Safety First

Do you ever think about the safety or overall sourcing of your promotional items? Probably not, but you should.

Last year California State health officials recalled 300,000 lunch boxes with dangerous levels of lead in them. Ironically, the agency had used these lunch boxes as promotions at healthy-living events.

Until recently, a major federal safety agency gave branded bottle openers to school children after they attended agency-sponsored anti-drug presentations. While safe for use, the openers sent the wrong message, since beer is one of the few beverages that still require an opener.

In March ’08, Avon recalled 113,000 Cozy Warming Polar Bear gifts with purchase. Heated in the microwave, the stuffed body-warmer bears ignited, thus burning twice — users literally, and Avon figuratively.

Being a responsible marketer in this day and age isn’t easy. Not only must marketers plan and measure the conversion of their marketing dollars into qualified leads and closed sales, they must also consider all aspects of their marketing impact. Marketing messaging must be responsibly accurate and transparent, and all marketing programs must be well aligned with the business objectives — and often, today, with the company’s strategic philanthropic focus. Oh yeah, don’t forget the bottom line, too.

“It takes a lot more than being creative to be successful in today’s promotional market,” notes Brett Marz, founder of promotional product company Bamko. “Starting a few years ago, our clients were asking us to guarantee that the products we were supplying them were safe and not being made by children in sweatshops. We decided that Bamko needed to be more than a pass-through supplier, but rather a promotional product auditor and advocate.”

When purchasing promotional products, marketers must consider the safety of the product, the ethical treatment of workers building the product, and the function of the product.

Companies that aren’t careful about their branded giveaways risk damaging their hard-won brand equity. When consumers think child labor, even decades later, they remember Kathy Lee Gifford and, more recently, Gap and Nike. Think “lead paint” and many Wikis include in the definition “Mattel.” These examples of child labor and safety case studies will remain in people’s minds for a long time to come. They will continue to taint the brands regardless of anything even the best marketers can do.

Even if the situation is lower profile, when promotional items go wrong, the tangible and intangible costs are very high.

In September ’07, 140,000 mugs given to Nissan test drivers were recalled due to unsafe levels of lead that caused at least one person to get sick.

In October ’07, Dunkin’ Donuts recalled 100,000 Halloween-themed glow sticks for a potential choking hazard.

In April ’08, Nintendo recalled 77,000 character lapel pins for possible lead contamination.

In 2007, there was $700 billion in U.S. damages caused by unsafe products, many of which were promotional items. Marz says he has witnessed promotional product recalls costing companies anywhere from $500K to $50 million just to recapture the faulty products. This is not including the costs to the brand and future sales. And as if that isn’t enough, the U.S. Consumer Safety Commission is now imposing large fines that further increase the overall liability and negative PR exposure of both the manufacturer and the buyer/distributor. Currently, the maximum fee is $1.8 million, but the U.S. House of Representatives proposes to raise it to $10 million, and the Senate proposed to raise it to $20 million.

The cost of these situations includes informing consumers through multiple channels about the recall. This often includes rallying support from distributors, franchisees and others who will be less than happy about being involved in such a negative issue. Often times, companies must provide consumers with some incentive, such as a replacement product or cash back, in order to get them to bring in or send back the recalled product. If the products are being reissued, then the company must pay for new products to be made. Web site changes, PSAs and other communications must be created and launched immediately. And in the worst possible scenarios, if someone is injured or killed, there are the lawyers and individual and/or class action lawsuits. All of these crisis management activities further detract from revenue-driving marketing activities. And of course, the challenge of repairing the brand is of utmost concern. Clearly, whoever said any PR is good PR never had to deal with a recall.

The Boston College Center for Corporate Citizenship has all these things in mind when it plans its annual international conference. “While we are careful to use eco-friendly venues and recycle as much as we can, we also work hard to ensure that the hundreds of books, bags and other giveaway items that we provide to the attendees are all ethically and environmentally manufactured,” says Cheryl Kiser, the group’s marketing director. “Yes, we have to be more proactive in this because of who we are. But, fortunately, now there are a number of vendors that support these requirements that any company can and should utilize more socially conscious promotional products.”

With the vast majority of the promotional items being manufactured overseas, it is often hard to monitor and guarantee the processes used by a vendor or a vendor’s supplier. Despite the various agencies overseeing product safety, or perhaps because of them, product recalls are at an all-time high. Bamko’s Marz offers the following tips to help marketers ensure that their promotional items are as safe and responsible as possible to avoid painful recalls or other such liabilities:

Always verify a vendor and their supplier(s). Make sure that your vendor provides manufacturing testing and auditing reports. In China, anyone can buy fraudulent testing and auditing reports quite easily. Therefore, make sure that your reports are legitimate by insisting your vendor use an established testing company such as SGS, Intertek, Bureau Veritas or UL.

Ask for the address of the factory and offer to sign a non-solicitation agreement. If your vendor does not want to provide you with this critical info, it is probably a sign that your vendor is going through a middleman — not good on many counts.

Perform a surprise inspection of the factory while they are in production, if you have the resources. If a vendor insists that the visit must be planned, this is a red flag. For around $300, you can have Asia Inspection (www.asiainspection.com) send an inspector directly to the factory floor, take pictures, and collect information on your behalf. Even if you don’t want to spring for the $300, the threat of a surprise inspection is generally enough to make a vendor’s true colors show through.

You can hire a promotional products supplier to do the auditing work for you. Not every promotional company can or will do this, so it may be worthwhile to seek out one that can act as your agent in confirming that your manufactured products are safe and ethically produced.

Corporate social responsibility touches everything in a company — from the internal and external communications to investor relations and the often-overlooked supply chain. While most companies continue to scurry looking for answers to how to make their products and corporate processes more eco-friendly, don’t forget to also consider your company’s marketing sourcing. Be it the paper you print collateral on or the giveaways at your next show, consider the implications of ignorantly ordering inexpensive, branded tchotchkes.

Alyssa Dver is the chief executive of Mint Green Marketing. She can be reached at [email protected].