The Big Hitters

Although the perception is that the growth in the U.S. economy comes from small businesses, many document destruction firms still strive to reach for the Holy Grail: contracting with global corporations that have offices in their cities.

These companies, often with multiple offices scattered throughout the country (and the world), can offer the biggest opportunities for document destruction firms.

At the same time, the sheer size of many of these corporations poses some significant issues, from trying to find the right person to deal with to setting up the logistics to handle a number of offices. Dealing with any or all of these factors can shrink any financial advantage that working with these large corporations may hold.

Contacting the right person is one of the first steps. Some decisions are made from a centralized location in another part of the country, making it more difficult for a smaller shredding operation to develop a business contact.

In discussions with document destruction firms, some note that security departments often handle the document destruction segment of corporate operations. Others say that the business may be handled by a central or on-site procurements officer, while others say on-site support staff may handle making destruction arrangements.

Ascertaining the correct department to work with is only the first of many steps. Opinions are mixed on whether multi-facility corporations are moving toward a national contract approach or adhering to an office-by-office scenario.

With companies that allow individual offices to set up their own programs, the task of competing for the business can be easier for small shredding firms. Instead of attempting to put together a comprehensive program to handle facilities throughout the country, a shredding firm can focus on servicing a customer regionally or locally. This often benefits modest-sized shredding companies.

For those corporations looking to put together a national account program, the biggest beneficiary can be the larger, national companies, such as Iron Mountain, Recall and Shred It. However, many smaller locally owned and operated companies say that they are not necessarily at a disadvantage.

While agreeing that more national accounts appear to be available, many of the regional operators feel they can compete for and often win these account bids.

For smaller, one-city confidential shredding companies, a big issue is ensuring that a company has the capability of servicing the account in areas where the shredding firm may not have a significant presence.

Some smaller shredding firms have begun working on a co-op approach with other shredding companies throughout the country. This may allow a shredding firm that does not have a presence in a certain area, to be competitive. DataGuard USA, Denver, Colo., has set up its www.Shred
Nations.com Web site as a way for national shredding firms and networks of co-operative local firms to compete for national accounts.

Shredding firms say there are comparative advantages and disadvantages to jobbing out the projects on an individual or regional basis or to focusing on a national approach.

The most obvious advantage of landing a large account is its overall dollar value. However, handling a national account is fraught with complications. While servicing an office in a densely populated area with significant business is an asset, working with a corporation’s smaller offices in more remote locations can eat up much of the profitability.

For smaller companies who are competing head-to-head with the national operations, the ability to demonstrate their standards is a big selling point.

The certification from the National Association for Information Destruction (NAID), Phoenix, is a procedure designed to establish standards for companies providing shredding services. The certification program covers such areas as employee hiring and screening, overall operations, the destruction process, insurance and other security measures.

Tom Simpson, Confidential Security Corp., Peoria, Ill., says that being NAID certified is a big selling point. Confidential is not only NAID certified, it also is ISO certified, though Simpson is not yet sure how much of an advantage that holds for the company.

Simpson says that while several years ago many corporate customers were not as aware of the nuances of the NAID standards, customers are becoming more familiar with the program. This gives an advantage to companies that are able to highlight their certifications.

Chris Ockenfels, regional manager of Document Destruction and Recycling Services, Cedar Rapids, Iowa, says one of the key issues for shredding companies is being able to provide some type of certification that the company is a legitimate operation.

Ockenfels says that while other certification programs are being developed with varying standards, most large corporations are more comfortable when they know that the company that they are dealing with is reputable. Being certified is a major step in that direction.

While price and cost are always significant factors, with all the legislation and regulations being introduced to guard against identity theft and protect personal information, having recognized certification gives a company a major advantage

With the constant barrage of identity theft concerns, many large offices are in a "cover-your-job" approach, Ockenfels says. If a shredding company can convey that it operates its business in a safe and secure way, it makes it much easier to develop the business.

While demonstrating that a shredding company runs a secure operation is a big step, Ockenfels also says that professional liability insurance reinforces the safety factor.

While many smaller document destruction companies touch on certification as a selling point, Recall, one of the largest document destruction and shredding companies in the world, sees size and scale as a major selling point with large corporate customers.

Colleen Golden, a spokesperson for Recall, an Atlanta-based division of Australia’s Brambles Inc., one of the largest shredding companies in the world, says that a key for the company’s success is the ability to use the same model for all locations. She stresses that Recall’s operations are all operated in the same manner, regardless of location. This, Golden says, should give the client a sense of security that the operations throughout its network of offices will meet Recall corporate standards.

"Recall is built around the concern of global standards," she says. "We have the same operating procedures, the same policies. A company can be assured that because we use common platforms, the material is handled in the same way."

Several sources noted that despite all the potential pitfalls of using a poorly designed shredding program (or having no program at all), many corporations choose a vendor strictly on a cost basis.

Some large companies can be extremely aggressive with their contracts, squeezing shredding companies for the best price possible. One shredding company executive said that while he has signed some long-term contracts, one customer continues to perform monthly service reviews as a way to reduce the price it is paying.

Simpson of Confidential Security Corp. says, "The bottom line is price."

A spokesperson for ISTI, a Chicago-based shredding company, sees a trend toward more national accounts. He says ISTI is starting to get many inquiries about national account procedures.

With national clients more interested in developing a national approach to document destruction, many shredding companies are interested in offering additional services to corporate clients.

Providing records storage opportunities is one such ancillary service that some companies are providing for larger (as well as small) customers. Many companies already offer recycling services to their clients, which boosts their revenue.

Additionally, many document shredding companies say they get requestsfrom some customers to destroy non-fibrous material, including obsolete products, electronics (including hard drives), clothing and textiles and microfiche.

The ability to provide a cross-section of services, all at a reasonable price, allows the shredding company, whether large or small, to become a one-stop shop for corporate customers looking for competitive pricing from a reduced pool of key suppliers. n

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