Promo Marketing’s Annual Top 50 Distributors List is very much a representation of a current pervasive cultural theme: change. Whether the many changes of ’08 are good or bad overall is a matter of perspective, but certainly it’s safe to say this year was more eventful than most.
Within our industry, we saw the formation of the PhRMA and CPSIA regulations, and products made with BPA pushed nearly to obsolescence by public opinion. Organics and green products continued their boom, and USA-made items gained ground from the political and financial climate.
The industry was also impacted by global happenings. The crippling gas costs last year were difficult enough, but once they fell back to normal, the housing, banking and auto industries began their collapse. Tougher times seemed to bring more mergers and acquisitions than in prior years, some of which, like Staples Promotional Products’ buying Corporate Express Promotional Marketing, are sure to alter the industry’s playing field. The recession, however, was not the financial Armageddon some were predicting. Five months into ’09, signs of recovery are already apparent, like the stock market crawling back to life or slightly shrinking unemployment numbers.
The economy being the dominant topic in most industry conversations these days, Promo Marketing asked the top ten distributor companies their thoughts on the recession, both in terms of weathering losses and making gains. Their answers provide encouragement and insight into the future of our industry, and act as remind us of its continued significance and vitality.
1. Proforma
Cleveland, OH
www.proforma.com
Principals: Greg and Vera Muzzillo,co-CEOs
PM: What has been your company’s strategy for coping with the recession?
G&VM: [Proforma] owners have the ability to serve their clients with the printing items that they use on a daily basis such as business documents, catalogs, direct-mail pieces, etc., which give them the ability to thrive even during a challenging economy. For every dollar spent on promotional products, nine dollars are spent on print, which makes the printing segment practically recession-proof. In addition, our owners operate as a full-service agency providing clients with innovative ideas and total project management. This allows us to compensate for staffing shortages resulting from any employee reductions that our clients
have made.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
GM: One of my best memories of the early days occurred about 25 years ago when I was training one of our first sales professionals on cold calling. We were calling on a law firm called Endress and Endress. After we walked in the door, we both had the same idea at the same time. He and I began taking off our jackets and ties. We simply explained to the shocked receptionist that we were “endressing and endressing!” Unfortunately, she did not find the humor in our approach. She called security and had us kicked out of the building. When I think back to that day, I am reminded that every once and a while you need to take a minute to let loose!
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
G&VM: We have found growth in thriving industries including education, securities, fitness, accounting and health care. These industries are less affected by the economy and our owners continue to create and implement complete marketing programs for their respective clients in these market segments. In the weaker economy, we have found that our ability to provide customers with the products they need to conduct business on a daily basis, as well as creative solutions that are at the top of our industry, has contributed to our success.
2. BDA (Bensussen Deutsch & Associates)
Woodinville, WA
www.bdainc.com
Principal: Jay Deutsch, CEO
PM: What has been your company’s strategy for coping with the recession?
JD: The economic climate is a concern for any company; however, we are cautiously optimistic. We are using this time to invest in our current clients and existing relationships, while also looking for new opportunities that enable us to leverage the recession to our advantage.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
JD: Eric Bensussen (BDA’s president) and I grew up two houses away from each other in Seattle. In 1984, we were just teenagers with a passion for sports and merchandise, so we decided to start a sports marketing company called Sports Marketing Corp. (now Bensussen Deutsch & Associates Inc.). I called the NFL and asked for permission to use the Seattle Seahawks logo on sweatshirts to sell in Alaska—they liked the idea. Three phone calls and one proposal later, we signed a deal with the NFL.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
JD: With the introduction of the revised PhRMA Code in January, the medical division of our business has seen growth as pharmaceutical companies ramp up on educational merchandise and incorporate these products into tools such as patient starter kits and direct-to-consumer marketing materials.
3. Integrated Merchandising System LLC (IMS)
Morton Grove, IL
www.imsfastpak.com
Principal: Rick Remick, CEO
PM: What has been your company’s strategy for coping with the recession?
RR: Our key strategy has been to actively listen to and embrace our clients’ challenges during this time, while being creatively opportunistic with the products, programs and marketing we put in place to address their needs. End-user relevance remains our focus, and listening is a critical part of delivering the right programs today. In particular, we have been even more aggressive in providing clients with ideas designed to save them time and money.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
RR: Product price point is certainly top of mind with client partners, driving an increase in promotional/giveaway items at the expense of higher ticket categories. A particularly relevant solution we have been providing is in the area of kitted programs. By assembling important, common items into one kit that addresses end-user needs, we have been able to save partners both time and money. Again, product/program relevance remains critical—solutions the client has confidence in that will delight the end-user and drive intended behavior and results.
4. National Pen
San Diego, CA
www.pens.com
Principal: Dave Thompson, president and CEO
PM: What has been your company’s strategy for coping with the recession?
DT: Our key strategies have been to increase our focus on helping our customers solve their challenges while also watching our expenses more closely than ever.
Our customers are doing the same thing—therefore, we are providing customers a very powerful combination of the lowest prices in the industry and the smallest minimum order quantities. This enables customers to maximize the value of their promotional products and reduce their commitment per order. Customers have reduced their average order size but have increased the frequency of orders. This combination, along with free credit terms and the bulk of our products being made in America, is a terrific formula.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
DT: The best part of all is the people—the employees of National Pen have an incredible passion for the fact that we are one of the only vertically integrated pen companies in America with nearly 40 years of growth and success.
5. 4imprint Inc.
Oshkosh, WI
www.4imprint.com
Principal: Kevin Lyons-Tarr, president
PM: What has been your company’s strategy for coping with the recession?
