Companies budgeting on a calendar year basis, and that is most corporations, face the same reality at the end of the year. Rarely is there a company on target with their budgets. They can be under or over but, more often than not, there is money allocated to a variety of budget lines left over. In the case of annual budgets for a sales and marketing line, it is use it or lose it. They cannot carry forward any unspent monies. Not all corporations are profit healthy this year but, in this chaotic economy, many, many are. In what we might consider a “normal year”, various departments are asked to cut spending in the last quarter to make their P&L look better. That may not be the case with a large sector of businesses in 2022.
Your assignment, should you decide to take it on, is to reach out to any and every corporate customer. As usual, the secretary will disavow any knowledge of your mission. Your question/proposal is to help your managers best manage any surplus they may have. In effect, you are saying…may I help you spend your money.
“Ms. Raymond, my call is to see if your budgeted advertising and promotional expenses for 2022 have been fully allocated. You know better than I, that, if it is not spent, your department loses those funds. So, I can quickly review your promotional campaigns and lock in pricing and availability before the end of year. Inflation and supply chain issues are a killer. We can help make your 2023 programs successful.”
Accountants rule budget surpluses. Some may need to see an order of merchandise in their warehouse. Some may accept an order in progress, but not completed. Others may accept that an order is being held by an outside vendor such as you. Others may not be as diligent and simply take a proforma invoice as acceptable to be charged against the 2022 budget. This is vital information for you and the client to review so that they don’t get screwed by their auditors and, in turn, you can get screwed too.
Spending excess funds is best allocated to promotions and promotional products that are always ordered such as wearables, regular trade show promotions, etc. It is also an opportunity for you to convert the client who says... I like it, but not ready to buy that yet. If you offer some kind of incentive, you may wind up with the order. What is the incentive? How about 10% off. If an item is $1.00 on an “A” and you offer 10% off, you will bill .90 cents, make .45 per unit and laugh your way to the bank. If your client does not spend it, the money is gone with the wind so you might as well offer the discount and bank the funds.
December sweeps can be initiated on the phone but, please, not by email. The best practice is to call and set up a holiday meal with the client to go over any left-over budget and preparing for next year. It is the time you start the conversation about future promotional planning. You will want to get to work early on the creative side and on the supply side. You want to avoid supply chain issues as well as lock in pricing in what seems to be an ever-spiraling upwards economy.
Joel D. Schaffer, MAS is CEO and Founder of Soundline, LLC, the pioneering supplier to the promotional products industry of audio products. Joel has 48 years of promotional product industry experience and proudly heralds “I was a distributor.” He has been on the advisory panel of the business and marketing department of St. John’s University in New York and is a frequent speaker at Rutgers Graduate School of Business. He is an industry Advocate and has appeared before the American Bankers Association, American Marketing Association, National Premium Sales Executives, American Booksellers Association and several other major groups. He has been a management consultant to organizations such as The College Board and helped many suppliers enter this industry. He is a frequent contributor to PPB and Counselor magazines. He has facilitated over 200 classes sharing his industry knowledge nationwide. He is known for his cutting humor and enthusiasm in presenting provocative and motivating programs. He is the only person to have received both the Marvin Spike Industry Lifetime Achievement Award (2002) and PPAI’s Distinguished Service Award (2011). He is a past director of PPAI and has chaired several PPAI committees and task forces. He is a past Chair of the SAAGNY Foundation, Past President of SAAGNY and a SAAGNY Hall of Fame member. He was cited by ASI as one of the 50 most influential people in the industry.