Maximize Margin Dollars: Sell, Don’t Shop
As a 30-plus-year promotional products industry veteran, one of the recurring discussion topics with my colleagues has been the increasing influence of a “consumerism” mentality in our industry sourcing and selling practices. It makes sense. While most evident with the younger promotional consultants and merchandisers, all of us have become masterful at shopping.
It has never been easier to buy products in our everyday lives, searching by item, price or features in seconds. Your clients can too, obviously. That is the challenge and most consequential result in our work lives, of course. We have all become increasingly guilty of focusing on shopping for the best price while sacrificing margin and profitability on the order and our overall portfolio.
Margin, Not Price!
Drilling down on the most basic of scenarios and any of our common everyday projects and orders, it is pretty revealing that either we have done a marginal job of sales training or we are dropping the ball on monitoring ourselves and managing our staff.
On more than 75% of the orders we see at our factory, the distributor is selling at suggested catalog pricing (often with a set or blanket nominal promotional discount offer to their client). If that is standard operating procedure, why do we automatically default to the lowest price or cheapest item if there is opportunity to offer a better solution to your client with more revenue?
It is basic stuff, but as suppliers, we have those conversations all the time and more often than you can imagine. The concept of maximizing total revenue dollars and margin for an order are not top of mind—especially to many new distributor salespeople.
Clients can shop on their own on price (and, yes, that is one of our biggest challenges), but the opportunity for you to add value and earn your piece of the pie rests in providing creative and better solutions without busting their budget, while maintaining your target margins and sales budgets.
Of course, in the current climate of low supplier inventories and more volatile lead times, we have additional opportunities to prove our worth and capitalize on the market shortcomings by providing the extra service and legwork required to get the merchandise delivered. Directing the client to more proven sources and products with less uncertainty and problems may indeed not be the least expensive options.
While we need to be experts at sourcing, we need to keep the focus on reselling and providing solutions:
• Does your client really need the cheapest T-shirt or would she be better off providing her audience with their next very favorite feeling or performance T-shirt that they wear for years? One that's truly appreciated when received and generates endless advertising impressions for both the wearer and their admirers.
• Isn’t a fully decorated item with a true custom-product-look often more impressive and attention getting than a one-color imprint in a modest or inconspicuous location? Not always, of course, but many marketers can be sold on featuring the four-color logo that they painstakingly helped create or introduce.
• Does your buyer have a weakness for name-brand merchandise that will only elevate their logo and brand? Will the recipients appreciate, use, show off, and keep the items more and longer if the value perception is elevated? Is the superior item or quality more "on brand" for your client’s company and messaging?
• Would the promotion be even more successful if the packaging was impressive and worthy of displaying? Unboxing events have reached the consumer level. Online bragging about the item can take any giveaway to a completely new level of promotion via social media. The added exposure of a creatively presented item or group of items can provide additional brand exposure with the same attendee count and list.
While these opportunities to upsell are not always fruitful, the questions and suggestions are worthwhile and should be second nature in the process. Elevating both the promotional value and profitability is always top of mind for industry superstars. If the client "doesn’t have the budget," maybe it is doable by adjusting the recipient count or distribution frequency. And again, in today’s climate of limited product availability, perhaps fewer but better makes more business sense in budgeting your time and resources in delivering the project.
At the end of the day, we are all sales consultants and resellers first—not buyers, and definitely not shoppers. We earn our value, in part, by taking that pain, effort, and risk of "shopping" off the client’s to-do list and providing winning solutions and hassle-free sourcing, from where our customers sit (and shop).
For more promotional products sales strategy and tips, visit www.mark-jenkins.net.
Mark Jenkins, managing director of Pioneer Balloon Co., has been involved in the promotional products industry for more than three decades. He has led the national sales and marketing efforts of three different suppliers. Jenkins is a road warrior, traveling nationally an average of 36 weeks per year, visiting distributors and participating in trade shows, sales meetings and industry events. A former PPAI board member and chair, he has been active in volunteering, bringing his industry knowledge, perspective and leadership to the table. Visit his website here.