that are first in line for product recalls—and the resulting front-page news articles. These companies have too much invested in their brands to risk having this brand equity go down the drain via a highly publicized recall of an unsafe promotional product. While Marge’s Dry Cleaner having 28 stress balls recalled isn’t front-page news, you certainly will read about Fortune 1000 companies with 12 million glasses or 800,000 teddy bears recalled. This makes headlines—every time.
I was recently in our local drug store and was surprised to see Children’s Tylenol back on the shelves. I remember when this product recall hit the headlines last year. The story was impossible to miss; it was on every channel and at the top of every newspaper for a week. Evidently I missed the announcement that the recall was over, if there even was one. But isn’t that the way it works? Bad news sells; good news goes unnoticed.
Here’s the thing: Companies that have compliance programs can and are able to service Main Street America as well as Corporate America, but companies without compliance programs are finding it much more difficult to reach up in an attempt to sell to Corporate America. It’s becoming a race to the top, and safe and compliant products are paving the way. See what I mean in this previous post.
The ability to deliver safe and complaint products has been creating tiers in our industry for the past two years—and the pace is accelerating. I hear this every day through inbound conversations with suppliers and distributors. The divide is less on company size and more on the type of customers the company has or how it goes to market.
These two distinct groups want different things from their promotional partners. Obviously, compliance is good business for everyone. But when selling to the typical small business that doesn’t have much of a brand to protect, the conversation almost exclusively fixates on cost. If you have any hope of selling to Corporate America, however, there is opportunity to talk about something other than just price. You have the opportunity to sell the value proposition of safe and compliant promotional products.
Truly successful promotional products companies provide solutions rather than just logoed merchandise. There is truth to the common wisdom that “you get what you pay for.” So much truth, in fact, that the Chinese have their own version of the saying, “yi fen qian, yi fen huo.” This translates roughly into “one cent gives you one cent’s worth of merchandise.” Isn’t it worth the extra pennies to get safe and compliant products? Ask you customers and see if they care. I bet they do.
Brent Stone is executive director – operations for Quality Certification Alliance (QCA), the promotional products industry’s only independent, not-for-profit organization dedicated to helping companies provide safe products. A Six Sigma Black Belt, Stone has more than 25 years of in-depth supply chain management experience with extensive expertise in process design, development, improvement and management. He can be reached at firstname.lastname@example.org or visit www.qcalliance.org for more information.