KLT: Our core value proposition is about saving our customers time and money without sacrificing service—which is even more important in a downturn. … Internally, we’ve always been about being ultra-efficient and low-cost, but you can always find places to improve and save without compromising who you are. We’re saving every place we can but not at the expense of our future and not in a way that will keep us from participating fully when things begin to turn around.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
KLT: It’s long enough ago where I’m having a hard time remembering! Honestly, my daughter was born about a month after I started in the industry so I always think of her when I think about getting started. She’s off to college this year. Time flies.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
KLT: We haven’t seen a huge shift in terms of product categories, people are looking for value and items that are useful. In a way, more of a return to the basics.
6. Cintas Corporation
Mason, OH
www.cintas.com/promotionalproducts
Principal: Dan Barr, vice president, Cintas Promotional Products
PM: What has been your company’s strategy for coping with the recession?
DB: There are five key elements to our strategy for overcoming the challenging market conditions: Get closer to our customers so we can focus on what is most important to them now; creatively collaborate with our suppliers to find exciting new products at lower price points; make sure we have fun and project a positive outlook; aggressively explore new business opportunities; [and] look for new ways to stretch limited budgets further.
PM: What is one of your best memories of starting out in the industry, either as an early success or something more personal?
DB: One of the funniest experiences in my professional career came on my first day in the promotional products industry. I was at the ASI Power Summit and while hobnobbing with the industry’s movers and shakers at the opening cocktail reception, someone asked me the question, “Are you a supplier or a distributor?” I looked at my watch and responded, “I’ve only been in the industry for 15 minutes. Can you ask me an easier question?”
PM: What are some products or markets that you have found to be particularly strong in this market?
DB: Lower price-point items are obviously more popular then ever, especially ones that are perceived as more practical. This includes totes/bags, writing instruments and drinkware. High-performance wearables and eco-friendly [products] are also solid.
7. HALO/Lee Wayne
Sterling, IL
www.halo.com
Principal: Marc Simon, CEO
PM: What has been your company’s strategy for coping with the recession?
MS: Our view is the recession is an opportunity for our account executives and our company to gain market share. We have had several experienced industry professionals seek the protection of our balance sheet and liquidity. … Our sales management group is very focused on helping our top producers increase the number of clients they serve, as well as using our marketing and technology tools to get more sales out of existing clients.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
MS: I joined the industry during a very turbulent time for our company eight years ago. I greatly appreciated the openness and willingness of both suppliers and friendly competitors at that time to offer their input and assistance. Our industry is extremely unique in the spirit of cooperation we share.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
MS: A strong market seems to be defined by the account executive that sells it. We’re outperforming the industry, frankly, because we have strong account executives equipped with great tools and a compensation package that rewards them for achieving sales in a tough market.
8. Geiger
Lewiston, ME
www.geiger.com
Principal: Gene Geiger, president/CEO
PM: What has been your company’s strategy for coping with the recession?
GG: On the sales side, we are doing everything we can to get as close as we can to every customer—holding on to what we have and working to grow our “share of wallet.” Beyond that, we have refocused our marketing efforts to help our sales partners prospect and close new accounts.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
GG: My best memory, although a very recent one, was standing on the stage at last January’s PPAI Expo introducing my colleague and dear friend, Jo-an Lantz, as the newest and youngest inductee into PPAI’s Hall of Fame. Then, I stood back and watched as she gave her acceptance speech which was followed by a prolonged standing ovation. I’ll not soon forget that scene from my vantage point at the rear of the stage. I could not have been more happy or more proud.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
GG: In general, clients are looking for the best value. Higher-priced items are less popular and are often replaced with similar, less-expensive items. We’ve seen a decline in average order size. … Customers are spending on essentials and necessities, such as pens, and they are tending to avoid “ostentatious” products.
9. Adventures in Advertising Corp. (AIA)
Neenah, WI
www.adventuresinadvertising.com
Principal: David Woods, president and CEO
PM: What has been your company’s strategy for coping with the recession?
DW: These are certainly the most challenging times I’ve ever seen! … We have tried to trim our operating costs wherever we can, and focused all our resources on building and maintaining sales.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
DW: I came into the industry in 1991 to head up a long-established distributor. The founder, an older gentleman of few words, called everyone together, and introduced me by saying, “This is David Woods, your new CEO. He doesn’t know anything about ad specialties, so you are going to have to teach him everything!” Fortunately, after 18 years, I am working with a great group of people who still teach me new things every day!
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
DW: Our industry seems to be relatively slow across the board, but some brighter spots include health care, some export companies, some government buyers, beverages and entertainment.
10. Summit Marketing
St. Louis, MO
www.summitmarketing.com
Principal: Dan Renz, CEO
PM: What has been your company’s strategy for coping with the recession?
DR: Our primary focus has been to be more aggressive in the market, staying close to current clients and helping them find creative, cost-effective ways to keep promoting. Further, we have had the good fortune to be involved in more new business pitches as businesses appear more and more open to listening to new ideas and approaches.
PM: What is one of your best memories of starting out in the industry, either an early success or something more personal?
DR: I began in the promotional products business back at Anheuser-Busch right at the time the Spuds McKenzie phenomenon exploded. It was definitely baptism by craziness. It was challenging but certainly made it very clear how the power of promotional products could ignite and extend a brand.
PM: What are some products or markets that you have found to be particularly strong in this weaker economy?
DR: No one category in particular is standing out. What does seem to be important is getting lower price points within every category yet maintaining quality for the clients’ brand and corporate image.
