The best part about writing the introduction for the state of the industry of the promotional products sector this year? Not having to expend any more ink writing about the recession.
After dominating the business press for what seems like forever, it appears that the story has finally reached its close. Many companies reported major profit gains in 2011, often at the scale of tens of millions. This is wonderful news for all, mostly because it means no more hand-wringing introductions about it being "darkest before dawn" or perseverance being critical to survive this "tough economic climate." It's done. Over. People have persevered through the problems. The dawn has brightened everything. Either the global recession is wrapping up or the promotional products industry has adapted to the world's financial challenge and found ways to not only survive, but also find more profit.
Of course, with one overwritten topic fading out, there are always plenty more new and exciting problems appearing to take its place. From global issues like cotton prices and Chinese manufacturing to challenges from within our own country and the industry itself, there is no shortage of upcoming problems to write about. If there's one thing this industry has proven however, either in surviving the great recession or the countless problems that came before it, it's that no challenge is insurmountable. Cotton prices will settle, the risk with overseas manufacturing will eventually be controlled and government restrictions will be worked around one way or the other.
Easier said than done? Maybe. But the promotional products industry is nothing if not a collection of deeply creative people, men and women, constantly thinking six steps ahead on the best ways to adapt and thrive in the ever-changing global business climate. If you're curious about what's on the minds of the industry's best and brightest, read on to see how the principals of top-earning distributor companies answered some heavy-hitting questions.
How do you expect the growing global economy to affect your company in the future?
"I don't know, and I don't care. To be honest with you, so many people worry about all these things they read in The Wall Street Journal, and I have a more simplistic view. Businesses spend about 18 billion dollars plus or minus on promotional products, and about 150 or 170 billion on printing. Right now Proforma does about 400 million dollars a year, so we don't have a very meaningful share of any of those markets, so I just say let's go grow market share. We're not large enough where any of those things will impact us significantly. The things that could impact [us] are just going out and getting market share because, no matter what, people are still buying print, people are still buying promotional products and many of them are looking for people to add value to those products—not just sell on the cheapest price."
– Greg Muzzillo, founder, Proforma
"Well, first, assumed within your question is that this will be a growing global economy, and I sure hope you're right. If it is correct, that if it's a growing global economy, we ought to see employment pick up as well. I view improvement in employment as very closely correlated with the growth in our industry. So assuming we have a growing economy and growing employment, we ought to see our industry continue to grow as well."
– Marc Simon, CEO, HALO Branded Solutions
"I believe new business in the future will be awarded globally. We believe as much as one-quarter of our 2011 revenue will come from international markets and expect that number to keep going up."
– Eric D. Belcher, president and CEO, InnerWorkings
"More transparency in global sourcing supply chain, and with it an expectation for more stringent compliance at all levels—factory compliance, labor compliance and continued emphasis on product safety. Our clients are asking for provenance of all types of products—Sunrise is committed to being an industry leader in product safety and compliance."
– Mitch Mounger, CEO, Sunrise Identity
"It's not just the 'growing' global economy—it's the 'ever-changing' global economy and it will continue to lead to:
• Price Compression—It's as easy to shop worldwide markets for promotional products now as it is to order a pair of boots from L.L. Bean.
• Sourcing Issues—As commodities run up in various world markets we will continue to experience challenges in consistent costs and reliable sources. You saw cotton jump in 2010, oil in early 2011 (which will affect nylon and plastic components). What will be next is hard to say, but rest assured it will be something.
• The China Syndrome—China is dramatically shifting its focus from low technology manufacturing to high tech. Apple alone employs over 800,000 people in China (400,000 in one plant). They have learned that it requires just as much labor to make a circuit board for Apple as it does to make a key tag. This has and will continue to put pressure on other markets for the production of promotional products. Africa, Bangladesh and numerous other developing market economies simply aren't ready yet to take the workload and deliver consistently and reliably."
– Jerry Mulligan, vice president sales/business development, Chamberlain Marketing Group
What's an ethical issue facing the industry, and what needs to be done to overcome it?
"Whether you're dealing with end-user customers, vendors, sales or employees, it all comes down to credibility and trust. Many people do not believe in 'what goes around comes around,' nor do they approach business with a 'win-win' attitude trying to do the right things for the right reasons. The challenge will always be in how we 'communicate' as an industry, companies and individuals sharing this information with one another. It's not a 'technology' answer. It's a 'people' answer. It's still a 'people' business. Sooner or later it comes down to relationships and who you can trust."
– Larry A. Zavadil, founder and CEO, American Solutions for Business
"A fairly significant issue that faces our industry is the impact products have on the environment. Research shows customers are willing to pay more if it can result in a positive impact [on] the environment. As an industry, we need to educate our customers on the choices available as many industry products can be produced in an environmentally friendly capacity."
– Tom, John and David Robertson, owners, Robertson Marketing Group
"Compliance, compliance, compliance—because ethically sourcing products from compliant factories is the right thing to do. If a distributor cannot identify the source, they ought to seriously consider a compliant option."
– Mitch Mounger, CEO, Sunrise Identity
"Integrity/compliance are the greatest issues facing our industry. There currently is no legitimate, well-vetted and documented worldwide Quality Assurance Standard. The recent scandal at Alibaba is just one example. It's rampant, and as long as U.S. clients insist on the cheapest price we will continue to turn a blind eye to developing a uniform world standard for quality and social compliance. If we won't/don't self govern our own industry and establish an ISO (International Standards Organization) like standard, we will continue to run the risk of jeopardizing the long-term viability of our entire industry."
– Jerry Mulligan, vice president sales/business development, Chamberlain Marketing Group
What's the best decision you ever made to advance your company, and why?
"The creation of the Kaeser & Blair Century Club in 1994 on the 100th anniversary of the company's founding (K&B was spun-off in 1894 from a company founded in 1853). The Century Club is a separate service system for our highest producing dealers with dedicated internal personnel, much higher than normal profit splits, substantial bonuses and sales tools that support the efforts of full-time or high volume part-time dealers."
– Gregg A. Emmer, vice president and chief marketing officer, Kaeser & Blair Inc.
"Focusing on being a 'boutique agency' and having quality people working with you (even though it has meant scaling back) as well as being creative and constantly practicing what we preach—via self-promos and direct mail/incentive campaigns."
– Kris Robinson, chief sustainability officer and executive vice president, PromoShop Inc./ecopromos.com
Who is a hero or role model of yours?
"Richard Branson, because he is a nontraditionalist and willing to take risk based on his passion, while not giving a sh^t what people think about him."
– Jason Black, CEO, Boundless Network
"Herman Newman was my professor at the University of Cincinnati for communications, speech practicum and semantics. He lectured that all communications are outcome based and that the outcome desired must be known or the communications will fail. This concept, along with much additional insight and wisdom shared by Mr. Newman with his students, has been instrumental in my professional success."
– Gregg A. Emmer, vice president and chief marketing officer, Kaeser & Blair Inc.
"Really too many people to list. If you're looking, you meet people every day who are heroes, or give you something to aspire to, so I do my best to make sure I'm always looking!"
– Kevin Lyons-Tarr, president, 4imprint.com