How Promotional Products Distributors Go To Market: - PPAI

How Promotional Products Distributors Go To Market:
A Study Of Strategies And Practices For Acquiring And Keeping Customers
Study By:
Richard Alan Nelson, PhD • Manship School Of Mass Communication
Louisiana State University • Baton Rouge, Louisiana
Richard G. Ebel • Glenrich Business Studies
Corvallis, Oregon
January 2007

How Promotional Products Distributors Go To
Market
A Study of Strategies And Practices For Acquiring and
Keeping Customers
By
Richard Alan Nelson, PhD
Manship School of Mass Communication
Louisiana State University
Baton Rouge, Louisiana
and
Richard G. Ebel
Glenrich Business Studies
Corvallis, Oregon
January 2007

TABLE OF CONTENTS
Executive Summary........................................................................................................................ 1
I. Preface: Is It Actually Marketing............................................................................................... 3
II. Methodology .............................................................................................................................. 4
Response Rate and Margin of Error............................................................................................ 4
III. How Do Distributors Position Themselves............................................................................. 6
Role of Franchisees..................................................................................................................... 8
IV. New-Customer Acquisition .................................................................................................... 10
Marketing “On the Fly” vs. the Written Plan ........................................................................... 10
What Shall Our Marketing Strategies Be................................................................................ 11
How New Customers Are Acquired, What Works Best........................................................... 16
Importance of Referrals ............................................................................................................ 18
Lead Sharing ............................................................................................................................. 19
Other New-Customer Acquisition Methods ............................................................................. 21
Qualifying Leads....................................................................................................................... 24
Distributors and Website Marketing......................................................................................... 24
V. Customer Retention.................................................................................................................. 26
Methods That Keep Them Coming Back ................................................................................. 26
What’s a Customer Worth Customer Relationship Management and Lifetime Value........... 31
Measuring Customer Satisfaction............................................................................................. 33
A Look at Churn ....................................................................................................................... 34
VI. Out in the Field: The Distributor Sales Force......................................................................... 36
Sales Training ........................................................................................................................... 36
VII. Analysis and Recommendations ........................................................................................... 40
Technology ............................................................................................................................... 41
Information ............................................................................................................................... 42
Confirming Customer Satisfaction ........................................................................................... 43
Seeking the New ....................................................................................................................... 44
Competition............................................................................................................................... 45
Supplier Support ....................................................................................................................... 46
Concerns ................................................................................................................................... 46
The Shape of Marketing to Come—Maybe.............................................................................. 47
Who is the target ................................................................................................................. 48
Service................................................................................................................................... 48
Innovation ............................................................................................................................. 48
VIII. Conclusions.......................................................................................................................... 49
Appendix....................................................................................................................................... 51
Cover letter and Questionnaire ................................................................................................. 52
Questions Asked in Phone Interviews ...................................................................................... 58
1

Executive Summary
Promotional products distributors want to know about their present and future. This
survey provides original data which is both reassuring and challenging. Many of the practices of
the industry have stood the test of time, yet we stand on the brink of a new era. Fewer businesses
are manufacturing in the U.S., with many pipelined into buying from China. Distributors are
concerned about being cut out by direct-selling suppliers importing from the Asian market. This,
of course, works both ways, with some distributors with large orders buying direct and cutting
out the supplier.
Critical is differentiation – how a firm can set itself apart. Most distributors are still salesrather
than marketing-oriented. Time is also an issue. Many in the business are putting in long
weeks. But working smart as well as hard will take a shift in priorities. This means becoming
more research savvy.
Opportunities exist to branch out by offering more services than simply products.
Already, customers are demanding more out of distributors than they have previously.
Historically promotional products reflect a print orientation (hence, the word imprint). However,
the problem for many distributors is to make sure they are ready to compete in a new media,
multi-lingual, ring-tone market.
Key findings:
• Most distributors don’t use a written marketing plan to seek out new business
• Large and small distributors alike rate referrals as their most reliable source for
reaching potential customers, followed by networking
• Cold calls still are a common sales approach
• Lead sharing is becoming more common between suppliers and distributors
• Sales calls, appreciation gifts, and sampling programs are the most important
customer retention methods for all distributor segments
• Distributors generally don’t employ scientific metrics to measure customer lifetime
value and satisfaction after the sale
1

• Sales training is a regular process, largely conducted internally and on-the-job
• Distributors are underutilizing the internet, lagging behind other industries
2

I. Preface: Is It Actually Marketing
This is a distributor principal talking, but her opinion cuts across all aspects of the
business: “One of the things about this industry is people don’t spend enough time on marketing.
They all think they’re marketers, but they’re salespeople.” Ouch! That has to hurt. Nevertheless,
more than a few introspective promotional products executives admit this is a fair criticism.
Much has been circulated about the subject, and that includes quantitative research such
as the various End Buyer Surveys and other studies published by Promotional Products
Association International. But in an industry so diverse as promotional products, with its 21
principal product categories (as classified in the Association’s Annual Estimate of Distributor
Sales), getting a handle on the marketing capabilities can be challenging. Also disparate are the
companies themselves, ranging in size from small mom-and-pop businesses to multi-million
dollar catalog and agency-style firms.
Every industry has had to adapt to change, and anyone can readily identify the change
agents, among them the global economy, technology and consolidation through acquisition and
merger. For promotional products, the tectonic shift began in the 1970s. Once wearables were
exhibited on the show floor, whatever was sold, how it was sold and who would be joining the
industry to sell it would never again be the same.
Time then for assessing the progress of marketing and its role as industry growth engine.
Conducted under the aegis of PPAI’s Marketing Information and Research Committee, this study
focuses on the strategies and practices that the industry’s principal components—distributors and
suppliers—employ to acquire customers and to retain them. As stated in the Methodology
section below, our findings in the supplier inquiry are published in a separate report. But channel
partners are a team, certainly in principle and often in practice. So we want to avoid a silo
reclusiveness in the presentation of the collected data. Whatever we learned from suppliers that
we feel is pertinent to distributors, we pass that information along.
3

