Rationalizing Your Way Out of Responsible Promo Sourcing
Have you ever rationalized your way out of making good choices? Of course! We all have. Take diet and exercise, for example. Every January, thousands (millions?) of people make the age-old resolution to eat less and move more. They join gyms and healthy food delivery services, buy Fitbits, take on fitness challenges and post about their triumphs on social media.
A few months pass, and the intensity starts to fade. We start rationalizing our way back into our old behaviors—like eating that cupcake at the company function (one cupcake can’t hurt, it’s my cheat day!) or missing that spin class at the gym (I’m really tired and need to run these errands!).
The one-off slip-up wouldn’t be a big deal if these occurrences really were just anomalies; it’s about progress, not perfection. But in reality, the little lies we tell ourselves in order to take the easy road just lead us right back to the starting point: Five pounds heavier wearing pants that are too tight.
Why do these lying scenarios happen? It’s not like we’re bad people. Or lazy. (OK, maybe a wee bit lazy, especially if "Supernatural" is on TV.) In fact, choosing the path of least resistance just might be hard-wired into our brains. When a task requires significant effort and/or takes us out of our comfort zone, “the brain thinks like an economist and runs a cost-benefit analysis,” according to this Inverse article. “If the ‘cost to act,’ as the researchers call it, is too high, it can bias our decision-making process, making us less likely to do things.”
This behavior isn’t only happening in our personal lives; it’s rearing its ugly head in our professional lives, too. And that’s where things can get a bit sticky.
Being Irresponsible With Responsible Sourcing
The workplace is all about our efforts being rewarded. Clock in at 9 a.m., clock out at 5 p.m., and every two weeks money is direct deposited into our checking accounts. Hit additional metrics and that coveted bonus check arrives at the end of the year. Of course, we want to maximize the reward received with the least amount of effort expended due to the cost-to-act programming in our brains.
When a reward is tempting enough, however, people may decide to break their own moral codes to gain the desired prize. “Afterward, they’ll tell you exactly how they were justified: ‘It wasn’t as if anyone was harmed,’ ‘I was only borrowing …,’ ‘My boss told me to’ or ‘It’s our customers’ responsibility to read the fine print,’” writes Katherine Bowers in this Insurance Journal article.
This rationalizing process is called “moral disengagement,” according to Darden Professors Sean Martin and Jim Detert. “People are self-interested, but we don’t like to face that about ourselves because we also have a strong need to see ourselves as good people, they [Marting and Detert] argue, so we unintentionally, and quite effortlessly, use a series of cognitive maneuvers to justify self-interested choices that don’t align with who we say we want to be or what we want others to think about us,” Bowers continues.
This moral disengagement can be seen all throughout the promotional products industry when it comes to responsible sourcing of safe and compliant goods.
Sure, it sounds good for distributors to say they support suppliers who offer socially compliant, safe, high-quality and environmentally conscientious merchandise. But the reality is that most PPDs feel that buyers are squeezing them for every penny, so they don’t even offer the documented safer solution that may technically cost a bit more upfront but can mitigate the risks of any incidents that can empty bank accounts and irreparably damage a buyer’s brand reputation.
To justify taking the easy way out and not having the harder, more educational conversations with their customers, both suppliers and distributors tell themselves all kinds of lies: “My customers aren’t asking for it,” “My competitors aren’t doing it,” “It’s too expensive” and “No one has been caught.” What they may not realize is that these lies are costing them business. Let's look at each one:
1. My Customers Aren’t Asking For It
This is one of the most common excuses, but c’mon man, it’s one of the most ridiculous. There’s a perception that our industry is nothing but a bunch of order takers, and with this kind of excuse, it’s no wonder. If we want to be taken as a serious advertising medium, then we better start acting like one. Part of this responsibility includes being proactive.
By definition, proactive means to be “anticipatory, to act in advance to deal with expected difficulties.” Thus, in order for us to be proactive and look out for our clients’ best interests, then we must prepare to solve an issue before it becomes one.
Let’s think about that. What if your client didn’t ask about the price? Unless you’re clairvoyant, you wouldn’t know if they wanted to spend $.50 per unit, $5 or $50. So would you roll the dice and pick out any ol’ item from the catalog and hope for the best? Of course not. You would discuss what budget has been allocated and then determine the best way to use said funds to meet their marketing objectives.
