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May/June 2009
Welcome to the latest issue of Nutraceutical
News from IFS. As economic challenges continue and
consumer spending
remains stagnant, we are taking a look at some strategies that can help
your business maintain stability for the short-term and keep you ahead
of your competition in good times as well as bad.
The Industry
Update provides an overview of a recent study by the FDA
regarding the oversight of dietary supplements. The Marketing Column
reinforces that in a down economy, consumers are looking for value in
the products they purchase. In the Customer
Service Corner, we discuss how in today’s age of
electronic communications, failing to deal with customer complaints in
a timely, effective manner can cause extensive damage to your company’s
reputation. This issue’s Fulfillment
Tip offers advice on how outsourcing some or all of your
fulfillment responsibilities can benefit your business.
For more information about the content found
here or about any of our products and services, you can always visit
our website, www.ifssolutions.com.
To share your feedback about this newsletter, please click here.
To unsubscribe, please use the link at the end of this issue.
IN THIS ISSUE:
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Industry Update
FDA Guidance on Dietary Supplements
fredrocko
In response, the Council for Responsible Nutrition (CRN) sees the
report card as an indication that the industry has come a long way
since the original 2000 GAO report on dietary supplements was released.
CRN President Steve Mister stated that the Council is gratified that
this latest report recognizes that dietary supplements are extensively
regulated by the FDA and pointed out that the report refers to several
of the regulatory improvements instituted – and fought for by
responsible industry members – including the issuance by the FDA of
good manufacturing practices (GMPs) specific to dietary supplements and
passage of a law mandating that serious adverse events are reported to
the FDA.
Mister added that he also welcomes guidance from the FDA on New Dietary
Ingredients (NDIs) and could potentially support registration of
products assuming the details are not inappropriately burdensome and
would not prevent beneficial products from being brought to market. He
warned, however, that regulations are only as strong as enforcement,
and it is time for the FDA to focus its energy and resources on
inspections and enforcement actions directed at the small minority of
companies that are giving those in the majority a black eye.
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Marketing Column
Value Reigns in a Tough Economy
sjlocke
If you’re concerned that current economic conditions may be pushing
consumers toward lower prices as the main indicator of product loyalty,
a survey recently conducted by BrandKeys, a consulting firm that
maintains a Customer Loyalty Engagement Index, suggests that consumers
are looking for much more than cost when deciding on where to spend
their dollars.
According to survey results, brand value means much more than brand
pricing as consumers look for products that will give them good all
around value – as opposed to just lower prices or steep discounts. In
fact, consumer expectations regarding brand value increased 20 percent
over last year’s survey. This was the ninth year of the survey that
includes responses from more than 60,000 consumers.
Some examples of category winners: Allstate Insurance, which positions
itself as the trusted rather than the cheapest; Sam Adams, the most
expensive beer included in the survey, beat Budweiser, the cheapest and
W Hotels exceeded brands that offer lodging for 50 percent less –
signaling that prices have been neutralized by expectations of value,
trust and brand differentiation.
And while companies that have built their brand on value pricing should
continue that approach – McDonald’s still won the fast food category –
higher-end brands should focus on building trust and value and leave
the freebies to other brands.
What does this mean for your brand? If consumers perceive your brand to
be a good value, does the product do what you say it will? Does it meet
their need? Do you provide consistent, dependable service? Are orders
delivered quickly and correctly? Are you willing and able to solve
problems quickly and professionally? Do you respond quickly to customer
complaints and questions? Are you paying attention to your customers’
feedback and providing new products and solutions to meet their needs?
If you can answer “yes” to these questions, you shouldn’t have to
succumb to offering deep discounts to be perceived as having the real
value that consumers want and seek, especially in difficult economic
times.
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Customer Service Corner
The Upside of Customer Complaints
Let’s face it, no one wants to deal with a customer who is
calling or e-mailing to complain about some aspect of your product or service.
But did you ever consider that a customer who takes the time to let you
know that something about your business isn’t satisfactory could actually be
doing you a huge favor?