II. Methodology
Executed in two phases, this distributor survey is a companion study to simultaneous
research on supplier marketing strategies and practices. Findings in the supplier study that are
pertinent to distributors have been included in this report.
A 23-question survey was mailed to 2,500 distributor members of Promotional Products
Association International (see Appendix 1 for a copy of the questionnaire). This was
supplemented by an online follow-up. As incentives to respond, the sample population was given
eligibility for a sweepstakes drawing involving gift certificates.
To enrich the quality of the survey data, a second phase involving in-depth phone interviews
with 40 selected respondents was undertaken. This allowed us to identify weaknesses in the
statistical data and to better understand and present some of the more advanced and creative
marketing activities that distributors are engaged in. (See Appendix 2 for the kinds of questions
asked via the telephone).
Response Rate and Margin of Error
Usable completed questionnaires from 319 distributor firms—a 12.76 percent response—
made possible a +/- 5.1 percent margin of error at the 95 percent confidence level (see Table 1).
What this means is that if we redid the survey 100 times and got responses from different
segments of the distributor database, we can be 95 percent confident that the answers would be
within +/- 5.1 percentage points of what is reported in this study. For example, if 81 percent of
those responding say they agree with a question, their answers are representative of the entire
distributor sample within a range of 75.9 (low) to 86.1 percent (high). This level of reliability
approximates statistical norms widely used in social science and business research.
4

In tabulating the responses, we also grouped distributors into two segments by size—
smaller companies (those doing less than $1 million in sales) and larger companies (with sales of
$1 million or more).
TABLE 1: RETURNED DISTRIBUTOR SURVEYS
Frequency
Percent
E-mail survey 128 40.1
Mail survey 191 59.9
Total 319 100.0
Sample Mailed to: 2,500 distributors
Response Rate: 12.76%
Margin of Error = +/-5.1% at 95 confidence level
5

III. How Do Distributors Position Themselves
In general, there are three basic types of distributor businesses:
• Product driven = “We market our products in response to customers’ advertising and
communication needs and as part of their overall marketing mix. Customers often tell us
what products they want and need.”
• Program driven = “We market our programs (e.g., company stores, safety, service, sales
meetings, trade shows, employee performance and recognition, etc.). We often market
our products as part of a larger program.”
• Concept driven = “We market our creative services, fulfillment, web service and other
niche capabilities in conjunction with the products we offer. We are part of our clients’
overall marketing strategy and supply promotional products within the overall mix.”
Concept- and program-driven businesses are an important component of the industry, but
take a back seat numerically to those firms where products are king (as compared to a more
integrated concept and program development). In an industry where the word “products” is
written large on the marquee, no wonder that nearly 60 percent of distributors stress their
fundamental importance (see Table 2). For both large and small distributors, products command
the lion’s share of effort. Products have a tangibility that holds intrinsic meaning that seller and
customer can both relate to.
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TABLE 2: TYPE OF DISTRIBUTOR COMPANY
Small
Companies
(Sales of a million
or less)
Percent (N=201)
Large
Companies
(Sales of more
than a million)
Percent (N=102)
All Companies
Percent (N=308)
Primarily product driven 66.2% (n = 133) 46.1% ( n = 47) 59.7% ( n = 184)
Primarily program driven 13.4% (n = 27) 15.7% (n = 16) 14.0% (n = 43)
Primarily concept driven 20.4% (n = 41) 38.2% (n = 39) 26.3% (n = 81)
*All Companies include those which did not specify size by sales
There is a difference, however, between smaller distributor firms and their counterparts
moving more than $1 million in goods a year. Pricing is a dominant consideration for the scaleddown
distributor. On the other hand, bigger companies are more into concept and program
selling (combining to total almost 54 percent). The data suggests that those businesses with more
resources are either more willing or better able to provide consultative selling and integrated
services. This agency model is considered progressive. However, many of the very largest
companies ($50 million and up) typically return to basics by heavily focusing on merchandise
sales.
In addition, we compared distributor type with whether or not the firms had a written
marketing plan for securing new customers and/or retaining existing ones (see Tables 3 and 4).
The results suggest concept and program firms are more at home within a strategic planning
context.
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TABLE 3: HOW DISTRIBUTORS DESCRIBE THEIR COMPANY, FILTERED BY
THOSE WHO HAVE A MARKETING PLAN*
Frequency
Percent
Product Driven 29 39.7
Program Driven 13 17.8
Concept Driven 31 42.5
Total 73 100.0
*NOTE: Due to the limited number of respondents the data in this table should be considered more
directional than definitive.
TABLE 4: HOW DISTRIBUTORS DESCRIBE THEIR COMPANY, FILTERED BY
THOSE WHO DO NOT HAVE A MARKETING PLAN
Frequency
Percent
Product Driven 155 66.0
Program Driven 30 12.8
Concept Driven 50 21.3
Total 235 100.0
Role of Franchisees
Some distributors, estimated at between six and eight percent of the total distributor
population, opt for a franchise arrangement. In a franchise system, the distributor pays a royalty
back to the franchisor (typically a percentage of gross earnings). As the number of bookings
increases per month, often the fees are tiered to a quantity discount. One northeastern distributor
says, “My expertise is selling. Like a lot of people I don’t like to stay in office. Having a
franchise arrangement gives me flexibility and allows me to spend more time selling.”
8

