As we turn the page on another year, it is fair to say the secured data destruction industry in North America enjoys a degree of customer awareness and an abundance of capacity (i.e., competition). That’s another way of saying the industry has matured. It also means that commoditization, and the associated pricing pressure, have become challenges.
That being said, increasing compliance requirements do promise a solution to this malaise. The biggest challenge seems to be the reluctance of service providers to embrace a new role as compliance partners. Still longing for the days when inbound inquiries provided all the leads they could handle, many remain unconvinced or otherwise unwilling to morph into compliance experts. While it often does seem a futile struggle to get customers to understand the value of compliance, many members are having remarkable success with such an approach. Not adopting a compliance approach condemns a service provider to life as a “shred-a-like,” indistinguishable from the service provider next door.
NAID is doubling down on the compliance strategy. By the time this column is published, NAID AAA Certification will have been modified to fulfill the risk assessment requirements of HIPAA/HITECH (Health Insurance Portability and Accountability Act/Health Information Technology for Economic and Clinical Health). The most challenging aspect from NAID’s perspective is not making these minor adjustments; it’s preparing members to explain it to customers. While a brochure will be available to that end, it will be more effective if member companies’ representatives understand it thoroughly.
Professional indemnification also is an emerging issue NAID continues to invest in. While Downstream Data Coverage is a success, the gamble is that the short-term benefit of participation leading to its current success, most notably marketplace differentiation, will propel it to the long-term payoffs of reduced premiums and improved policy language.
The ability to discuss compliance and indemnification issues intelligently with prospects is a successful strategy in today’s commoditized climate. NAID’s betting on the members who take advantage of that opportunity.
Bob Johnson is CEO of the National Association for Information Destruction. He can be reached at rjohnson@naidonline.org.