Promo Marketing Top 50 Distributors 2012: The Interviews
Maybe more than other years, 2011 was a year worth thinking about. Not because it was particularly successful (though it was for some), nor because it was inordinately revolutionary (though big changes did come). Not because it was Earth-shattering or business-breaking, not because the wheel of business fell apart hopelessly or got reinvented 1,000 times over. What mattered about 2011 was that it was the year of business-as-usual.
The year illustrated the lifetime of struggles a business faces almost perfectly. As old threats died down and were mastered (the recession), new ones appeared and promised danger from a whole new angle (government PR smears against promotional products, stricter control legislation against physical products). Technology was typically disruptive, bringing such changes as social networking moving from a nice perk to a major competitive edge for those who understand the idea of social selling. Businesses folded, got purchased and merged in ways that would affect the flow of the industry for years to come.
For all the same struggles however, there was also all the same fighter's heart. Still reeling from a recession that broke plenty of other industries, ours kept its footing and braced to fight the newer (old) threats. Lobbying efforts started to get traction with the government, technological aptitudes continued to grow, and distributorships kept innovating, thriving and expanding.
As with all our past features, this year's Top Distributors piece focuses on some of the best and brightest in our industry. Read on to see their thoughts on how they survived and flourished in 2011.
1. Bensussen Deutsch & Associates (BDA)
Woodinville, Washington
Principal: Jay Deutsch, CEO and Co-founder
www.bdainc.com
Promo Marketing: What's one of the biggest leadership lessons you ever learned, and how did you learn it?
Jay Deutsch: Invest in your people and they'll invest in you.
We have the most amazing team. I would put our people up against anyone. Their passion, drive and commitment to this company is astounding. We are successful because of the great work produced from all departments across the agency. And when clients walk our halls, they're always quick to comment on the great vibe at BDA. Our greatest satisfaction comes from being named a best-place-to-work eight years running and it's all thanks to the great folks here. We genuinely see ourselves as a family.
PM: What's the biggest way technology is changing your business? What do you expect the biggest technological change to be in the near future?
JD: Technology is granting us the ability to be much more creative and innovative while increasing speed-to-market for custom products. We've also added internal resources focused entirely on digital marketing and mobile initiatives. The next technological advancement in our industry will likely revolve around providing consumers or crowds greater ability to customize and personalize individual products.
2. Proforma
Cleveland, Ohio
Principals: Greg Muzzillo, Founder, and Vera Muzzillo, CEO
www.proforma.com
PM: How do you set goals for yourself? For your company?
Greg Muzzillo: One thing I believe about setting goals is that goals don't matter. A lot of people want to talk about goals, a lot of people want to talk about strategic plans, and I don't think any of that matters unless you know why you want to accomplish your goals, unless you know why you want to execute the plans you're making. I think most people don't start there with the why. Why do I want to do this? At Proforma we believe in starting with your dreams. It might sound stupid, it might sound corny, but it's real, and it's real important because if you talk to a lot of people, year-in and year-out, they get the same results and they get the same results because they don't know why they want to do anything different. If we don't dream big enough, goals don't matter and plans don't matter, so we start at Proforma with number one, dreaming.
PM: What's one of the biggest leadership lessons you learned, and how did you learn it?
GM: You know I've watched, mostly on the print side, as many of the large competitors we've had have gone out of business, or have flailed away and flailed away. At one time they were multi-billion dollar organizations, and if you watched them, what happens over time is that they create an Ivory tower, because everyone wants to build a fiefdom, right? Or, most people do, and that's the tendency of organizations. Eventually entrepreneurial management gives way to professional management, and professional management can't figure out what toilet paper to put in the bathroom without hiring a consultant, because they don't want to lose their jobs. So you have to keep the organization flat, entrepreneurial, and most importantly, you've got to listen to the people on the street who have relationships with customers that drive the top line. The headquarters doesn't drive the top line, the ivory tower doesn't drive the top line, the people in the fields drive the top line.
I've watched those large organizations flail away and flail away because they've lost touch with the people who have the relationships with the customers. We at Proforma refuse to do that. We've got a very flat organization, and our folks out in the field, our members, 700 or so of them, elect their own representatives regionally. Those representatives present ideas, we call them our owner advisory council, and every step of the way, they're with us, guiding us, planning with us, and helping us shape the future of Proforma. Because they know the reality of the street, and the reality of what it takes to get new customers and keep the ones that we have.