Cash flow can be a significant driver. The reason is that the franchiso+r handles a lot of
the back-end chores and often will provide financing (covering order costs with suppliers).
Orders can be placed directly through the franchiser’s operating system and the distributor gets
regular help desk, IT, and accounting services for payables and receivables. A happy franchisee
from the southwest indicates financing was critical in his decision to join one of the big
franchisor organizations. “The bigger you get, the more demands you face. Larger orders are
great, but if you are not in a franchise arrangement you typically have to front the cash.”
One franchisor executive we interviewed also told us, “We take care of many basic
services, including initial and follow-up training (much of it in person) at various locations.
These include our annual convention, plus the PPAI Expo and regional meetings. We also offer
webinars at least once-a-month. Franchisees also get marketing services and art department team
help as well. At no additional cost, local distributors get help setting up local websites with
provider discounts, an e-mail marketing tool and other prospecting assistance, print collateral
(including self-promotion and trade show pieces), flyers, PowerPoints, and an annual catalog.”
9

IV. New-Customer Acquisition
Marketing “On the Fly” vs. the Written Plan
In this day and age, the written marketing plan is still not a fixture among promotional
products distributors. Of all the respondents who answered the do-you-have question, more than
three-quarters (76.5 percent) said no—don’t have a written plan (leaving just 23.5 percent who
did). Those numbers are reported in Table 5, which shows a cross-tabulation of responses by
companies that identified themselves by size in terms of sales. In our study of supplier marketing
practices, we found that a little less than one-third of the large suppliers report operating from a
written plan, much less so for the smaller firms.
TABLE 5: WRITTEN MARKETING PLANS BY COMPANY SIZE
Small Companies
(Sales of a million or
less)
Percent (N)
Large Companies
(Sales of more than a
million)
Percent (N)
All Companies
Percent (N)
Have Written Plan 19.7% (n = 40) 31.1% (n = 32) 23.5% (n = 72)
No Written Plan 80.3% (n = 163) 68.9% (n = 71) 76.5% (n = 234)
*All Companies include those that did not specify size by sales
When plans are drawn up, they tend to have a shelf life of a year, but many companies
say they revisit them periodically during that time. The preference for annual plans undoubtedly
is prompted by the need to incorporate trade show attendance, budgets and other matters.
Respondents who reported having plans were asked where customer acquisition and
retention of existing customers fit into the plan. As was the case for suppliers, it appears
acquisition and retention are more apt to be consolidated into a single plan, but there are
exceptions. In fact, in some cases plans are centered on something other than prospecting and
holding. Examples: a) national accounts vs. everything else; b) specific markets.
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Most marketing plans are composed by distributor management, ranging from the owner
alone to collaboration with other sales personnel. Says one sales manager from the northeast,
“We know what our customers want because we regularly communicate with them.” Only in a
few instances do distributors engage outside consultants.
What Shall Our Marketing Strategies Be
A number of distributors indicate they use promotional products to tell their story – an
advantage that most other communication alternatives don’t have. Illustrating exactly what your
capabilities are through the medium is a practical and cost-effective way to reach out to potential
new clients.
To explore this more, we gave distributors a list of conventional company policies that
their peers embed in their marketing strategies. Hence, the blueprint to obtain new customers and
to retain existing ones (see Table 6).
Smaller distributors indicate their policies call for 1) pursuing customers of all sizes and
in all industries, 2) concentrating calls and efforts on the persons doing the actual buying, and 3)
targeting multiple buying centers within the same organization. The topmost three policies for
larger suppliers were identical.
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TABLE 6: COMPANY POLICIES EMBEDDED IN MARKETING STRATEGIES
Company Policies
Small Companies
(Sales of a million
or less)
Large
Companies
(Sales of more
than a million)
All Companies*
Percent (N =200)
Percent (N=103)
Percent (N=312)
We concentrate primarily on
large corporate accounts
We pursue customers of all
sizes and in all industries
We focus on specific
industries
We concentrate our calls and
efforts on the persons doing
the actual buying
We approach the influencers
who may be one or more
levels above the actual buyer
11.5% 32.0% 18.3%
82.0% 71.8% 78.8%
21.5% 31.1% 25.3%
62.5% 60.2% 61.2%
30.5% 43.7% 34.6%
We target multiple buying 52.5% 75.7% 60.6%
centers within the same
organization
*All Companies include those which did not specify size by sales
In addition to conventional marketing strategies listed, distributors were asked if they
pursued strategies that were unique, unconventional or not listed. Their responses appear below
in Chart A. “Unique and unconventional,” of course, are subjective assessments. In so many
cases, it’s all a matter of perspective, especially when word-of-mouth, referrals, and attending
Chamber of Commerce functions pop up frequently.
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Marketing Strategies–Unique, Unconventional, Other (As Stated in Open-
Ended Responses)
Small Distributor Companies (Sales of a million or less)
• Attend as many Chamber of Commerce meetings, business rallies, etc. - Reward bigger
clients with special perks - Take 2 clients bear hunting, etc.
• I do not make cold calls - for 20 years I have built my business on referrals.
• I live by “warm” referrals, my largest and oldest account provides me with several rich
name-to-name referrals every year. Networking, strategic alliances and joint ventures.
• Networking, working/ volunteering with charities and non-profits.
• Potential customers with corporate headquarters within reasonable driving distance.
• Referrals from “everywhere.”
• Referrals from existing customers, friends and colleagues.
• REFERRALS! 90% of our new clients are referred by existing clients, both within their
own organization, at different locations, or to people is similar parallel settings.
• Self promotional items sent or given to other companies.
• Trade show exhibits, direct mail, e-mail campaigns, website.
• Via Chamber of Commerce and table shows.
• We are currently seeking certification as a minority business enterprise (MBE), womanowned,
which will enable us to market to more government, military and government
contractors.
• We are positioning promotional items as the new wave of marketing, advertising and
promoting one’s company. We also position promotional items as an enhanced version
and/or hardgoods to a viral marketing campaign.
• We are really a marketing, advertising and design firm that uses promotional products as
part of marketing plans we develop for our clients.
• We ask for referrals from existing customers / prospects.
• We attend a variety a free networking groups in the area. Through these networking
groups we have referrals from many businesses. The actual networking meetings were
written up in a magazine.
13

