Would you have gotten in the ring with Sugar Ray Leonard in his fighting prime? Neither would I! But that is exactly what many people in the promotional products industry are considering doing when it comes to Amazon and Walmart.
Competing with them, if I continue a boxing metaphor, is like trying to box above your weight class. It might be entertaining for others to watch but, in the end, you will surely take a beating!
Amazon and Walmart sell stuff and they sell it better and faster than anyone. Recently, Amazon secured a patent for on demand garment decorating automation. 1 shirt or 1,000 out the door and delivered the next day at a lower price than anyone else - that is what they are planning. How far in the future will this be a reality, I don’t know, but a reality it will be!
Now consider that both companies could sell at break even for years and never even notice a blip on their bottom line. Can you do that? The only answer for our industry is to stop selling stuff.
Job number one will have to be amplifying the value of working with you rather than chasing the lowest price online. The most expensive marketing is marketing that does not work! The potential for marketing that does not work is vastly increased if someone without industry knowledge “shops” for things online and is influenced by the limited available choices and price.
One of the fears I hear most often is that once all the work is done learning what the customer wants to accomplish, making recommendations on messages, the promotional product to use, and distribution - that the customer will then go online and shop for the lowest price. This is a very real worry, but nothing new! 30+ years ago I worked on a project for a very large international “soap” company. The project was for one of their food divisions. We developed a concept they really liked. But then they bought the components for the program from the lowest bidder!
I sent them a bill for the creative work! Since they were very familiar with working with agency type businesses, they paid the bill. But - from that point on my quotes for promotional programs included a line item for “creative” and noted that the amount would be included in the price if the work was completed with me.
I made mention in this column several months ago that the online print and promotional mega-company Vistaprint has opened a retail storefront operation in Toronto. They realized that to compete with the likes of Amazon and Walmart they needed to become more like you - not them! They realized that personal advice from someone intimately involved in the promotional advertising/specialty marketing industry would be a greater benefit to customers than a low price for an ineffective promotion.
Yes - there will always be the simple order for 500 mugs. And yes, there will be a race to the bottom on pricing for these orders. But only you can ask how they selected the mug, what they hope to accomplish, if they have calculated the distribution costs into their budget and if they had considered other items that might more effectively reach their goals. Only you can change the focus from the cost per item to the cost per impression (CPM). Only you can make their budget accomplish a greater result than what they were initially planning to do.
I take my cars to the same mechanic because he always does a fine job, knows his business, specializes in the brand I drive and treats me as an important part of his business. I am quite sure he is not the lowest price in town, but I don’t really know because I never checked! Same for my dentist, my lawyer, my financial adviser. Price is not my most important consideration. I want VALUE!
Do everything necessary to make it more valuable to do business with you than shopping online for price alone. Work with your clients/customers well in advance of their needs. Help your clients avoid “rush” production due to delayed thinking and planning. Well designed programs produce the best results at the best value - but they take a little time to put together.
One final note, you will lose business to the low price shopper but chasing that customer would never ultimately be a profitable client for you. Accept that what you get is more time to work with clients that want the extra value you bring to every project. Do good work, be reliable, know your client and you won’t take a beating!
Gregg Emmer is chief marketing officer and vice president at Kaeser & Blair, Inc. He has more than 40 years experience in marketing and the promotional products industry. His outside consultancy provides marketing, public relations and business planning consulting to a wide range of other businesses and has been a useful knowledge base for K&B Dealers. Contact Gregg at gemmer@kaeser-blair.com.