The Price is Right

When pitching their services to prospective customers, some shredding companies may tout their price, others may note their reliability, while still others may stress the security aspect of the services that they provide.

However, some customers, those generators of the documents and information that need to be securely destroyed, may have a number of other metrics they use to appraise an operation.

Price may be the ultimate deciding factor for many customers. However, more companies and organizations seeking secure shredding services are weighing factors other than price when deciding which vendor they will use to properly handle the storage and destruction of their documents.

In the not-so-distant past, the perception was that all shredders were the same. However, a confluence of some high-profile identity-theft cases, increased pressure by legislators and a litigious business environment is inviting greater scrutiny of the vendors providing this service. Subsequently, companies are beginning to look beyond price to security, service arrangements and mobile vs. plant-based options when selecting a secure destruction company to contract with for service.

Judd Rousseau, COO of Identity Theft 911, a Scottsdale, Ariz., company that works with institutions and individuals to combat ID theft, says that more of his company’s clients are looking past the general differentiators to find out more regarding the information security issues that affect their businesses. Being cognizant of the various legislative requirements is one way to ensure compliance. However, a growing number of companies are becoming more attuned to the nuances of shredding as well.

Rousseau says that screening and background checks are two crucial measures that companies can perform before working with any shredding firm.

Some customers may perform a background check on the secure shredding firm. This may range from something as simple as a statewide background check to drug testing of the employees to an FBI background check on the company. In some cases, companies also request a background check that would spot civil cases against the shredding firm.

A number of companies also have adjusted their contracts to include a statement specifying that the secure shredding vendor needs to be NAID (National Association for Information Destruction) AAA certified.

While the NAID initials may not be as well known as ISO, more people are becoming aware of the validation that its certification can bring and are including that specification in contracts that they are putting out for bid.

Jason Radtke with Royal Document Destruction, a Columbus, Ohio-based document shredding firm, says that his company likes to mention that it is NAID certified because it indicates that the company abides by certain standards.

Radtke adds that while price still is an issue with customers, a growing number of customers are concerned about establishing a well-defined "chain of custody" for the documents to be destroyed.

A representative from a credit union says that while his firm doesn’t have any set-in-stone policy on working with vendors, he suggests that, before signing a contract with a shredding firm, companies investigate the financial condition of the shredding company, as well as its reputation and what type of insurance and bonding the company has.

With a low barrier to entry for newcomers to the shredding industry, it becomes a challenge for many established firms to compete head to head with these start-up firms. Some companies that have been in the business for a number of years say that because of the minimal cost to enter the market, a new shredding company can underbid more established firms to land a job.

On the other side, large operations with national coverage, often offering a much wider range of services, can bid on a contract or a job at a level that again is difficult for local or regional companies to compete with.

With this pricing disparity in mind, some of the more successful shredding companies set themselves apart based on other issues that are less tangible than pricing comparisons.

Jerry Martin, president of The Shredders, a shredding firm based in Los Angeles, says that his company’s single-minded approach to shredding gives it a major advantage when working with accounts. Martin strives to continually improve The Shredders’ customer service, which he finds to be a major selling point.

As an example, he says that a larger firm may service a customer on the required day in light of a corporate policy, but may not be able to respond as quickly to calls for an unscheduled pickup. However, a regional or smaller shredding firm can respond more quickly to such extemporaneous needs, which can cement a relationship. He says customer service is a significant advantage that his company enjoys. "We never miss a pickup. When we say we will be there, we will be there."

While price is a key point, not everyone buys a service based solely on price as the determining factor. Martha Hoff with The Ohio State University’s Facilities, Operations and Development department says that companies seeking to work with the university have to be NAID certified.

While customers may not always know what NAID certification actually entails, more encouraging is that an increasing number of customers possess knowledge about the organization and there is the recognition that some type of certification is needed.

The growth in the number of mobile shredding firms is creating a "Wild West" scenario, with small mobile shredding companies popping up all over the country that may put price above security.

Martin says that when his company, a plant-based shredding operation, first started, roughly six shredding firms were operating in the Southern California area. He estimates that more than 60 companies now are operating shredding services in the area.

More companies are adopting the NAID-certified method of having a statewide background check conducted on employees. However, some shredding companies are seeking to further emphasize the security aspect of their operations by providing more detailed background checks, including FBI background checks, on their employees.

While security and price are on the top of the list, there are factors that may sway a company toward one shredder and away from another. Large corporations with multiple locations in different cities may look for a best price scenario, while smaller customers and more localized firms may opt to have a company that is more likely to provide better customer service. Several shredding companies note that customers often prefer the flexibility that a smaller, regional shredding company can provide them. While a national company may have a well-established schedule that may limit its ability to effectively service an account, smaller companies can be more thorough.

Eric Flegenheimer, president of SecurShred, based in South Berlington, Vt., says he notices that customers are becoming much more educated about the shredding business. "Anytime I can talk security with the customer I can differentiate between our service and others."

One area that a growing number of customers are talking about is the size of the shred. The stories that make the mainstream press about improperly shredded material and incorrect handling procedures are giving more customers cause to take a closer look at this link in the chain of command for their documents.

Rousseau says that companies are taking a greater interest in whether shredding firms abide by best practices when it comes to bidding a job. "Companies are now asking about the best practices. How long has the shredder been in business, are they bonded, do they have insurance, more information on how the material is destroyed, whether the company is on site or off site," he lists as factors.

Rousseau also says that the customer should look at obtaining audits of the shredding procedure. Many shredding firms do provide some form of documentation that the material collected was properly destroyed.

Going forward, the specter of pricing will continue to be important, but more companies are realizing that additional services; a secure, qualified operation; and excellent customer service will offer the peace of mind that many companies are seeking from their information destruction programs.