• We focus on existing clients in our ‘sister’ corporations. We use Imprint Design as an
additional arm to our advertising agency.
• We focus on some mid size companies.
• We have a referral program that rewards both parties; where current buyers refer their
peers.
• We have a retail outlet for our main industry - i.e., Masons & OES.
• We leverage reference selling and use this to expand our customer base. Every customer
is asked to refer us to the next.
• We like to target medium size businesses mostly in the B-2-B world.
• We market on the internet through multiple websites.
• We network through our Chamber of Commerce and other organizations. We are
selective in the clients we pursue. We do not advertise in the Yellow Pages. It generates
calls we do not want.
• We read business journals looking for job changes and promotions in HR and marketing,
then send congratulatory packages.
• We send out embroidered items with THEIR logo on them to get their attention and
soften them up before our call.
• We send promotional items quarterly to prospects and then follow up with a visit.
• We target organizations with large membership.
• We use promotional products as an incentive.
• We volunteer on a regular basis, targeting nonprofit organizations as well as committees
that plan community events, helping with their overall marketing plans.
• With some of our casino clients, we went through unconventional doors - such as HR and
safety - to eventually reach the marketing area.
• Word of mouth is our best - 95%.
• Yes, we always send out self promos along with our letter of intro. Most of the time they
are referrals from our existing clients.
14

Large Distributor Companies (Sales of more than a million)
• Concentrate on referrals.
• End-user party every other year; with an exhibit company. Each of us invites our best
clients so we market to the other company’s clients. Dual marketing with an exhibit
company; we have their exhibit in our store, and they have a display of our product.
• Licensed.
• Networking events, end-user shows.
• Rely heavily on word of mouth and referrals.
• Search engine optimization.
• See the people.
• We ask for referrals. When a company relocates or when a company places information
in the business section of the newspaper about promotions, etc., we send copy of the
article to the person, and let them know we are here for them.
• We concentrate on event planners in the industry.
• We employ both web marketing and traditional marketing.
• We look for industries that aren’t heavily marketed to by promotional products
distributors.
• We market at home shows, gift shows, county fairs and others.
• We service the heck out of our clients and ask for referrals.
• We try to work with any company organization or school of any size. We focus on being
“The” promotional advertising product distributor in our local communities.
• We use direct mail, trade show format and mainly referrals to increase our market share.
• Website and pay per click marketing.
• Word of mouth; direct mail within agencies.
• Yes. We hire salespeople from industries we target.
• Zip codes are targeted near key accounts using web-based search engines.
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In reviewing the responses, two ideas jumped out from the feedback we received. We think these
approaches are especially worth pondering and so they are highlighted along with our comments.
• We look for industries that aren’t heavily marketed to by promotional products
distributors. This is a very interesting approach, because most distributors seem to
go after the biggest companies. By seeking under-served niche markets, including
smaller fry, a distributor can boost business. The old saying that the catch is
generally better when competitors aren’t fishing in the same pond seems
applicable here.
• We hire salespeople from industries we target. This seems like another great idea
that may be a model for other distributors to look at.
How New Customers Are Acquired, What Works Best
For distributors large and small, the most commonly used methods of attracting new
customers are:
• referrals from existing customers, and
• networking
The next most popular for large distributors are
• websites
• membership in business/service organizations
• cold calls, and
• exhibits at trade shows and events where they are likely to find prospects.
For smaller companies, membership in business/service organizations is the third most
popular method, followed by websites and cold calls. Although less than half (42.4%) report they
exhibit at trade shows attended by end buyers, this is still an impressive number (see Table 7).
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One striking (but perhaps not surprising) difference between the two size cohorts is the
significantly greater variety of sales methods that larger firms employ. For example, the
percentages of big distributors holding membership in business/service organizations, hosting a
website, engaging in telemarketing, or conducting a direct mail campaign dwarfs the mom-andpops.
One southern distributor reported in a phone interview that “I’d like to do more, but we are
a small shop. I’ve only got so much time and energy, not to mention financial resources. So
instead of competing with the big boys, I focus more on what I already know I can do best.”
TABLE 7: MEDIA, METHODS FOR ACQUIRING NEW CUSTOMERS
Conventional Methods Small Companies
(Sales of a million
or less)
Large
Companies
(Sales of more
than a million)
Percent (N=103)
All
Companies*
Percent (n = 203)
Percent (N=315)
Cold calls 52.2% 67.0% 56.8%
Referrals from customers 98.0% 100.0% 98.7%
Networking 82.8% 89.3% 84.8%
Membership in
business/service
organizations
64.5% 76.7% 68.6%
Website 55.2% 77.7% 62.9%
Telemarketing 8.9% 18.4% 12.1%
Direct mail 34.5% 50.5% 40.0%
Direct response marketing
6.9% 13.6% 8.9%
other than direct mail
Trade-outs with other media 8.9% 13.6% 10.2%
Exhibit at trade
shows/events attended by
prospects
42.4% 60.2% 48.9%
Advertise in Yellow Pages 28.1% 45.6% 33.7%
Advertise in newspapers 5.4% 8.7% 6.3%
Advertise on radio 6.9% 2.9% 5.4%
Advertise in business or
Chamber of Commerce
publications
23.6% 24.3% 24.1%
PR/publicity 16.3% 23.3% 19.0%
Sponsorship of sports
teams, community and
cultural events
29.6% 39.8% 32.4%
Non-promotional
presentations (webinars,
talks to trade groups etc.)
16.3% 18.4% 16.5%
*All Companies include those which did not specify size by sales
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The statistics reported here also indicate the promotional products industry probably
underestimates the amount of cold calling being done. A reading of the trade literature contains
many reports that say cold calls are largely a thing of the past – but in reality actions speak
differently. The cold call is not only one customer acquisition option, it actually remains a
common practice. For some sales staff when orders are slow or there is down time, the cold call
can be effective in reaching out to new clients. Keep in mind that, regardless of which sales
method is most efficient, it is usually not the distributors that call the shots. Independent
contractors operate according to their own preferences.
Importance of Referrals
The Beatles used to sing about getting along with a little help from their friends. But
even their guru could not have come up with a better distributor new-customer mantra than
“Referrals! Referrals! Referrals!”
This is a key topic. But a question that arises is “how do distributors actually get
referrals” In looking at the complete range of comments, it is clear that this process is no
passive activity – many actively seek new customers by encouraging existing clients to tell
others about their promotional products experience. Especially interesting were the following
approaches:
• We have a referral program that rewards both parties; where current buyer refers
their peers. This seems like common sense, but not everybody does this.
Generally it is easier to get someone to do something for you if they directly
benefit.
• We leverage reference selling and use this to expand our customer base. Every
customer is asked to refer us to the next. One principle of fundraising is that you
have to ask for the money. The same holds true here. Making an effort to
encourage your current customers to tell others about your role in their success
can pay big dividends.
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• End-user party every other year; with an exhibit company. Each of us invites our
best clients so we market to the other company’s clients. Dual marketing with an
exhibit company; we have their exhibit in our store, and they have a display of
our product. The principle “seek and ye shall find” holds true here. More
interlinked opportunities such as this exist if you take the time to cultivate such
“win-win” events.
Lead Sharing
The supplier survey provided some good news for distributors. Most suppliers claim they
don’t sell direct. And of those that do, many say they will pay a commission to the distributor.
Unfortunately, we are not aware of any earlier published data that might show the direction that
direct sales is moving, so this remains a point of possible contention.
Many suppliers now share their leads with distributors. But increased partnering very
likely will also bring suppliers face to face with the distributor’s customer. In the old days, that
would be like a rock star sneaking into the sultan’s harem. But today we see supplier
representatives—head office execs and field—accompanying distributors on client calls,
participating in conference calls—just one big team.
Familiarity with end buyers is also achieved when suppliers exhibit at end-buyer shows,
then share whatever leads are gained with distributors. To do this, says the CEO of a supplier
that exhibits at venues like the Motivation Show and the Point-of-Purchase Advertising Institute
and National Restaurant Association expositions, you need to have a plan. Otherwise you’re
likely to get distributor gripes rather than praise: You’re selling direct! Or, So where are the
leads you’re supposed to be sending me
This supplier’s plan for lead sharing entails three criteria:
1) Minimum annual purchases of $25,000 with the supplier
2) Open credit
19

