The promotional products industry is driven, unfortunately, by price. While many suppliers fiercely protect their intellectual property, the fact is that it’s still likely somebody is selling something perceived by end-users as the exact same thing – for less. A recent conversation with a supplier complaining about not being able to differentiate from other commoditized products was particularly difficult to listen to. This supplier spends a lot of time and money advertising that the biggest product differentiator they offer is, wait for it, a better price.
There is only one competitor to lowest price, and that is value. If neither the distributor nor the end-user client can explain why they should pay more, then they shouldn’t. To justify a higher price, you need to be able to demonstrate there’s a difference in what you offer. It’s that difference that creates the value. For example, everybody claims to have better customer service, but do you? Do you really believe that? Because if you don’t, then how do you expect to sell that value to a client?
How about offering a difference that is more objective and measurable – like how long something will actually last? If your client has a disposable expectation, then it will be hard to talk about cost of ownership. But, if they expect something to represent their brand by lasting and working properly over time, then the conversation can move away from purchase cost, and on to cost of ownership. For example, let’s look at tires for the family car. If you’re selling the car tomorrow, then the least expensive may work just fine. But, if you plan to keep it, the premium-priced tire may well have a higher initial purchase cost, but if it lasts 20,000 miles longer than the competitor, then the overall cost of ownership is actually less. You just need to be able to help with the calculation, and that’s hard to do if the conversation is just about unit cost and discount.
The same supplier offering commodities and selling on price is also overlooking the differentiator of product safety. This supplier “couldn’t afford it selling on so little margin.” But, what if the rest of the supply chain – distributor, end-user client, and consumers – thought they couldn’t afford NOT to? Potential product failure is a pay now, or pay later proposition. You can either choose to invest initially in products that have been manufactured responsibly, or put yourself and your organization at risk for costs of recalls, fines, lawsuits for product liability, and the intangible value of brand affinity loss. Product quality and product safety – these are two ways to differentiate yourself from the commodity crowd.
A couple of recent developments involving the Consumer Product Safety Commission caught my eye. First, you may remember all the safety issues the last two years with the rare earth magnets once popular as executive gifts in our industry. Companies like Buckyballs and Zen magnets were in a fierce battle with the CPSC to avoid recalls stemming from children being injured when the magnets were ingested. The arguments involving proper packaging, warning labels, and intended user group raged on. While it may be too little and too late to breathe life back into the company, the U.S. Court of Appeals for the Tenth Circuit agreed this month with Zen Magnets in a divided opinion, saying the commission didn’t follow regulatory guidelines regarding the magnet ban and ruled in favor of Zen to allow the re-importation of the magnets.
At nearly the same time, the CPSC was sued by the Philadelphia Inquirer claiming the agency withheld records concerning the IKEA recall of 29 million dressers with tip-over risk. From the complaint filed in Federal Court, “plaintiffs hoped that CPSC would be more forthcoming than it had been previously, given the enormity of the recall and the fact that public scrutiny regarding what happened with the Ikea dressers could help the agency better address similar situations in the future.”
The newspaper has consistently reported on deaths of toddlers from Ikea dressers involved in tip-overs and seeks CPSC records under the Freedom of Information Act regarding its investigations and talks with Ikea. CPSC spokesperson Scott Wolfson told the Inquirer, “We are an agency that strives to work in the sunshine, so we are reviewing the suit at this time and certainly will be responsive to it.”
With all this CPSC news, there is also the new administration, and a likely change away from current chair Elliot Kaye. After Donald Trump takes office, Kaye is expected to step down as chairman to become a commissioner. Last month, Kaye introduced a new initiative to help the agency get a broader understanding of the battery industry and move from the “recall agency” to prevention, rather than resolving hazards after the fact. Kaye told NPR, “My hope is now with the election and potential leadership change here, that that work is not scuttled.” We’ll just have to wait and see on that one.
Jeff Jacobs has been an expert in building brands and brand stewardship for more than 35 years, working in commercial television, Hollywood film and home video, publishing, and promotional brand merchandise. He’s a staunch advocate of consumer product safety and has a deep passion and belief regarding the issues surrounding compliance and corporate social responsibility. He recently retired as executive director of Quality Certification Alliance, the only non-profit dedicated to helping suppliers provide safe and compliant promotional products. Before that, he was director of brand merchandise for Michelin. As a recovering end-user client, he can’t help but continue to consult Fortune 500 consumer brands on promo product safety when asked. You can also find him working as a volunteer Guardian ad Litem, traveling the world with his lovely wife, or enjoying a cigar at his favorite local cigar shop. Follow Jeff on Twitter, or reach out to him at jacobs.jeffreyp@gmail.com.