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.