In today’s world of instant gratification
and fast-speed
communication, anyone who is Web savvy can do tremendous harm to a
business by simply passing along his or her negative sentiments over the Internet
to friends, family members, acquaintances, co-workers and people they may have
never met simply by mentioning their problem on a “blog.”
If you’re not
familiar with the term blog, according
to Wikipedia, a blog – which is derived from the
term Web log –
is a type of Web site,
usually maintained by an individual with regular entries of commentary,
descriptions of events, or other material such as graphics or video.
YanC
Many blogs provide commentary or news on a particular
subject; others function more as personal online
diaries – and for many bloggers this includes
posting their frustrations when they believe they have received poor service from a
business or have purchased an item that does not meet their expectations.
Just how big is the “blogosphere” – the collective community of all blogs? According to
Technorati, an Internet search engine for searching blogs,
as of June 2008, there were 112.8 million blogs and more than 250
million pieces of tagged social media.
What does this mean for customer service in the age of online communications?
Complaints posted online can affect shopping and buying decisions, based on the experience of as few as one
disgruntled customer. And as this network has grown, it has gotten the
attention of some major global brands.
Companies like Comcast,
Southwest Airlines and others have started monitoring public comments
on blogs, message
boards and social networks for any negative mention of their names.
They realize
how quickly these messages are traveling around social media sites and
understand how damaging the complaints can be to their business. When
they encounter a complaint they contact the source to try to solve the
problem.
And while not every company has the
resources for a blog monitor, it is important to realize that their
customers
are talking…and not just in the retail store. The exposure of a
customer
service problem is far more reaching in today’s technology age. So make
sure
that when a customer calls with a complaint, your customer service
representatives do what it takes to solve the problem quickly to keep
your customer
happy. As a result, when this particular customer is blogging, tweeting
or
simply emailing a friend, the only words used to describe your company
will be
that…You took great care to provide excellent service.
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Fulfillment Tip
In-house vs. Outsourced...Which is Best for Your Business?
motoed
If handling many aspects of fulfillment internally is taking away the
time you should spend on the day-to-day management of your business,
product sales and marketing, and business development, perhaps you
should consider outsourcing some or all of your fulfillment
responsibilities.
Consider how your time could be spent if you weren’t involved in the
following tasks:
Order Processing
Credit Card Processing and Calling on Bad Numbers
Pick, Pack and Shipping
Inventory Replenishment
Customer Service Issues
Warehouse Management
Packaging Material Sourcing
Managing Workers Compensation Issues
Sourcing and Maintaining Material Handling Equipment
And, ask yourself these questions:
- Do you really want to staff a Call Center? (What is the proper number of staff?)
- Do you have the capabilities to capture and manage your customer database?
- Are you prepared to monitor your Web site or e-mail every few hours?
- Are you equipped to react quickly to customer surveys regarding business/product improvement?
- Do you have seasonality issues to consider?
- Do you have the capabilities to package and ship properly?
- Do you have inventory management systems in place?
Weigh the benefits and the costs
Before you decide to outsource any portion of your business, you need
to weigh both the benefits and the costs of handling all your
operations and customer service internally, and then review those same
benefits and costs if you outsourced them to a professional fulfillment
firm. In today’s difficult economy, fixed costs can negatively impact
one’s business if your sales are declining and cash is at a premium.
Turning fixed costs into variable costs can save cash as you pay only
based on the number of orders you ship.
If you think outsourcing might be right for your business or want to
know more about the costs and benefits, check out the White Paper by
Keith Milburn, president of Innovative Fulfillment Solutions (IFS),
entitled Outsourcing Fulfillment: Putting Back-End Issues Out Front at www.IFSSolutions.com.
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IFS is a world class, full service fulfillment operation with a track record of success. A woman-owned business, we proudly serve some of the country's most respected corporations. With a special expertise in the fulfillment of nutraceuticals, we can help you run your nutraceuticals business more efficiently and more cost effectively.
Innovative Fulfillment Solutions
4346 Belgium Blvd
Kansas City, MO 64150
www.ifssolutions.com
Toll Free: 1-888-275-3000
Local: 816-587-5880
Fax: 816-587-5881
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