Promotional Products — Broadening Portfolios

LOOK AROUND your desk and you can see them everywhere. In your drawer, in your pencil holder, adorning your calendar. Promotional products and advertising specialties have become such a large part of our lives, we barely notice them. You go to the bank and get a pen with its name on it, or maybe it’s a free tote from the library or a stress ball from your doctor’s favorite pharmaceutical company.

According to legend, medieval armor-makers gifted knights with wooden pegs to hang the armor. Needless to say, the armor-maker’s name and mark were hand-carved on each peg. Although the first known promotional products in the United States can be traced back to commemorative buttons when George Washington was elected president, its official “birth” wasn’t until the latter part of the 19th century, expanding from items such as advertising calendars, wooden specialties and the Farmers’ Almanac.

But the roots of promotional products are also grounded in the printing industry, when a small Ohio newspaper owner utilized his printing press between editions to print burlap schoolbook bags with simple advertising messages for a local merchant. It was later that this printer started his own promotional products company to sell specialty items. Driven by competition from another news paper printer, he was soon creating advertisements on anything that could receive printing, from aprons and calendars to buggy whips.

Promotional Know-how
There are few printers who have offered promotional products since the days of buggy whips, one of which is WorkflowOne. The Dayton, OH-based company’s roots in promotional products and advertising incentives go back to 1866.

“Out of our parent company’s overall revenue (Workflow Management), approximately one-sixth comes from promotional products,” notes John Nicely, vice president of marketing.

WorkflowOne offers more than 650,000 products, from wearables and drinkware, to computer products and food gifts. The company also designs custom products for its clients through its in-house design department.

“For example, we design custom ‘bobble head’ figures that are based on photographs of actual people,” explains Nicely. “We can provide pretty much any type of product.”

Additionally, the company was recently selected by the Rita’s Water Ice franchise to aid in its expansion. WorkflowOne will deploy a Web-based order management system for Rita’s, allowing any of the 350-plus franchises the ability to order promotional items, signage, point-of-purchase, uniforms, as well as menus, franchisee manuals and packaging products.

WorkflowOne has the capacity to ship orders directly from the manufacturer to a customer or to one of its own facilities. The product can then be warehoused or packaged according to client specifications. And because WorkflowOne does a large volume of promotional products, it benefits from deep pricing discounts, which can be passed on to the client.

“To succeed in this business, whether as a print provider, distributor or broker, you have to provide value and a solution rather than simply a custom manufactured product that can be purchased from the lowest bidder,” Nicely stresses.

A big plus for getting into the promotional products business is the potential to form a deeper relationship with clients, leading to increased sales.

“We might be asked to participate in an RFP for a company’s incentive and rewards program, including the development of a line of personalized promotional products that includes logistics and fulfillment,” adds the Workflow One executive. “Based on our customer’s satisfaction with that program, we’ll be asked to get involved in additional outsourced programs.”

According to the Advertising Specialty Institute (ASI), promotional product sales reached a record $17.8 billion in 2005.

Product Meld
Most printers don’t actually manufacture or print the promotional products they offer. They are more of a go-between for what their clients want, using a distributor or broker. Smaller printers prefer to utilize product search services such as pmdm.com to purchase from multiple suppliers, which can lower costs.

It’s not just the large graphic arts companies that are reaping the rewards of jumping into this arena. Many small- and mid-sized commercial printers are looking at advertising specialties as a new opportunity to increase revenues.

“We’ve been selling promotional products for 10 years,” says Greg Meeker of Jefferson City, MO-based Brown Printing. “Until recently we had two people dedicated to sales with annual (promotional product) sales of $440,000.”

Meeker explains he looked at this business segment as a natural extension of Brown’s ink-on-paper sales efforts, as well as a way to provide additional services that would strengthen relationships.

“Many times, the buyer for both was the same individual,” he adds. “Since we already had their electronic artwork, it seemed to be a pretty easy sale.”

Brown Printing offers wearables, premium products and employee reward items, but Meeker says that if his clients want a particular item, he can find it.

In recent months the company has begun to pare down the department. According to Meeker, Brown encouraged one of its salespersons to start her own promotional business, from which she will be servicing Brown Printing’s existing promotional products accounts. The other salesperson is transitioning into print sales, but will handle promotional products sales to about 15 existing accounts.

“Under this structure, I anticipate our net income from ad specialty sales to actually increase,” he reveals.

Meeker admits it can be difficult to balance pricing and quality. Yet it makes sense when his company prints a job for a marketing campaign or trade show, that it handle the promotional products, as well.

Brown Printing mostly targets its existing client base, with its sales staff working together to refer business back and forth from the print side to the promotional products side.

“We have current print customers that started out as promotional products customers,” Meeker points out.

Sterling Idea
The idea of offering a total package to clients, along with the added revenue opportunities, is just what John Evans, vice president of Sterling Sommer, is seeking.

The Tonawanda, NY-based commercial printer is currently incorporating this new offering into its business. Offering promotional products will be complementary to Sterling Sommer’s core print-related services, and the company completed research to see if there was demand for these type of products among its customer base.

“I don’t want to print the products,” says Evans. “I am just looking to truly promote the concept of one-stop shopping. This is a logical extension of a printer’s portfolio.” PI