Everything to Everyone
An $8 billion integrated global healthcare enterprise was ailing from multiple problems. The company's complex supply chain, multiple business units and intricate marketing programs presented its management team with visibility, coordination, economies of scale and execution challenges. Dayton, Ohio-based WorkflowOne had the cure.
The distributorship immediately began to cull best practices from its rich history with major verticals. Deep marketing, supply chain and sourcing experience combined with supporting tools enabled WorkflowOne to develop a comprehensive program around promotional products. Key components of this program included:
• An online store for the company's employees to shop and brainstorm ideas for future events and programs.
• A promotional merchandising team to develop creative solutions that met end-user needs.
• A sourcing service consisting of vendor management and organization compliance controls.
• A system to maintain the company's brand standards and manage end-user requests.
Having a goal-oriented implementation process has served the global healthcare provider in many ways. The company has improved brand compliance and control, led to reliable delivery and reduced inventory obsolescence, increased customer satisfaction through enhanced merchandise selection and more.
Distributors have the luxury of being flexible—their success isn't measured by a single technology or product line. But the decision to identify and penetrate a vertical market (e.g., medical, retail, insurance, automotive, insurance, government, financial, hospitality, etc.) isn't easy. Some may call it a gamble that requires careful consideration and lucky timing. This lends itself to the question: Is it better to be a general full-service provider or a full-service provider to a single niche? The answer isn't quite simple.
Jeff Grippando, vice president of branded merchandise strategic business unit, WorkflowOne, encouraged undecided companies to conduct research, seek education and consult with someone who has worked in or at least sold to the vertical market of interest. According to Grippando, the sales process, purchasing dynamics, products and services can be varied and unique for a particular vertical market—something to think about, even more so with branded merchandise.
"Decisions on limiting yourself on a few vertical markets to pursue versus broadening your sales efforts across multiple markets, is pretty much like making a financial investment. If the timing is right and you're one of the first ones in, the investment could really pay off," he said. "However, if the markets you focus on are regulated or easily influenced by outside sources, your losses could be significant as well."
Grippando continued, "Conversely, broadening your focus across multiple markets would be like 'hedging your bet' and while the investment might not pay off as big and in a short amount of time, it might be a safer investment in the long run."
Lori Bauer, vice president, field sales, Norwood & BIC Graphic North America, Clearwater, Fla., also acknowledged the risks associated with identifying a targeted market (or markets). "There are many distributors who do focus on one or a few vertical markets. There are risks; however, being able to offer a depth of experience helps set you apart from the rest," she commented.
Bauer pointed to other factors that influence the decision-making process—for example, the size of the market the distributor is serving, or the presence of a particular industry nearby.
"It also depends on the distributor's interest or level of experience in a particular market that could lend them additional credibility," Bauer added.
Grippando agreed, noting if promotional products providers prove themselves to be knowledgeable and reliable, they can become a well-respected, go-to resource for a certain market. However, failure to demonstrate expertise could quickly drive their business to the ground, he said.
In addition to understanding the challenges your clients face and their clients' needs, companies must work within industry-specific regulations.
"You can't walk into a bank, credit union or investment firm not having an understanding of changing dynamics facing this industry over the last five years or how government compliance affects almost all aspects of how these institutions communicate with their customers, even with branded merchandise," Grippando stressed. "If you can't demonstrate specific vertical market expertise, within minutes of your first sales call and on an ongoing basis, you simply won't be considered."
Greg Fess, marketing manager of Ward/Kraft, Fort Scott, Kan., has observed a different trend. He sees distributors reaching across many different market segments and believes there are several advantages to this approach.
"This allows them to offer a wide range of products in different industries. We have found that many of our products reach into different markets as well. So if you sell spin wheels, you are probably selling them in multiple markets," Fess remarked. "The same goes for almost every product we manufacture. We believe this only adds value for our distributors in the marketplace. If we can assist you in selling in 10 or 12 different markets, and have provided you with the tools to sell a wide variety of products, your toolbox has expanded and you can reach not only a wider audience, but can offer your existing clients more products with ease."
Fess went on to say, "We have distributors becoming educated on a wider variety of products and [there is] more crossover between print and promotional along with their expansion into new markets. … The industry is continuing to change and our distributors are changing with it. It allows growth in the printing industry and it's great to see the growth in the markets our distributors are working in."
While some distributors sell to a diverse group of clients, others are leveraging their newfound expertise in industries that have rebounded from the recession. Bauer mentioned an improvement in the non-profit sector, where many organizations are seeing an increase in donations as the economy recovers.
"Travel and tourism industries seem to also be spending more as consumer confidence returns," Bauer stated.
Nevertheless, the medical market is king. "We are seeing growth in healthcare-related entities—hospitals, pharmaceuticals, other providers such as home health and assisted living facilities," Bauer noted. "As wellness becomes an increasing concern for corporate America in order to keep insurance costs down, we are seeing a growing demand for products that encourage healthy habits."
Fess concurred. "Healthcare is a big one. We offer a very wide range of products from Laserband (a laser sheet with wristband and chart labels) to Chain-of-Custody forms for laboratories," he said. "We also offer a great range of printed promotional/marketing pieces for healthcare like our Table Talker—a tabletop display used for listing extensions in hospital rooms or services provided by the hospital clinic."
Distributors must be aware of product safety and compliance, especially in the medical market (see sidebar). Ron Williams, director of marketing, Fey-Line & Reflectix, Edgerton, Minn., shared the following advice on entering this sector.
"Distributors should, in my opinion, concentrate on developing their own brand rather than product availability. In other words, become a true marketing value-add rather than a resource. If you're a resource, you're pegged as a commodity broker," he explained. "If you position yourself as an expert and provide solutions to questions they haven't even thought of yet, you become a specialist—and we all know that in the medical market, specialists earn the most for their time and expertise rather than family practitioners."
No matter what vertical—or verticals—you choose to infiltrate, it's important to step up your game. "Clients and prospects will look for providers to go beyond simply providing catalogs of 'swag' to choose from, but creative services, including copywriting, design and the ability to develop integrated marketing campaigns as well," Grippando said.
Still, for Grippando, it all comes down to being prepped. If you go into a new market ill-prepared, you not only risk your own reputation, but, by extension, you could tarnish the reputation of those who know the niche. "Don't compete solely on price, but on a blend of consultative value, creativity and resourcefulness," Grippando concluded.