Golden Opportunity

Over the past few years much has been written about product safety, the impact it has on our industry and the liability issues should an incident occur. Some industry suppliers have spent hundreds of thousands of dollars establishing processes and protocols, testing products, auditing their supply chains and, in some cases, seeking third-party accreditation for their efforts. So why all the fuss, especially when a vast majority of industry members still do not seem to grasp the relevance or recognize how it applies to them?

Obviously, there is a disconnect when so many seem less than concerned with the ramifications should the product they sell cause harm to an individual or a company’s brand image.

I suspect one reason may be that most distributors are confused and even intimidated when they hear words such as: test reports, tracking labels, conformity certificates, product safety, social responsibility, Prop 65, federal product safety laws, state product safety laws, etc. Another concern could be trying to differentiate what is and is not a children’s product. Finally, and likely most significant, is the impact that compliance with regulations has on costs. Oh, and I would be remiss if I did not mention the fact that this subject—product safety—could not be any more dry.

Since the majority of product safety articles deal with the details of the laws and why you need to care about them, I have chosen to go another direction with this article. Because so many distributors are uncomfortable talking about product safety with their clients, those who can speak about it can use it as an advantage in the marketplace. This is especially true if you are a distributor calling on schools, youth organizations, hospitals, religious organizations and fund-raising organizers. This golden opportunity applies equally to large Fortune 1000 companies where product safety is aligned with the company culture and brand image.

Companies such as Coca-Cola, Disney, Southwest Airlines, Mattel, McDonald’s and most major colleges, just to name a few, expect their vendors to have proof of appropriate business procedures in place before they will even consider doing business together.  And it doesn’t stop there. Many small- to medium-size companies are implementing similar sourcing initiatives. This is where you can differentiate yourself.

By establishing and adhering to general operating guidelines for how you source promotional products, vet your suppliers and share information with suppliers, you can effectively gain an advantage over your competitors who are selling on product and price alone. So you say to me, “Tim, I sell creativity and solutions, not product and price!”  Well, it’s subjective, as your perception of creative may be completely different from that of your client. Creativity and solution-based consultative selling are critical differentiators in their own right, and I do not seek to downplay that fact here. However, they remain subject to interpretation by the client. Also, any distributor who has attended an industry education session can duplicate a few ideas or slogans to effectively pass themselves off as a creative solutions expert. When this happens, what is your point of differentiation?

The way to distinguish your business is to bring something to the table that others do not. And in the case of product safety, many are not talking about it because of lack of understanding, unease with the subject or lack of acceptance that product safety is an issue. Therefore, the first step is to make the decision to accept this fact: Product safety is not going away, and you will need to address it at some point if you continue on in this business. It doesn’t matter if you agree with the regulations, with how they have been implemented or whether you think they are an impediment to your business. The fact remains that these regulations are now the law.

Over the years I have heard dozens of reasons why product safety compliance is a waste of time.  Some of the excuses have been:

  • My customers are not concerned with it.
  • My customers have not asked about it.
  • I do not see it as a major issue.
  • It’s more of a West Coast thing.
  • I do not have the time and resources to manage it.
  • I’ll address it when it really becomes an issue with my customers.
  • No one has time for that.
  • It all sounds good, but in the end it’s still all about price.
  • It does not produce revenue.
  • I see value but do not know where to start.
  • It’s just another example of government destroying small business.

Unfortunately, some of these same people have come to me seeking assistance later in the game when they are frantic over the possibility of losing an account or not getting an opportunity in a request for proposal because they did not have documented best practices in place. I hate to say it this bluntly, but if you are facing these situations, you have already lost the opportunity with that client and need to move on. Examples like this are real and demonstrate why you cannot wait to learn about product safety. By investing your resources early on you will protect yourself from losing revenue later. “An ounce of prevention is worth a pound of cure,” said Ben Franklin.

Whether it is the selling advantage, risk mitigation, a sense of responsibility or a combination of all these factors, the largest distributors are taking product safety seriously and it has become a major selling advantage. I understand the argument that the majority of distributors outside the top 20 to 30 simply do not have the resources available to hire a supplier relations or compliance manager. However, that does not have to be a road block to doing what is right and increasing your sales. And, yes, it is possible for distributors of all sizes to implement best practices which enhance the value of their offering.