3. Integrated Merchandising Systems LLC (IMS)
Morton Grove, Illinois
Principal: Rick Remick, CEO
www.imsfastpak.com
Due to scheduling conflicts, Remick was unable to comment this year.
4. 4imprint Inc.
Oshkosh, Wisconsin
Principal: Kevin Lyons-Tarr, CEO
www.4imprint.com
PM: What's the biggest way technology is changing your business? What do you expect the biggest technological change to be in the near future?
Kevin Lyons-Tarr: There really isn't a facet of the business that isn't touched by technology in some way, so to some extent you could argue it's the ubiquity of technology that represents the biggest change.
PM: In 2011 and 2012, government from the national level down has been vocally condemning its own promotional products as "unnecessary government waste." What do you think about this? Generic government scapegoating and placation, or something more threatening?
KLT: I'm not sure it rises to the level of "threatening," but it certainly is unhelpful and disappointing. Then again, so much of what's happening politically is disappointing. Fortunately, we have many wonderful customers that work in the public sector who know that when used appropriately, promotional products are far from wasteful-they work. I have faith that they will find ways to make the most of their (necessarily) reduced budgets and that promotional products will still have a valuable place at the table.
PM: What's one of the biggest leadership lessons you ever learned, and how did you learn it?
KLT: Get the right people on the team. Make sure they know what the objective is and how they'll measure success, and then give them room to "do their thing." That's been learned by applying that philosophy here and watching it work!
5. Geiger
Lewiston, Maine
Principal: Gene Geiger, MAS, CEO
www.geiger.com
PM: What's the biggest way technology is changing your business? What do you expect the biggest technological change to be in the near future?
Gene Geiger: Well, technology basically touches two key areas: communicating information and enhancing business transactions.
We all have access today to vastly more information (data, images, video, user reviews) than we could even imagine just a few years ago. Our customers know-or can find out-about costs, suppliers, and products that we used to hold close. We can source products from anywhere and display them in our web stores. As physical doors have been harder to get through, we now have virtual access via LinkedIn, Facebook and the like.
Of course, we now transact business-move orders, approve proofs, etc.-in minutes. Distance and language are no longer business impediments.
Our challenge and great opportunity is to figure out how we can integrate the many "virtual" tools into the still-vital process of understanding customer needs, collaborating for solutions and delivering value. And we have to do this when our customers are so deluged with information and pressures that they are severely limiting the time and access they will grant us, time we need to do our jobs well.
PM: In 2011 and 2012, government from the national level down has been vocally condemning its own promotional products as "unnecessary government waste." What do you think about this? Generic government scapegoating and placation, or something more threatening?
GG: The great virtue of our products-tangible, long-lasting-also makes us an inviting target when people are so frustrated with and distrusting of governments. Compare how easy it is to put a pen or bag on camera versus communicating the vastly more costly Medicare fraud or Congress pushing wasteful weapons programs.
I think we have to accept that there is unnecessary spending throughout government, including some of the promotional products that are used.
PM: What's one of the biggest leadership lessons you ever learned, and how did you learn it?
GG: I'm constantly learning how much I need to learn-or relearn. I'm not sure I can get into the detail that these questions seek, I'll just say over the last few years I've been reminded how organizations fall into routines with an inertia that takes hold. We keep on doing what we are doing and tend to ignore external changes and as the book Good To Great calls it, our "brutal realities."
I have noticed the consequences of my not wanting to confront new realities and make the difficult adjusting decisions. As the leader of this company I have to constructively keep up a certain level of dissatisfaction and urgency so that we minimize the self-congratulations and recognize and deal with our weaknesses quickly.
Voices from the Top
Wondering what the rest of the Top 50 have to say about the industry today? Check out some of the best responses from the remainder of the ranking companies
Promo Marketing: How do you set goals for yourself? For your business?
"Our philosophy is that goals need to be team-oriented and must strike a balance between being reasonably attainable and aspirational. Our intent is to maximize our collective performance by mutually agreeing upon what is possible and then working together to realize the success that can be achieved. We agree on the standard, we agree on the vision and then it is not difficult to agree on the specifics."