Same thing when it comes to product features, delivery date, and how your product or service offers a solution and meets or exceeds their needs. This kind of conversation should always be part of the sales process. It’s where you, as a promotional products professional, demonstrate how your company adds value and why the client should choose you over all other options.
So why would you not talk about their organization’s most valuable asset—its brand reputation? Waiting for the client to ask about compliance, regulations, and ethical and responsible sourcing it not only irresponsible but also dangerous. Additionally, pretending that these issues are irrelevant not only makes you look incompetent, but it also sheds a poor light on the industry as a whole.
2. My Competitors Aren’t Doing It
Similar to the “customer isn’t asking for it” excuse, the “my competitors aren’t doing it” lie is just as preposterous. With this logic, you’re implying that you want to be exactly like your competitors by providing the same service—good or bad—that they do, offering the same price, not doing anything creatively different and mirroring their every move. Why?
Strategic advantage comes in the form of differentiation: Doing things your competitors are not doing to add value and get a leg up. Separate yourself from the pack by proactively talking about how responsible sourcing can help protect your clients’ brands. QCA works with companies, both on the supplier side via its Accreditation Program and the distributor side via its Advocacy Council, so they can add value through brand safety assurances.
3. It’s Too Expensive
Compliance isn’t free. Neither is running a successful business. You make investments in equipment, staff, technology, marketing, etc. Compliance is no different. Buyers expect their brands to be safe when using the promotional products you sell and, yes, it does take money to make this happen.
What many don’t consider, however, are the costs of not having a compliance program in place.
The full cost of conducting a product recall is dependent on many factors and is often hugely underestimated. There are three primary factors that drive the cost to execute a product recall: Health and safety of the public, scope and severity.
Let’s look at an example that made major headlines back in 2015 and is still in the news today: The Volkswagen recall where 300,000 diesel engine cars were taken off the market because the automaker cheated on American emissions tests. Between the estimated fines, repairs and legal costs, it’s projected that Volkswagen will pay out more than $30 billion. Even for a multinational conglomerate, that’s some serious coin.
Obviously, cars and promotional products are vastly different. But this example illustrates just how expensive it can be to put a non-compliant product into the marketplace only to have to recall it later.
Initial recall strategy meetings may discuss financial outlays for lawyers, fines, recall notices shipping/logistics for returned products, repairs and disposal. But there are many more hidden costs that can quickly mount up, things such as a consumer hotline, PR and social media campaign, packaging redesign, post recall advertising, specialists and labs for testing, the value of lost business (from this product and any other products you sell) and the overall costs of a shutdown for any required manufacturing changes. To get a sense of what a recall can really cost, use the RQA Cost Of A Recall Calculator.
Then there’s an often-overlooked facet: Future product innovation. In the Harvard Business Review Working Knowledge article “The Hidden Cost Of A Product Recall,” author Danielle Kost writes:
There’s also a second, less studied wave of damage, as competitors ramp up product development efforts to snap up displaced customers and solidify market share gains. This double whammy makes recall prevention and effective remediation more important than previously thought, says Ariel D. Stern, an assistant professor of business administration at Harvard Business School, where she is the Hellman Faculty Fellow in the Technology and Operations Management Unit.
"Product recalls slow many types of innovation for the firms that experience them,” Stern says. “At the same time, we see that competitors are likely to accelerate their own innovation activities to take advantage of these weaknesses."
And there’s more. Another issue to consider when dealing with a product recall is the impact it can have on a brand reputation. Depending on how a recall is handled, it can have lasting negative effects on sales. This loss of income coupled with the financial outlay of paying for the recall is often enough to cause a company to file for bankruptcy.
All of these factors combined make it hard for any company to withstand the financial blow of a recall, but it’s especially hard on small businesses such as the majority that comprise the promotional products industry. Why? Because a product recall, lawsuit and/or loss of business could wipe out any financial reserves and, if unable to recover, these firms may have no choice but to close their doors.
Sure, recall insurance is an option, and it serves to soften the blow. Unfortunately, it usually does not cover all the costs and does nothing to restore a brand’s reputation.
Bottom line: You have to ask yourself what is really more expensive: Investing in a proven compliance program, hiring a compliance manager, training your team and implementing incremental improvements OR paying to implement a recall, hiring lawyers, paying fines and destroying yours and your client’s brand reputation.
