Highlights of a recent interview with our President/CEO Scott A. Van Egdom and the EUWIFO Business Report on the worldwide landscape and prospects of brand marketing and promotional products/technology integration for 2013 and beyond.EUWIFO: Thanks for your time and insight today Scott. How has your operational structure changed in 2012 and what do you see in 2013?
VAN EGDOM: Thank you. We have taken a very proactive approach with our business model and overall I’m pleased where we are and where we are going. A few years ago we saw the need for wider product lines, distribution channels and world class manufacturing, sourcing and logistics. We also say the need to align ourselves with marketing and brand agencies that share our common values and mission. With that, we have molded our model into three entities: our custom technology division (CFgear), our custom promotional products division (CFpromo) and a division dedicated to fundraising activities (Dakota Fundraising). Each plays a significant role for our customer base and their needs, but our key is leveraging all of the above under one roof and complementing the businesses with some of the brightest and most creative minds in not only sales and marketing, but branding, logistics, design, financial and international supply chain experts. Combined, we feel good about where we are and where we are headed.
EUWIFO: What is the most recent figures on revenues generated by promotional products?
VAN EGDOM: I haven’t seen the latest Q4 ’12 figures to this point but based on what I saw through Q3 ’12 more than $17 billion was spent worldwide by companies interested in marketing their brand and products through promotional items and custom technology. Although overall growth has slowed during the worldwide economic slowdown, revenues have climbed as those who know the importance of maintaining their brand identity and growing their product lines remain convinced the investment is well worth the time.
EUWIFO: How have businesses evolved in 2012 regarding promotional products and marketing?
VAN EGDOM: It really breaks down into two categories of needs. Small to medium businesses and large Fortune 1000 type accounts. Larger customers are looking for brand partners. Not necessarily to drive a brand, as they have internal staff for this concept, but actual help with their own teams on how to use products, services and technology from the promotional products company as part of an overall strategy. It’s really about education and integrating corporate messaging and brand into the products and not always the products themselves. We talk much more about our specific Promo Papers and things like ROI than we used to. We literally sit at the table with brand agencies and the customer to help devise real promotional products strategy versus ten years ago when just handing out coffee mugs at trade shows was the norm.
EUWIFO: We hear much about consolidation in the promotional products companies in the US and internationally with suppliers. What is your take?
VAN EGDOM: There is a fair amount of consolidation on both ends. In the US, companies that only sell products are consolidating at a rapid pace. Lots of mom and pop type shops are being forced to partner with bigger entities that have more marketing skill and clout to remain viable. Internationally the pressure to deliver higher quality at lower prices is driving massive consolidation on the supply side. We recently returned from a trip to Asia and the amount of mothballed capacity was startling compared to what we saw last year. There is tremendous pressure to lower costs and return stronger ROI’s for businesses I believe driven by need and the present economic times. Companies that just pitch products and cannot provide historical ROI data to assist the planning of the purchasing organization will begin to struggle very quickly in 2013 and beyond. In addition customers are looking for more one stop shopping and we’ve been ahead of that curve for some time as we saw it coming back in 2010 or so. Co-op buys and consolidated spend to get superior pricing and the highest ROI are number one on the radar screens of every marketing executive today.
EUWIFO: What role is social media playing and how does your organization use them?
VAN EGDOM: Social media such as Facebook, Twitter, Linked In and YouTube are changing the game in certain ways. I see social media as a bridge to excite our overall customer base with information and visual ideas on what we are doing and have done. It is also a great way to for our account executives to stay in touch with our contacts or introduce themselves to new contacts after trade shows, etc. As we look forward, the application of these social media formats in mobile devices will grow exponentially and we are working diligently to ensure our web properties are tailored to meet this rapid growth of mobile social media. I personally believe the figures that say 31% of all consumers only use a mobile device to access the internet is accurate for social media, but I also believe there are still so many companies without mobile optimized websites, that computer viewing for actual purchases and research is much higher than just 69%. Just opinion. :)
EUWIFO: How is price impacting purchase decisions?
VAN EGDOM: Price is a VERY important factor in nearly all purchasing decisions. As I mentioned before, have the best supply chain, factory direct networks, and logistical superiority is critical to maintaining a healthy business. However, organizations like ours that take time to fund case studies and research so we can share hard ROI facts, are as important as price in many cases. For instance on the CFgear side of our operation, many companies are no longer interested in using CD/DVD technology to share their message and they want to utilize USB flash drives. On paper, USB flash drives do cost more than a DVD. However, we funded a study to check actual usage rates of a USB flash drive versus DVD. The end result was nearly 60% more potential customers accessed the USB flash drive versus the DVD. Our customer was shocked. We weren't and explained that another study we had recently completed show that of the 1.2 billion computing devices sold around the world in the last 36 months, less than 1/3rd even have a CD/DVD included! It's ROI data such as this that helps a brand manager or CMO understand that price matters, but so does delivering a message and products that hit the target.
EUWIFO: What are some ways you help customers understand the value of ROI on purchases of products and services?
VAN EGDOM: There are lots of high value ROI data points that exist from the largest trade association groups. Things like the average adult male owns 8 hats or that the average adult female will hang onto a tote bag they like for on average of 4 years. Some of these data points can help in various ways. However, we take that data to an entirely new level with research and actual PROMO PAPERS on specific projects we've done or commissioned to have more ROI relative results. Promotional products remain one of the lowest costs per impression of any advertising medium, appeal to the senses, evoke strong brand retention and favorable impressions. Traditional media is no longer sufficient or even adequate with all the satellite radio options, lack of newspapers and DVR's eliminating commercials. Actual promotional products elicit higher ROI than anything else in this new age of brand and marketing management. The key to the entire equation is making sure that the promotional product or service meets the brand expectation, whether the promotional item is something tied to actual sales of a product or whether it is used as a marketing vehicle to lead to more brand awareness of a company in general. In many instances, customers need our help understanding what the the need and goal is to ensure we deliver a product or service that will return the desired ROI.
No comments:
Post a Comment