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article work in a company with no compliance

program of which to speak.

Where To Start

As a consultant, most of my new clients

call me with a similar question:

“We have a great opportunity with a big

client, but they’re asking us about our com-

pliance program. We don’t have good answers

for them. Can you help?”

What follows is a scramble to bolster an

underdeveloped compliance program—or

create one—in order to win the sale.

Unfortunately, this only works about half the

time. Companies can tell when you are

scrambling, and the companies that already

have a compliance program usually come out

on top. The fact is, you just can’t compete

without one these days.

The bigger the client, the more likely

compliance is going to be a requirement to

do business; it’s no longer just a nice-to-have

option. And lately the end buyers’ concerns

are not just about being

legally

compliant—

many large companies and organizations are

pushing for new levels of transparency and

demanding standards above the U.S. regula-

tory limits.

This era of transition brings a lot of

opportunity. For years, promotional products

flew under the radar, but after several recent

recalls and Proposition 65 lawsuits, our

industry is in the spotlight. End buyers,

however, don’t want to spend a lot of time

learning about product responsibility—they

want a one-stop solution where they can buy

products that are already compliant and safe,

and they are looking for partners who can

provide this.

I see the current interest in compliance

now being driven by a carrot instead of a

stick. In other words, the promise of increased

sales, instead of the threat of a costly recall, is

now the incentive to become compliant.

When you give a customer the safe, one-stop

solution they need, they are relieved and

grateful, and often will drive more business to

your company simply because it’s easier than

trying to find other compliant companies.

There’s a trend among companies to reduce

the number of vendors they work with to

lessen their risks and leverage volume, and

most of the time companies without a com-

pliance program are the first to be cut.

So how do distributors create a compli-

ance program that will bring in more sales

while reducing business risk? Here are five

ways you can impress your clients:

1. Have a program in place.

Start a compli-

ance program before you’re asked about it

by a client. Even if it’s not perfect, most

end users will be impressed if you have a

foundation already in place. Typical first

steps include developing a testing plan for

the products you sell and organizing the

related documentation so it’s available on

demand. If any of your products might be

considered a children’s item, having a pro-

gram in place is especially critical. (Tip:

Any product can be considered a children’s

item if its decoration is determined to

appeal to children.)

2. Get help; don’t try to go it alone.

Experts

can help you navigate the regulatory land-

scape and give you product-specific testing

strategies. PPAI offers a number of

informative classes at live events, trade

shows and through live and on-demand

webinars that can give you a working

knowledge of the main issues. Also, don’t

rely on just one source of information, par-

ticularly if the person giving you that

information is also selling services. It can

get expensive.

3. Commit to an integrated program.

Compliance programs that operate inde-

pendently of other areas of the company

are usually not the most effective.

Programs that have an impact on how all

departments operate including sourcing,

sales, quality assurance, etc., take a better

approach. Compliance is a group effort.

Also, assign an existing employee or hire a

new employee to take on the role of com-

pliance manager or a similar title. In many

cases, it’s a full-time job. Choose carefully,

though; that person will likely be in con-

stant contact with every manager in your

company.

4. Get the word out.

Find ways to consis-

tently promote your compliance program

to your customers. Make sure your sales

force can speak to compliance and trans-

parency, and post your company’s compli-

ance approach on your website. Some big-

company prospects want to operate within

an environment of compliance but don’t

know how to manage it. Offering them a

convenient solution can lead to exclusivity

and higher-volume orders.

5. Prepare for increased costs.

There is no

getting around it; compliance will require

an up-front investment and possibly the

addition of a headcount or two. As you

learn more about your supply chain and

start product testing, you may discover why

some of your suppliers’ prices were so inex-

pensive and may be forced to eliminate

them from your supply chain. Add to that

the costs related to testing, auditing and

using more expensive materials, and you

might have to raise your prices slightly to

cover your costs.

When it comes to compliance, one size

does not fit all. The cost and breadth of your

compliance program will depend on many

factors, including the size of your customers

and the types of products you offer. In many

cases, you can make small changes at the start

that have a big impact toward increasing

safety and reducing risk.

For companies currently running a com-

pliance program and for those considering it,

it’s important to know that the biggest chal-

lenge with investing in it is competing with

those who won’t. It’s not uncommon for

companies to become frustrated when they

lose a sale to a competitor who can offer

products less expensively because they use a

non-compliant supplier or operate within a

non-transparent supply chain. Unfortunately,

some large end-user companies perpetuate

this; they publically demand more compli-

ance and transparency but don’t discipline

their buyers who still chase pennies. They

want it both ways.

I believe this is temporary, however, as I’ve

personally seen dozens of companies reach

that tipping point and realize that spending a

little bit more for a compliant product is

worth it. In a few years, that kind of thinking

will be the norm. And those companies who

are first to market with a good compliance

solution will still be around to see it.

80 •

PPB

• OCTOBER 2015

THINK

Josh Kasteler is a compliance

consultant with experience that

spans several industries,

including a stint living in Asia

and working in Asian factories.

He can be reached at

josh@promocompliance.com.