- Marc Simon, CEO of HALO Branded Solutions
"I think goals, at a high level, is the cornerstone of any successful person or business, and setting goals and having the right metrics to support those goals is critical. ... As a business, we're very metric-centric, where each department is doing whatever it is they're supposed to be doing to accomplish our annual operating plan. If we are not measuring the details of the business, then things get lost or our ability to execute won't be as clear."
- Jason Black, CEO of Boundless Network
"Our company spends a significant amount of time in strategic planning sessions and then develops an operation plan from the best ideas generated from the strategic plan. Less is more when it comes to focusing on what you want to accomplish!"
- Jay Donlin, Exec. V.P. Sales & Marketing, Newton Manufacturing
"Our corporate goals are based on monthly financial numbers driven from sales margin, so operating the organization with costs in line with revenue margin is our objective. (We are transparent with these this goal and the numbers with all employees.)"
- Michael Emoff, CEO of Shumsky Enterprises
PM: What's the biggest way technology is changing your business? What do you expect the biggest technological change to be in the near future?
"I think one of the most interesting changes right now is the migration of really everything moving to smart phones. I find I'm never at the bleeding edge of technology, but I find that right now I travel primarily just with an iPad and an iPhone. I have a very light laptop, but it seems like it weighs 500 pounds now. I'm in my office and it's sitting on my couch collecting dust. I don't think I've used it in probably the last year. That would be one of most significant changes, things moving to the cloud and moving to mobile."
- David Woods, MAS, President and CEO of AIA Corporation
"Technology is both a blessing and a curse. There are now literally thousands of tools and applications that enable us to get to market better/faster/cheaper. So it's a great gain in productivity. The curse is that our clients now have higher expectations for new technology (social media, transparency, customization of reporting etc.). So there is a perpetual cycle of ongoing investment in new technology. Additionally, the availability of international "sourcing" websites has allowed customers to conduct their own searches for lowest cost products-often times without properly vetting the reliability and compliance of the manufacturer. Finally, mobile shopping apps will continue to grow and explode in 2012 and beyond. It's estimated at 25 percent of the market now and will continue to grow."
- Jerry Mulligan, V.P. of Sales/New Business Development of Chamberlain Marketing Group
PM: In 2011 and 2012, government from the national level down has been vocally condemning its own promotional products as "unnecessary government waste." What do you think about this? Generic government scapegoating and placation, or something more threatening?
"To a degree, we have brought this outcome upon ourselves. For years we have accepted the low barrier to entry into our business and failed to focus on providing solutions versus selling products. When price is primary driver of value, you eventually arrive at the bottom of a downward spiral-COMMODITY. While our industry has made great progress in this area in recent years, we are paying for our government's past sins as well as from those that took advantage of selling them products which didn't meet their specific educational or marketing objectives. Call it corporate greed, lack of regulatory oversight, or just government waste, but all have contributed to increased scrutiny and more regulation from government and of government. From this perspective I would suggest it has been more about scapegoating, but regardless, we all need to consider the larger impact on our industry when it comes to how we position our medium in the marketplace."
- Jay Donlin, Exec. V.P. Sales & Marketing, Newton Manufacturing
"We learned from the pharmaceutical industry that pointing at promotional products is an effective way to obscure the real issues and confuse and mislead government regulators. Now, politicians who have always relied on the effectiveness and economic efficiency of using promotional products for their election campaigns are doing exactly what Pharma did, only they are relying on the public to be gullible enough to shift focus from the real issues of government overspending. The most dangerous aspect of this is that promotional advertising and the products we use are being disparaged repeatedly in the national mainstream media. If business leaders, many of whom have close relationships with politicians, follow the lead of their elected officials, we could see real damage to our industry. The loss of traditionally low margin government business may not have significant impact on the industry."
- Kurt Kaeser, CEO and President; and Gregg Emmer, CMO and Vice President, Kaeser & Blair
"Promotional products represent the best bang for the buck in advertising and marketing. ... As a result, our industry has grown every year for the past 35 years, with only two short exceptions. We employ over 450,000 people and produce over $17 billion of commerce. Among the many groups that understand the value of promotional products and use them widely are the very politicians that attempt to grandstand with media events castigating promotional products. That is why it is so important that all of us volunteer our time to support PPAI's government relations activities and answer the call when we ask you to educate your own elected officials as to who we are and why we exist."
- Marc Simon, CEO of HALO Branded Solutions
PM: What's one of the biggest leadership lessons you ever learned, and how did you learn it?
