SOI 2020: The Benefits of Diversification
By providing extra services, particularly digital ones, distributors have been better able to hold their ground.
By Eloisa Gutierrez
This article originally appeared in Counselor Magazine
As the economy reopens in fits and starts, some companies are preparing to fill open positions by hunting for the right candidate among droves of hopeful job seekers. They could turn to a headhunter or staffing agency, or they could use a company they already know: their trusty promotional products distributor.
At Your Services: Distributors have pushed hard to diversify themselves in recent years with a wider array of services beyond promo.
Leaders in the promotional industry have long touted the importance of being a one-stop shop – a trend that has noticeably picked up in the last three years, according to Counselor SOI data, as distributors have increasingly offered a variety of additional services. That diversification strategy has proved especially crucial during the coronavirus pandemic. With buyer needs completely shifted, companies that expanded beyond promotional products had something more to offer clients. “The services side of the business has been able to make up for the losses that we’ve seen in the promotional side of it,” says John Henry III, founder and CEO of JH Specialty and Counselor’s 2019 Distributor Entrepreneur of the Year. “Our strategy where we go to market with multiple services has worked out well for us to weather this storm.”
Ultimately, marketing comes down to communication, and a distributor’s job is to help market its clients, be it through promotional products or other offerings, says Michael Fossano, vice president of account services at Premier Communications Group. The distributor offers a range of services that include graphic design, digital marketing, trade show promotions and public relations. “We’ve had to think on our feet a bit because that’s what our clients are relying on us for,” he says of the last few months.
The benefit of diversification during these unprecedented times, though, was that even though traditional promotional products sales took a major hit, one-stop shops could help make up for the loss through other ways – especially digital services.
Money Makers: Comparing the revenue streams of small and large distributors tells an illuminating story. While large distributors are much more likely to focus on promo, by comparison smaller companies are more invested in other services, such as printing.
Having a diversified strategy is key to staying nimble in a rapidly evolving business landscape. “We’ve been in constant contact with our customers,” says Elizabeth Tate, CEO of Memphis, TN-based Signet Inc., which offers warehousing, kitting and company stores, among other services. “We’ve had our ear to the ground; we’ve been pivoting with them.”
For many clients, pivoting meant moving business online by redesigning a website, refining marketing platforms, executing email campaigns or creating micro-websites specifically to update customers with whatever data is relevant to them. Some distributors have hosted virtual trade shows or merchandise meetings to showcase products, as they would have to prospective clients in person.
Others have provided promo kits that companies would’ve gifted to guests at events, award ceremonies or end-of-the-year parties. Distributors have also sold promotional employee gift kits, as companies try to maintain their own cultures. For example, Signet helped a client distribute NASCAR-themed “pit kits” in lieu of a corporate event at the racetrack. Consolidated Marketing Services (asi/154912) in Sommerville, MA, produced Disney-themed gift boxes for a client filled with treats obtained from a Disney park, substituting for a company trip to Disney World. Distributors may provide custom packaging for the gifts as well.
The coronavirus has even spurred some distributors to take on the role of sounding board, lending a sympathetic ear and welcome distraction during difficult times. It’s all about being a positive influence, whether by making a client laugh on the phone, generating revenue through e-commerce or getting a promo order for a graduation party, Henry says. “Our tagline is ‘A Partner You Can Rely On,’” he adds. “Our whole goal is to find customers that have a pain point or problem and help them overcome that and be that partner.”
Diversify Into Custom Kitting
As businesses continue hosting virtual events, distributors can provide clients with customized gift boxes for clients, prospects and employees alike. Get inspired with custom branded kits
Get inspired with these four ideas:
1. Vacation Pack: Coastal companies can send employees a branded vacation pack. The kit may include logoed sunglasses, a cap or brimmed hat, water bottle, aloe vera, lip balm—even a beach towel.
2. S’mores Galore: For a sweet treat and touch of nostalgia, send a camper s’mores kit with chocolate, marshmallows and graham crackers. A branded marshmallow roasting stick would be a perfect addition.
3. A Latte to Be Grateful for: A winning incentive for a star employee might be a customizable coffee machine. Varying in luxury and price, you may even opt for a portable espresso machine. A branded tumbler is a must to top off the gift.
4. Cooking ‘a la COVID: Most everyone has found themselves cooking, whether they like to or not. To make nights in more fun, a company could send employees some essentials for making their own pizza, including a branded pizza stone and cutter.