Forward thinking companies will find a way to make it work with the understanding that addressing product safety now is essential to their long-term success. An example of this type of forward thinking is distributor MadeToOrder (UPIC: MTO). The California-based company that already had a reputation as an industry compliance advocate has recently outsourced the formalization of its supplier relations and compliance program. Upon complete implementation of the program, the company will essentially be trained to manage the day-to-day operational aspects of its compliance program without the overhead that goes with it. The result is a program robust enough to rival the largest distributors in the industry and thus level the playing field. Talk about a competitive advantage! 

Differentiating Your Business

So now that you understand that acceptance is essentially non-negotiable, let’s determine how you can use it to your advantage. Just a basic understanding of product safety will prepare you enough to at least raise the issue with your client. The more you talk about it and the more you educate yourself (several resources available through PPAI—see sidebar) the more comfortable it will become. With this comfort comes the fact that you will be seen by your client as knowledgeable beyond product and price. Do not lose sight of the fact that I’m talking about basic understanding of product safety; you do not need to be an expert.

Also, the fact that your competition is not talking about this subject will demonstrate your value as an informed industry expert, which will further enhance your credibility. Trust me here, brand image is important to someone in your client’s organization even if it is not important to your contact. At some point in time the subject will come up and the first person on the scene with the message will be the one to establish a solid foothold.

Now that we have determined how product safety can help you increase sales, what can you do to back up your talk? Simple: Establish documented proof of sound business practices intended to guide your decisions.

This does not have to be as overwhelming as it sounds.  Details of the steps needed are for another article entirely. However, a basic outline can be used as a starting point:

  1. Establish guiding principles for your company.
  2. Communicate these principles to your suppliers.
  3. Expect suppliers to have and or implement internal business processes that support your guiding principles.
  4. Implement industry best practices related to sourcing products and vetting suppliers.
  5. Work with suppliers that understand and share the same values.
  6. Communicate your principles and best practices to your clients.

As you get started, and regardless of where your own individual knowledge of product safety lies, I strongly encourage attending industry sponsored education workshops and webinars. PPAI has put together an outstanding series of product safety education in easily digestible formats for industry professionals at all levels of product safety knowledge. These education sessions will provide the needed comfort level to effectively position your business.

With this new knowledge and, ultimately, new comfort level having been attained, you will find yourself in a position of control as you talk openly with your clients about product safety and thus earn their trust while at the same time separate yourself from the competition. Once you establish your guiding principles and protocols, you can further validate your efforts, do your due diligence and cement your commitment to brand protection by politely challenging your client to seek the same proof from your competitors. Many, if not most of your competitors, will not be able to provide anything comparable, which means you’ve just solidified your position even more.

At the end of the day, it is about making sales, and in order to make more sales, you need to increase penetration into existing accounts, establish deeper relationships with clients and suppliers, gain more opportunities within larger organizations (some you may have thought were entirely unattainable before), and have the ability to close any doors still left open to your competitors. Understanding and accepting product safety requirements and the effect these regulations have on this industry can and will provide you with a unique selling advantage for years to come.

 

Tim Brown, MAS, has more than 19 years of supply chain experience in addition to six years of B2B selling experience. In 2011, he was named a PPB Rising Star, recognized for his industry-leading efforts in product safety and supply chain best practices. He was president of the Tri-State Promotional Professionals Association (TSPPA) in 2012 where he presented industry product safety courses. He has also served on the QCA Distributor Advocacy Council and is currently a member of the PPAI Product Responsibility Action Group (PRAG).    

 

>>Get Up To Speed Now
Product safety isn’t a fad; your clients expect compliance now. Reserve your seat now for the PPAI Product Safety Summit, August 14-15, 2013, in Chicago, Illinios. This day-and-a-half program explores the latest developments, best practices and most-pressing product safety issues, as well as the business implications, challenges and opportunities associated with compliance. The industry’s most respected companies will be in attendance. Shouldn’t you be there, too? Get details at www.ppai.org and click on Education and Product Safety Summit.

 

 

One Response to Golden Opportunity

  1. Jim Franklyn, InkHead says:

    excellent article! We choose to celebrate product safety and use it as a tool to insure our clients that the products in our industry are safe, we do not use product safety as a “scare tactic” or to create “fear” in the consumers minds. As an industry we need to advocate safety and present it in a way that is positive, we will not go the negative route.

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