3) Distributor understanding of the incentive market. (“If you get an order for
a self-liquidator and the distributor…doesn’t know what a self-liquidator
is, you just wasted a lot of money.”
The end-buyer strategy has worked well with this supplier and many of its distributors.
Says the CEO, “We’ve made some distributors a lot of money from leads they would normally
not have received.”
“End-in-mind selling” is what an apparel supplier calls its strategy to pull distributors in
by marketing to end buyers. Focusing on specific industries, this supplier has plenty of range,
what with a product line having universal appeal. If the industry choice is, say, automobiles, the
supplier produces logos of every car maker from Audi to Volvo, then promotes to the dealers.
Contact your distributor, the appeal goes, and if you don’t have one, we’ll find a capable
distributor for you. With all the logos in stock, the distributor is freed of set-up charges.
Pull strategies such as lead sharing rely on distributor discipline. Suppliers are savvy
enough to give leads to distributors who are willing to run with the ball. Failure to follow up is a
costly wheel spinner. Distributors have to deliver or they will lose those leads – after all,
suppliers are not going to waste them. A supplier that learned that lesson now counters with a
letter of agreement requiring distributors to commit to a specific level of responsiveness.
After assigning leads to salespeople, one big distributor (over $10 million) has someone
checking with the lead to make sure a salesperson has called, has met the lead’s requirements
and has answered all questions. Another distributor we spoke to encourages salespeople to
follow up on leads through incentives and contests (offered about once a quarter).
Bottom line in terms of distributor-supplier relationships is that they are in flux, along
with every other business model. The curse of interesting times is here – along with the promise
of profits amidst the perils.
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Other New-Customer Acquisition Methods
Realism for many smaller distributors means restricting their main—but not total—
marketing communication to targets closer to home. In addition to checking off all the
conventional new-customer-acquisition methods they employ, distributors were also encouraged
to list methods they think are unique, unconventional or not listed. (See below.) Again, most
contributions were more familiar than unique. But some are worth noting.
Customer Acquisition Methods—Unique, Unconventional, Other (as Stated in
Open-Ended Responses)
Small Companies (Sales of a million or less)
• Advertise in school sports programs and yearbooks.
• E-mail marketing with educational tips featuring creative use of promotional products.
• E-mailed newsletter sent every 2-3 months or so.
• Exceptional follow-up after our first contact.
• Government directory (by invitation).
• Growing existing client relationships within the same organization.
• In-store events.
• Large party - 2000 guests.
• Place ads in customer produced publications directed at our target member/ customer.
• Service work and committee work and donations to non-profits.
• Using promotional products to show their effectiveness.
• Warm calls after a multiple direct mail campaign to a specific person or group.
• We send e-mail blasts that feature a very nice promo item and a link to our website.
21

