Maintaining Focus

There is no shortage of information destruction companies operating in Southern California. With intense competition for customers, firms can fall victim to commoditization, which can erode revenues and a company’s profitability. Amid all this competition, how can a company get noticed and how can it attract and keep customers while remaining profitable?

Weijland founded Paper Scrap Specialists in 1985. The company purchased scrap computer paper and tab cards for recycling. "The business operated on a premise that we would ‘weigh and pay’ the paper we purchased from our customers," he says. "The weigh and pay procedures involved carrying a scale on our truck and weighing all of the material we purchased from the customer at the time of taking delivery of this material. Once the weighing of the different commodities was completed, we would create a certified weight and pay the customer for the material," Weijland explains.

In 1999, the company underwent a name change, becoming Paper Recycling & Shredding Specialists, to correspond with a change in focus that resulted as a response to customer requests for off-site document destruction services. Paper Recycling & Shredding Specialists added a shredding truck in 2002 to satisfy customer requests for "witnessed shredding," Weijland says.

"Once we made the commitment to purchase our first on-site vehicle, we knew that this would be the area where we really wanted to focus our attention and resources," Weijland says. "We had provided off-site shredding for many years, but we quickly realized the future was a procedure that would allow individuals to personally witness the destruction of their sensitive documents."

In 2004 the company sold its recycling division to focus exclusively on document destruction.

Today, Paper Recycling & Shredding Specialists operates 11 shred trucks manufactured by Shred-Tech, Cambridge, Ontario, Canada, in addition to four collection vehicles. The company shreds more than 1,000 tons of paper per month, which is baled by one of two balers from Bellevue, Ohio-based American Baler prior to being shipped primarily to overseas consumers. Paper Recycling & Shredding Specialists also recently added a new plant-based shredding system supplied by Vecoplan LLC, High Point, N.C., which it uses for occasional electronic media and product destruction jobs as well as for off-site document destruction jobs.

Paper Recycling & Shredding Specialists’ 26 employees include a management staff that consists of Weijland’s sons Raymond, Richard and Don Jr., who each serve as vice presidents of the operation, along with Weijland’s wife Janice.

While the family juggles a variety of responsibilities during a typical day, generally Weijland focuses on sales, Raymond concentrates on daily plant operations and shredded paper sales, Richard focuses on daily vehicle dispatches and Don Jr. concentrates on account receivables and payables. Weijland and his sons have all cross trained on the various management activities to remain a nimble and responsive organization.

As with many small, family-owned businesses, Weijland says managers at Paper Recycling & Shredding Specialists wear a variety of hats beyond their specific job functions.

"I oversee what they do and spend time with contracts and sales and keeping the business moving in the direction I want it to," Weijland says of his role.

Weijland’s sons have had a long association with the company. In their school days, the boys would spend their summers and Saturdays washing the company’s vehicles or helping to decollate documents in the days of the recycling business. After graduating from high school, each joined the business full time. "There’s something about recycling that seems to become a part of you," he says of his sons’ transition to management roles with the company. "We thoroughly enjoyed the recycling side and now the shredding side."

Weijland says the hands-on approach his company offers as a local, independent document destruction firm makes a difference with customers. "We treat every customer as if they are our only customer," he says. "We feel being locally owned allows us to be flexible and extremely responsive to the needs of any new or existing client."

Sometimes this flexibility means providing product and electronic media destruction to clients who request these services. "Although we provide a limited amount of product destruction to some of our customers, we have made the decision to keep our focus on shredding paper with a daily goal of providing great service to our customers and being immediately responsive to the needs of these customers," Weijland says.

The company’s responsiveness comes in a variety of forms, from providing immediate price quotes to prospective clients over the phone to dispatching a truck for an unscheduled pickup.

"Our business philosophy is simple: Make every attempt to provide all of our customers with great service at a very competitive price," he says. Most importantly, all of these efforts must be accompanied by honesty and integrity."

In an area where competition and pricing pressure can be described as intense, Paper Recycling & Shredding Specialists’ policy is not to lose customers to a price, Weijland says. "We don’t match pricing, we beat pricing. The minute you start letting a competitor take your accounts over pricing, you are throwing in the towel."

However, before beating a competitor’s quote, the company first encourages its clients to get additional quotes to weed out what Weijland refers to as "fictitious pricing." He says, "If a customer is getting really good service at a fair price and a competitor calls our customer, they are only going to get their attention with fictitious pricing. They understand that if it sounds too good to be true, it probably is." Weijland says his customers generally see the tactic for what it is: a way to get a company’s business initially that will be followed by gradual price increases.

Paper Recycling & Shredding Specialists seeks to be competitive with its pricing from the beginning, Weijland says. "We don’t lose many customers to [pricing]." He adds that in many cases his customers don’t ask him to beat competitors’ quotes because they feel they are getting a fair price and responsive service.

With pricing for recovered paper plunging lately, a fair price for services rendered becomes even more critical for destruction firms, as revenue from paper sales has eroded significantly since October.

Weijland’s experience in the recycling industry has helped to prepare him for the drop in recovered fiber markets. However, even he was surprised by the speed of the slide. Generally, Weijland says, paper prices dip in March, but this drop in the fourth quarter was unexpected and swift. Typically, he says, markets will decline in $30 increments, giving dealers time to adjust. But in October, prices fell immediately by $100, and buyers became difficult to find, he says, adding that he’s even heard of one company charging to take old corrugated containers (OCC), which was previously unheard of.

He says many destruction firms make the mistake of thinking in local terms about paper markets, when the market is actually global in nature. And when China drops out of the market for a number of reasons, it has an immediate effect on pricing and demand for recovered fiber.

While Weijland says he feels a market correction was necessary, he thinks it’s a matter of time before the situation improves, saying January will bring with it a better sense for where the market will settle.

In the meantime, he says he expects a number of companies will have to adjust the pricing of their destruction services to make ends meet. "I don’t think many companies will have to shut their doors, but they will have to adjust their price upward," he says. Weijland predicts that more customers will be shopping around as a result, resistant to pay higher prices, especially in light of the current condition of the economy. "If people are going to survive in this business, I don’t know that we will have any choice but to raise our revenues by increasing our prices," Weijland says. "We are trying not to overreact and giving it time to settle," he says of Paper Recycling & Shredding Specialists. "How bad the market is and how long it is going to be this way is too early to tell."

In the meantime, Paper Recycling & Shredding Specialists will count on its responsiveness and agility to carry it through the potentially rough road ahead. n