4. No One Has Been Caught
Seriously? In today’s world with social media and people just looking for any reason to drag someone down, if you think no one has been caught, then you simply haven’t been paying attention.
Here’s an example straight out of the headlines. Recently, the Spice Girls created #IWannaBeASpiceGirl charity T-shirts for a campaign to empower women and demand equality. Unfortunately, the tees were manufactured at a Bangladesh plant under allegedly inhumane working conditions that are not even livable, let alone empowering to the female employees. Clearly, this undermines everything the campaign stands for, and it could have been avoided with the proper policies and procedures in place to vet the factory before production began.
And here’s another example, this time an Associated Press investigation uncovered that Badger Sportswear imported garments manufactured in a Chinese factory that was using forced labor. “Barbed wire and hundreds of cameras ring a massive compound of more than 30 dormitories, schools, warehouses and workshops in China’s far west. Dozens of armed officers and a growling Doberman stand guard outside,” the report states.
Much of Badger’s sportswear ends up on college campuses, which didn’t take kindly to the allegations. Even though Badger immediately stopped using the factory in question and didn’t ship any more existing inventory from the site, colleges dropped Badger products from their lineups like it was fifth period French.
According to initial reports, University of Evansville was one of the first to publicly acknowledge removing Badger merchandise, and Appalachian State terminated its licensing agreement with Badger and was no longer selling the company’s products. Additionally, at least four colleges in Maine— Bates College, Bowdoin College, Colby College the University of Maine—took similar action. Texas A&M University also followed suit.
While the total number of schools that have discontinued using Badger Sportswear is unknown, what is clear is that this kind of mistake is costly in a number of ways—from the immediate lost business and reputation damage (which impacts future business) to lost inventory, lost productivity (as employees are taken away from their traditional duties to fight the crisis) legal fees and more.
You may have seen headlines of lithium ion chargers being recalled because of potential fire danger. Recalls often sound like a bad thing; quite the opposite. Recalls are actually part of a comprehensive compliance program so that in the event a problem arises, there are systems in place to proactively remove the product from the marketplace so that no harm comes to people or property.
Being transparent when there is a problem is very important to today’s buyers. No good can come of trying to cover up an issue because eventually the truth comes out. Showing customers and the public at large that recall procedures are in place (and these procedures are tested regularly though a documented compliance program) goes a long way in keeping consumer confidence and reducing the chance of lost business due to a faulty product.
There’s a reason CEOs have mentors, athletes have coaches and orchestras have conductors: Accountability. Remember, our brains are hard-wired to find the path of least resistance. So no matter how hard a person or company tries to self regulate, they always fall short.
In terms of brand safety and responsible sourcing, the promotional products industry has accountability to no one. We’re only self-regulated. And therein lies the problem.
“It is simply unacceptable for our government to allow corporations to decide whether products and services are safe for the public when those companies have an overwhelming incentive to make products and services merely appear safe, so they can reach the market,” writes Amit Narang in the article “Corporate Self-Regulation Is Failing.” This fundamental conflict of interest is at the heart of why industry self-regulation doesn’t work.”
I’m not suggesting that the government should regulate the promotional products industry, but it will if we don’t get our act together. So to keep the government out of our business, we must take responsibility and hold ourselves accountable. That’s why QCA exists: To ensure accountability and independent validation of corporate responsibility throughout the promotional product industry’s supply chain.
Building your own comprehensive compliance program isn’t easy. You must follow stringent standards, which should be based upon a combination of state and national laws, international standards and industry-accepted best practices that are recognized for their strength and effectiveness.
Why reinvent the wheel when you can tap into an existing, proven resource that not only addresses social responsibility and product safety but also product quality, environmental stewardship and supply chain security? It’s more cost effective than developing your own program plus you have the accountability from an outside third party. With that kind of support, there won’t be anymore rationalizing your way out of responsible sourcing. And your business will be all the better for it.
Since 1998, Lisa Horn, CAS, (a.k.a. The Publicity Gal) has been reporting on the issues that matter most to the promotional products industry. Currently, she writes about brand safety and responsible sourcing on behalf of Quality Certification Alliance (QCA). Reach her at email@example.com.