Large Companies (Sales of more than a million)
• Billboards.
• Cross-over customers from other sides of our company’s business.
• Customer show - Salespeople can invite prospects as well as bona fide customers.
• E-mail.
• E-mail marketing.
• E-mail postcards.
• Networking.
• Self-promotional products trade show.
• We do small, multiple (50 or less recipients - 2 to 3 mailings to same recipients) targeted
mailings to a specific industry that include a promotional product in each mailing.
• We have a business development manager who targets specific verticals.
E-mail marketing especially seems to be growing in popularity, a tool that can applied
effectively irrespective of company size. Comparatively easy to track are e-mail promotions,
especially when specials are offered. More distributors, particularly the big ones, now count
clicks per day, cost per hit, and use the information to tweak wording and message.
Worth noting is that distributors don’t use other media much to tout promotional
products, with some exceptions. Many report they still use the Yellow Pages despite the fact that
we often hear they don’t get much business from it. Perhaps this is more a defensive strategy.
Also of interest is the reference to using billboards. Despite promotional products being
primarily a B-2-B industry, outdoor advertising is one very big visual way to get a company’s
name and products out before targeted drivers (say, those going to a business park).
Among such a variety of methods, some have got to work better than others. So
distributors were asked a) to identify the top three methods in terms of effectiveness and b) the
22

portion of their budget they allocate to those methods. Not surprisingly, based on earlier
comments, the 1-2-3 rankings for small distributors and large firms were the same: referrals from
customers dominate, followed by networking, with cold calls in the mix but a distant third (see
Tables 8, 9, 10, and 11). No doubt about it. Referrals get the most budget and are the most
effective generator for bringing in newbies.
Viral marketing, getting someone else to tout your firm, is one approach to attracting
additional clients. “We operate in a state capitol,” says one major distributor. “Much of our
business is with state agencies and state trade associations. Word of mouth continues to be
important for us.”
TABLE 8: MOST EFFECTIVE METHODS TO ACQUIRE NEW CUSTOMERS
(SMALL COMPANIES – SALES OF $1.0 MILLION OR LESS)
Rank Methods Percent
1 Referrals from customers 86.38%
2 Networking 67.77%
3 Cold calls 33.25%
TABLE 9: MOST EFFECTIVE METHODS TO ACQUIRE NEW CUSTOMERS
(LARGE COMPANIES – SALES OF MORE THAN $1.0 MILLION)
Rank Method Percent
1 Referrals from customers 91.99%
2 Networking 57.67%
3 Cold calls 28.94%
TABLE 10: BUDGETS FOR MOST EFFECTIVE METHODS
(SMALL COMPANIES – SALES OF $1.0 MILLION OR LESS)
Budget
Allocation
Referrals
(n = 127)
Networking
(n = 91)
Cold Calls
(n = 39)
Less than 10% 33.9% 27.8% 46.2%
11 – 20% 17.3% 27.8% 25.6%
21 – 30% 10.2% 20.8% 20.5%
More than 30% 38.6% 23.6% 7.7%
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TABLE 11: BUDGET FOR MOST EFFECTIVE METHODS
(LARGE COMPANIES – SALES OF MORE THAN $1.0 MILLION)
Budget
Allocation
Referrals
(n = 68)
Networking
(n = 39)
Cold Calls
(n = 15)
Less than 10% 47.0% 44.1% 46.7%
11 – 20% 13.6% 23.5% 26.7%
21 – 30% 12.1% 23.5% 13.3%
More than 30% 27.3% 08.8% 13.3%
Qualifying Leads
One big distributor firm’s management (over $10 million annually) uses common sense in
qualifying leads. According to the woman principal, “We look to the potential volume of sales and
their business model (do they value the same things we do). Basically, what we’re looking for is a
customer-intimate type of a company. If they are seeking to buy promotional items strictly as a
commodity-based or price-based decision, then that’s something that we would steer away from.”
Another mid-range distributor ($1-2.5 million) is less aggressive in seeking leads and
doesn’t do cold calls. But if a prospect calls, “I say, send us info on who they are, billing/mailing
address, do they work on purchase orders, how do I do business with you so I get paid easily I’m
more concerned if we’re going to get paid than if they’re qualified to buy.”
Distributors and Website Marketing
Many distributors indicate they have a website. But in the Annual Estimate of Distributor
Sales published by PPAI earlier in 2006, few distributors reported they get much business from
those sites. As in anything, some do website marketing more aggressively than others.
One big distributor (over $10 million) uses their website from everything from e-commerce
to inventory management. “We try to keep track of materials that are in our hands” and make the
site user-friendly. For example, he says, “we provide them (customers) with inventory management
reports, trend analysis, and order frequency.” Another distributor does pop-up surveys at customer’s
online stores. This refers to large-volume customers who operate company stores, big business for
24

