Moving Forward

AN EARLY CLAIM

When Medlar and Rocker entered the document destruction industry in 1991, the advantage was that their company was one of the few competing in the Cleveland area. The disadvantage was that secure shredding was a relatively new industry that had to be explained to potential customers.

"In the beginning the biggest obstacle was educating and communicating the need for document destruction," Medlar recalls.

At that time, Proshred and its competitor Shred-It were cultivating an active market in Toronto, Medlar recalls, but that success was not necessarily translating to Cleveland. "Canada was clearly ahead of the U.S. at that time," says Medlar. He also remarks, "Up there they were using direct mail a lot, but that strategy wasn’t working as well down here. We think it was because small business owners in Canada were not overloaded with direct mail they way they are down here. Down here we throw a lot of it away without even looking at it."

After the five-year franchise agreement expired, Medlar and Rocker did not renew their agreement with Proshred. But they kept their mobile shredding trucks and remained in the business under the name Infoshred.net, located in the Cleveland suburb of Bedford.

Medlar, who earned an accounting degree from Northern Illinois University and attended the Executive Management Program at the University of Michigan, saw enough promise in the secure shredding business to want to stay in the game.

Even at that time, Medlar and Rocker had one of the few secure shredding firms in the Cleveland area, and the industry was still unfamiliar to many potential customers. But that was about to change.

VISIBLE IDENTITY

In the late 1990s, as Medlar’s Proshred franchise expired and gave way to Infoshred.net, the spotlight began to be cast on document destruction, and new competitors began entering the field.

Among the many aspects of the Enron meltdown were tales of frenzied shredding at the company as well as at its accounting firm, Arthur Andersen.

While this is not the shredding application that the document destruction industry wishes to tout, it did help draw attention to paper shredding as a way of making sure information doesn’t get into unwelcome hands.

The late 1990s and the early part of this decade also saw increased activity in the credit fraud arena, with fraud often perpetrated by those who had obtained account or personal information from un-shredded documents thrown into commercial waste bins at offices and shops.

"The media focus on identity theft and the discussion of legislation in many states has brought the level of visibility way up," says Medlar. "And now we have FACTA and HIPAA, and anyone who has visited the doctor recently knows that the privacy forms are distributed and that there is a need to keep information private."

For Medlar’s business, the FACTA (Fair and Accurate Credit Transactions Act) rules are providing the most widespread opportunity. "I think FACTA, for us, has brought in more of the smaller types of businesses who heretofore may have been flying under the radar screen."

HIPAA (Health Insurance Portability and Accountability Act), as well, has been of interest to Cleveland’s medical community, which includes the world-renowned Cleveland Clinic hospital system.

But small business and health care are just two portions of what Medlar says is a very diverse base of customers in the Cleveland area. "There is a manufacturing base, there is world-class health care, there are accounting firms—our market is good in that it is widely varied," he comments.

Infoshred.net also uses a tie-in to its United Van Lines sister company to solicit additional business. "There are opportunities to tie the two together in terms of commercial moving jobs," says Medlar. "The last page of our moving brochure has information on shredding under the heading ‘Lighten the Load.’ It encourages companies to have a clean-out day for obsolete files and paperwork, and thus save the trouble of moving those extra, unnecessary boxes."

STAYING CLOSE

Cleveland’s market is diverse, and the overall northern Ohio market that is within reach for Infoshred.net is large, including not only the 1.5 million people in the Cleveland area, but also the nearby cities of Akron and Lorain and even into Youngstown and Canton.

Achieving success from a diverse range of businesses in this large market still comes down to the core focus of customer service, Medlar says.

"You have to know your market and you have to stay close to each customer," Medlar remarks. He says a part of the job he enjoys is picking up the phone to call customers as well as being on hand to answer the phone. "I try to answer the phone sometimes, and it’s good because you never know what’s going to happen when you field a call. You might find something out about a customer inquiry that can be strategically helpful."

Medlar is quick to point out, though, that the success of Infoshred.net is not a solo endeavor. "Hiring good people, listening to them and retaining them is a key to customer service," he remarks. "One of the ways we emphasize customer service is we try to be very judicious in hiring."

He remarks that the company’s "drivers have been with us a long time, and Kathy Hannah, Infoshred.net’s director of administration, has been working with me since before Infoshred.net even started."

Employees throughout the organization work toward the same goal of superb customer service, says Medlar. "We just preach that if we’re going to get the business and keep the business, we clearly have to be very professional and each of us has to do our job in a professional manner," he remarks.

Currently that job starts with scheduling routes for Infoshred.net’s two mobile shredding trucks. In addition to servicing commercial customers with regularly scheduled container service, Medlar says the company also has a healthy percentage of purge business, thanks in part to its related moving and storage businesses.

All of the company’s shredding is performed by the two trucks on site at customer locations. Although in theory Medlar’s co-located moving, storage and mobile shredding facility in Bedford may offer enough room to host a shredding plant, the company has not chosen to enter that segment yet.

The company’s two Shred-Tech 25GT mobile shredding trucks can each tear through up to 4,000 pounds of documents and files per hour, which Medlar says offers him enough capacity for even large purge jobs.

The vast majority of what Infoshred.net destroys consists of documents and paper files that yield a recyclable grade of scrap paper, although Medlar notes his trucks have destroyed a load of counterfeit Gucci handbags and that "we are getting more requests to destroy electronic media."

Medlar indicates that his trucks "seem to be able to do almost anything we ask of them" in terms of shredding materials beyond paper. "The issue, then, is pricing," he says. "We do some sample shredding to see how long a job will take and we also usually add a dump charge on products or electronic media because we have to take the shredded materials to a landfill."

SECURE FUTURE

In addition to sturdy, reliable shredding trucks and employees focused on customer service, Medlar says Infoshred.net’s future financial health also depends on maintaining a rock-solid security record.

"Focusing on security is not just important for us as a company, but for us as an industry," Medlar says. "My concern is whether all of the new competitors are following the NAID (National Association for Information Destruction) guidelines and whether they are doing what they are supposed to be doing relative to security."

Medlar credits NAID for "doing a good job of being the recognized leader on document security" and also is optimistic that regulations such as HIPAA and FACTA will continue to create more business opportunities for secure shredders. "In terms of regulatory issues, I believe we will continue to see state and federal legislation protecting information; hopefully fines and penalties will continue to encourage compliance," he remarks.

Even with increased business, Medlar acknowledges that at the same time the competition is much fiercer. "The concern we have is competing with the companies with deep pockets and with what they can choose to do with their pricing," he says. "On the other hand, they didn’t get to be where they are by cutting prices down to where there is no margin left in the business. In any case, we believe we can be more efficient because we know our customer base better."

Despite the increased competition, or maybe even because of it, Medlar still enjoys what he is doing and sees good things ahead for Infoshred.net.

"We remain enthusiastic about this business," he says. "We are always open to new opportunities and we have seen many come along in the past 15 years. Document destruction has grown to become a large service business with more growth to come that is still out there for us to pursue."

The author is editor of Secure Destruction Business and can be contacted at btaylor@gie.net.