"I think the main thing is that you've got to have a passion for what you do. If you don't have a passion for it, go find something else that you do have a passion for. I think that's a cornerstone. I have a philosophy that life is short, we're all going to die, you are only on Earth for a short period of time, so you really need to not be scared, take risks, follow your heart, follow your dreams. The people that are the most successful in life are the ones that are also the most risky. I think that people have the ability to be whatever they want to be if they have enough courage to step outside their comfort zones, more internally than externally."
- Jason Black, CEO of Boundless Network
"Leaders can't create themselves. It is people following that create leaders. Establishing an environment where everyone can excel from their own participation and not at the misfortune of anyone else has revealed more leaders than anything else. If we are considered leaders by the people we interact with, it is because of upholding that principal."
- Kurt Kaeser, CEO and President; and Gregg Emmer, CMO and Vice President, Kaeser & Blair
"Keep things simple, articulate the ultimate vision of what you are trying to achieve, be sure you have buy-in from the people on whom you are dependent and then spend your own time helping your team be successful in what they are doing. I learned this as I came to grips with the fact that I only had so many hours in the day and that I had to find an effective way to leverage my own time to achieve the results I sought."
- Marc Simon, CEO of HALO Branded Solutions
Rounded Perspectives
Though high-earning (each averages between $4 and 6 million yearly), the following companies didn't quite crack into the Top 50. They were kind enough however, to talk with us about our industry's struggles with the government and provide their perspective.
Promo Marketing: In 2011 and 2012, the U.S. government from the national level down has been vocally condemning its own promotional products as "unnecessary government waste." What do you think about this? Generic government scapegoating and placation, or something more threatening?
"I am of two minds with this.
"I think there is a lot of hyperbole here as the government needs to demonstrate that they can cut costs. Promotional products are an easy target, so it's not surprising they would hone in on this line item. However, what the government says and what it does is another story. We have had government clients in the U.S. and Canada for years and growth in this segment continues to be strong. We have learned that we need to be laser-focused on value in this segment. While good pricing is a part of this, what's more important is whether the campaign delivers overall value to the client (i.e., did the products allow the government to communicate a particular message, enable change or connect with a constituency?) If something delivers value, it rarely ends up as a line item to be cut from the budget.
"The government does have a point though. Our industry needs to be better at delivering value to end-users, otherwise our medium will be put on the financial chopping block. There is a lot of waste in our industry as evidenced by the poor promotional campaigns that end up in the garbage bin. I attribute this to poorly executed campaigns where the distributor takes the order (at any cost) without regard for the client's end objective. When this happens, everyone loses as the end-client sees our medium as landfill that's ripe for cost cutting."
- Mark Graham, President of RIGHTSLEEVE and CEO of Commonsku Inc.
"We think the various government responses are as predictable as the sunrise. When budgets are tight, all nonessential expenditures are scrutinized. Promotional products, certainly when compared to police protection, public education and the like, are nonessential. Yes, they can (and do) play a key role in, for example, educating citizens about a new tax law or reminding them to turn off the lights to save energy, but they are not going be lumped into the "essential" category during times of severe budget cuts. So in downturns, politicians will pick the easy targets to show they are doing something about 'wasteful spending,' while continuing to ignore the real drivers of waste, like runaway health care spending, big business tax breaks, legal reform, etc. We think the more threatening angle is that most of our product ends up in a landfill after three years. And most of it is made in China. And most of it isn't consistently tested for unsafe ingredients or substandard labor practices. Unless we are able to create an active constituency with a unified voice (hint, hint) that our elected leaders can hear, the bigger fear is that we are an easy target because we don't have our act together (rather than we contribute to 'unnecessary government waste')."
- Danny Rosin and Robert Fiveash, Co-Presidents of Brand Fuel Inc.
"California Governor Jerry Brown issued a number of unfortunate statements 'condemning' state acquisitions of promotional products, despite using buttons, T-shirts, yard signs, bumper stickers and hats in his own race-so clearly he must believe they have some use and worth. It disappoints me that our industry has allowed its value to become minimized while much more expensive and less effective means of advertising and government spending remain unexamined. State budgets are not in ruin because of the cost of promotional products and branded apparel-that's ridiculous. My company has enjoyed a 30-to-40 percent growth rate over the past few years because our sales force takes pride in what we do and are able to articulate and defend the value of our work and products."
- Zachary Tyler, President of Creative Marketing Concepts