many in the promotional products industry. These are on-premises stores that sell merchandise with
the company’s logo to the firm’s employees.
Among the few distributors effectively operating an innovative online presence after the
dot.com debacle is one owner who says her firm is primarily a web-based distributor. She’s been in
business for six years. To be a successful web distributor, she says you need a “knowledge base,”
which is to say, you need to know how to drive customers to your site. She says having a presence
on the web, like most distributors, and having a business on the web are two different things. Her
experience indicates you better have the right key search words (like “promotional products”) for
your site; if you’re not in the first search page, you’re not in the game.
Another way she differs from most distributors with a URL in that her company’s website is
very interactive, with features that give customers advice and answers their questions. (Usually, and
unfortunately, distributors just throw a bunch of products from the catalogs on the screen with price
info and that’s it.) She also cross-markets: In her column in a big city business journal, she
publishes the questions and the answers.
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V. Customer Retention
Methods That Keep Them Coming Back
Maintaining contact with customers is the key marketing essential for distributors. In a list
of 6 conventional benefit methods to retain existing accounts or to increase buying activities,
keeping in touch is by far the one most frequently mentioned by small and large distributors (see
Table 12). Small and large distributors rank rewarding their customers for loyalty by granting
privileges and incentives as second and acknowledging customer achievements third.
TABLE 12: METHODS TO RETAIN CUSTOMERS, INCREASE BUYING
Conventional Methods
Frequent communication with
customers, in person or
otherwise
Demonstrate empathy by
acknowledging customers’
achievements unrelated to their
business relationships with us
(e.g., honors, milestones)
Demonstrate our company’s
capabilities by presenting case
histories and examples
Demonstrate empathy by
providing customers with nonpromotional
products information
helpful to their general
marketing/promotion efforts
Emphasize, in our
communication with customers,
the professionalism of our
employees as indicated by their
educational credentials such as
CAS or MAS
Reward customers for their
patronage by granting privileges,
recognition or providing
incentives, including price deals
*All Companies include those which did not specify size by sales
Small Companies
(Sales of a million
or less)
Percent (n = 197)
Large
Companies
(Sales of more
than a million)
Percent (N=102)
All Companies*
Percent (N=308)
95.4% 100% 97.1%
43.1% 52.0% 47.1%
30.5% 49.0% 37.3%
40.6% 30.4% 37.0%
19.8% 21.6% 20.8%
56.9% 62.7% 59.4%
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In addition to typical benefit approaches, distributors were asked to identify unconventional,
unique or other methods they use to retain accounts and increase buying activity. Sampling
programs are very popular. Another often-used approach involves creating awards which recognize
promotional products purchasers who contribute to community service. So is the willingness to be
involved in the lives of their clients by participating in events meaningful to the customer and
community. “Thank you” contacts (including something as simple as a balloon and small
recognition gift) seem to work well for many distributors. Incorporating promotional products in an
exciting way for customer and potential customer “leave behinds” has the advantage of clearly
demonstrating a distributor’s capabilities and creativity (see Chart C).
Benefit Methods--Unconventional, Unique, Other (as Stated in Open-Ended
Responses)
Small Companies (Sales of a million or less)
• Christmas gifts to all accounts over $5000 in purchase. Gifts usually average $50 each.
• Contribute strategic ideas to help the company meet their objectives.
• Day of golf with PGA professionals.
• Educational newsletter.
• Gifts with logos.
• Goodwill with donations / in-kind service to their charities.
• Hand out a lot of self promotion specialty items.
• Holiday gifts, promotional product as gifts included in direct mail - i.e., a pizza slicer with a
promo suggestion “Any way you slice it, you should be doing business with TSH.
• I keep up with local newspapers, chamber publications etc. to see where my clients might be
mentioned, then send them the article along with a congratulatory hand-written note. Also if
a product that has been e-mailed to me sounds like a great idea for my client.
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• If they buy quantity X from us initially, they can come back next week and get one more,
three more, whatever they need at the same price (no higher price because of lower
quantity).
• Knowing personal details about customers. Asking about their children, school, spouses. We
partner in the community with and become business friends with our good customers.
• Many times provide spec samples for items that they may have an interest in as ones we
think could really help their business. On occasion we will do lunch, sports tickets, etc.
• Not unique - but tremendous use of self-promotional items.
• Participate in THEIR company sponsored community projects with them (JA, charity walks,
fundraisers, etc.)
• Personalized e-mail “blasts” to customers in good standing include special offers just for
them.
• Present once a year a PPE Award of achievement to end-user that best exemplifies
contribution to the industry and the community in general.
• Regularly provide them with distributor promotional items - often-times leads to them
ordering the identical product for themselves.
• Return quote request in 24 hours or less; virtual proofs e-mailed with every request or order;
resolve issues immediately, we will pay for their mistakes; send sample ideas as they come
in, we don’t wait for meeting.
• Service, service, service.
• Source products from outside PPAI norms that client needs or should be using.
• Spontaneous and random acts of kindness.
• Take customer to lunch each day. Get to know this person’s nature.
• Very quick response to e-mails and messages.
• We acknowledge our client’s birthday and usually send a gift or flowers 3-4 days before
event.
• We believe in the “servant spirit” approach. We want to make a real difference in people’s
lives...not just make a sale. We send uplifting e-mails and get personally involved in their
lives.
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• We use the products that we sell - self promotion - Most self promos result in orders from
clients - if chosen wisely.
• When meeting new prospects, we bring a custom-designed travel mug in a custom box that
also holds gourmet coffee, biscotti biscuits and our capabilities brochure.
Large Companies (Sales of more than a million)
• Annual self-promotional products tradeshow, self-promo includes 3 direct mail pieces, 2 of
which are dimensional in nature, integrating print and promotion.
• End-user party: Snowflakes in the Summertime (in July). Deliver balloon bouquets of Mylar
and latex balloons for Halloween and Valentine cakes decorated with purple hearts (our
color). Balloons are gel-treated and last for two weeks. Clients love balloons.
• Hold an annual customer appreciation show.
• In-house table top trade shows.
• Large accounts receive President’s award.
• Referral gifts and personalized thank you notes for orders.
• Self promo.
• Spec samples, random samples, e-mail with product ideas.
• Thank you gifts, charitable donations under our customers’ name, referral program, contests,
special offers.
• The use of holiday gifts specifically targeted to individual clients has worked very well. We
market the fact that we are going to Las Vegas for our customers. This creates a buzz of
excitement.
• We are dedicated to providing excellent service, competitive pricing and quality products.
We live by this dedication and it works.
• We award points as an incentive and customers can cash in every quarter and buy out of a
gift catalog.
• We deliver on time, go up and beyond customer expectations, never miss a use date.
• We have a buyer’s club reward program. We have a top secret box program quarterly to our
top 250 clients.
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• We have a formal customer communication program including direct mail, e-mail, and three
dimensional mailings.
• We have a frequent buyer program which offers incentives / gifts to buyers to encourage
them to buy more frequently and with more volume.
• We have a referral program where customers are rewarded for referrals that turn into orders.
• We have several large clients that have conventions that we provide goods and awards for.
We attend their convention and help with presentation of awards, etc.
Of these various methods for promoting distributor retention and increasing their buying
activity, distributors were asked to identify the three they considered to be the most important or
indispensable to their firm. Again distributors, irrespective of size, agreed on what works best (see
Tables 13 and 14).
TABLE 13: MOST IMPORTANT RETENTION METHODS (SMALL COMPANIES –
SALES OF $1.0 MILLION OR LESS)
Rank Methods Percent
1 Sales calls 56.17%
2 Appreciation gifts (holiday, birthdays, other) 49.44%
3 Sampling program 28.98%
TABLE 14: MOST IMPORTANT RETENTION METHODS (LARGE COMPANIES –
SALES OF MORE THAN $1.0 MILLION)
Rank Methods Percent
1 Sales calls 71.22%
2 Appreciation gifts (holiday, birthdays, other) 46.77%
3 Sampling program 29.24%
One distributor we spoke to in depth indicates she regularly utilizes thank-you gifts and
charitable donations made in their customers’ names. “Right now we have a program where we
send our top customers a thank-you gift.” But, she says, some companies have policies against
employees receiving gifts (such policies are, of course, quite common in corporate America as a
result of more stringent ethics codes.) So her company notifies customers that it is donating a gift to
a charity of their choice.
30

