Under the assumption that the world will return to some semblance of normalcy, the biggest question is how will that affect our business and industry as a whole? While I am firmly pessimistic about the short-term recovery of our industry, post pandemic, I am more optimistic for our long term. One thing we can all bet on, it will not be business as usual. Priorities will change, markets will disappear, needs will be different.
Now is the time to create a recovery strategy. I hear, read and watch our industry seek survival strategies and wish there was an immediate answer but, those who have the resources to wait it out and return, need to think of the day after tomorrow.
As a supplier, I see a significant decrease in distributors and distributor sales forces. Those on straight commission may have little choice but to find a job with a salary and benefits. Not everyone will be able to survive a gradual rebuild in commission income. There will be a reduction in suppliers. Those who exist purely as importers may no longer be a preferred or trusted source. Small family suppliers may determine the cost of resurrecting is greater than the rewards. Remnants and assets of deceased supplier companies can be gobbled up by the top 50 suppliers. While it would tempt venture capital companies to buy a business at a cheap price, the risk may not correspond to the reward.
All businesses will immediately focus on a return to normal programs and first up is asset recovery. The key asset will be people. With the massive layoffs and terminations, they will have to bring back an employee workforce on a gradual build. Plants will rev up slowly, workers recalled. Not all trained workers will return, if asked. Some will change careers, find new jobs and simply scatter in the winds of pandemic. The first aid need will be in HR.
I doubt there will be a pressing need for a mug or key chain but, there will be a pressing need for moral builders and training aids. So, think about the tools, motivational products and contributions you can make towards solving this problem. Now is the time to get creative and even be innovative - be it a JPEG flyer or a flip book, be ready. Many businesses will not have immediate graphic capability, so consider offering stock designs to allow smaller business an opportunity to use a turnkey program to build employee morale. We have in our arsenal things from big graphics to desk top tools; it will not be the item but the message.
It is anyone’s guess as to how much of a company’s workforce will return - hiring and training will be another area of immediate need. Can you help? Can you assemble the tools to present to clients for immediate use in solving their problem?
The lessons being taught by this pandemic will stimulate an immediate uptick in safety programs. Tools will be needed to get across the health and safety message. There are scores of direct sellers offering stock thematic posters and products, consider your own. Perhaps you can team with others, perhaps you can unite with a regional association. If you go it alone, there are thousands of designers to partner with as they need future revenue, as well. Offer a royalty for all sales made with their graphics.
We excel at helping businesses with products and programs for application to their sales force. Overall, I can’t see the number of salespeople anywhere near prepandemic numbers. Both sales and sales staff will have a gradual increase as the economy restores. Incentive travel may take years to return. Sales conferences may forever turn virtual.
In marketing, brand building and brand awareness may have to rely on the prepandemic basis it had achieved. This means less spending on good will, less advertising and marketing However, the need for a business to let its customer base know “we’re back”, will be on the very top of their marketing needs list. Again I go back to the direct marketers with catalogs of stock graphics. In the past, if you we’re opening a store, you didn’t need an artist for a banner, you simply bought a stock “grand opening” banner and satisfied that need. Quick and easy. As an example, if a company such as Galaxy Balloon focused on developing stock graphics with effective promotions like “we’re back”, it is easy to see car dealers and other retailers all using Mylar and latex balloons to fly over their establishment. So, it is my hope that while having all this downtime, your suppliers will focus on answering ... what will be the primary needs of businesses and how can it satisfy the needs with appropriate stock graphics on products? Your job is to try to find suppliers with that thinking and gather what you need to go to market with them the day we get back to business in a new normal.
It is only a matter of time before we brand a surgical mask and other virus related items we are now aware of. In recent days, we have seen thousands of distributors work as procurement companies. With that in mind, there will be distributors considering a ramping up of procurement services. Does it really matter if a bottle of sanitizer is branded when needed for a non-promotional purpose? Procurement is in our future; however, we will not be able to work on the margins we love. Procurement margins are slim. There is still money to be made, but an “A” will turn to 10%. Hey, we may not be used to small margins, but huge middleman businesses thrive on margins or markups from 5% to 15% - ask print brokers, mfg. reps in thousands of different SIC codes. I believe there is a better chance for small to medium sized companies to fill this arena over the big guys. Bigger companies will find it difficult to maintain a sales force on slim margins, unless they build substantial volume. The takeaway here, in your business rebirth, consider yet another service of your company - straightforward procurement.
The pandemic cry is “made in America”. Ultimately, what is made in America is beyond your control (see my previous column). Politics aside, getting America to manufacture is easier said than done. Consumer demand for cheaper products, will not go away. “Cheaper” was the controlling dynamic that forced us to import it. Much of the product we sell cannot be made at home. The economy of production scale has been set and breaking it into pieces will cause prices to rise, availability issues and more. In an industry that lives on tight order delivery times, we will have great risk of failure. Still, we do have a fleet of companies who make it all here. Once again, the need to catalog these sources now, for future promotion, is strategically wise. Our search engine services (ASI, SAGE, etc.) need to bring this information forward in grandiose form. If not, you need to do this.
Some random shots:
- The association world and membership retention will be shattered
- Education will look to comfort their student body and build immediate “normalcy”
- The education market will need help in growing distance learning
- Every related business will shower the healthcare workers, hospitals, etc
- The fund-raising market will explode in an upward curve
- Wellness programs will get more attention and funding
- Digital advertising will continue the incredible growth curve but, in face of more competition per click rate, ideas will be needed to increase response
- Alternate distribution will be a creative endeavor
- The USPS will see a renaissance lending to more in the mail ideas
- Products will be repositioned as survival tools for future events. A flashlight is positioned as a home item by us, but as a tool to find victims in a catastrophe
- Customer service will not be the same until customers return
- Offering guaranteed sterile packaging will become common
- Terms will shorten as cash is needed all along the supply chain
- Credit ratings will be destroyed, and pro forma terms will be more required than ever
- Trade shows, as we know, will be dead
- Online purchasing will take a significant share of the market as buyers have become more comfortable with the method during the pandemic
- Face to face meetings will be much harder to get
I wish everyone well, live long and prosper. We all recognize that daily survival is our focus but, we need to look at tomorrow. It will come, the sun will shine, and we need to be prepared, retooled and be fast out of the starting gate. It will never be business as usual.
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.