Another method her firm employs involves creating a buyers club rewards program.
Customers sign up and accrue points as in any rewards program. Once they reach various levels,
they may redeem their points for different products, some with the distributor’s imprint on it and
others (like pricey Movado watches) without. Customers tend to build points over time, rather than
redeem them for the cheapie water bottles etc. That’s good, she says, because it takes more orders to
accumulate points, which is the idea for retention.
For her top 250 clients, she also utilizes a “top secret” box. The clients don’t know what’s in
the box, but it isn’t junk stuff. Dispensed quarterly, each issue of the box has a different theme
relating to the promotional items inside and how to use them in a campaign. She says she likes to
market her firm by using the industry’s products, which is what she’s doing in the buyers club and
the “top secret” box promotions.
Another smaller distributor gives Christmas presents to all accounts that spend at least
$5,000. These gifts usually average about $50. So, demonstrating appreciation for business is
effective for him, and he confirms that customers like the recognition.
What’s a Customer Worth Customer Relationship Management and
Lifetime Value
Talking with distributors and suppliers, we asked what, if anything, they did in terms of
customer relationship management (CRM). The conclusion: Some do something, others virtually
nothing.
CRM systems, or what passes for them, range from somewhere between sophisticated
software programs to the abacus. At the most basic level, distributors attempt to find out where their
leads are coming from. Not very advanced or comprehensive, admits one south-central distributor
with a four-person sales force. “It’s not rocket science,” she says.
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To most distributors that engage in this most important marketing process, CRM is a contact
management system such as ACT or ASI software. It is used to update customer files, document
whatever contact has been made with customers, what was ordered and when.
We asked distributors if they “systematically attempt to measure a customer’s Lifetime
Value” to the company. Only a minority (25.2 percent of small distributors, 32.4 percent of large
companies) of the respondents to the mail survey reported their companies employ a means of
predicting the revenue stream from a specific customer over a period of time. However, after
interviewing respondents, we quickly determined that these statistics are not reliable. Apparently
many marketers in this industry have misconceptions of what constitutes Customer Lifetime Value
(CLV).
Most businesses today that are serious about measuring CLV use regression-type models
requiring inputs of a customer’s “RFM” characteristics. That is, recency (time of most recent
purchase), frequency (number of past purchases), monetary value (average purchase amount per
transaction). For the minority of distributors that systematically attempt to measure customer value
over time, the outputs present a variety of useful data on predictive buying behavior: Who buys
When Which products What incentives or appeals do they respond to Who should we be wary
of Over a given time, how much revenue can we expect from a specific customer
On occasion there will be a sobering discovery. “I’ve only just begun to evaluate our
customer base along these lines,” says one distributor in Southern California. “Some of the accounts
are especially significant to cash flow. Others have been regular purchasers but are smaller. Big or
small, we’ve always prided ourselves on service and going the extra mile. But as I cost out what is
actually going into our pockets at the end of the day, I’m starting to reconsider whether or not we
are really making money on several of them.”
Of course, monitoring CLV takes time and effort. Another way to look at the issue is from
the perspective of your suppliers and how they relate to YOU. Although few marketers in any
industry will dispute the value of CLV data, even some promotional products suppliers perceive it
as being out of their reach. Distributors whose business is primarily end-buyer driven may order
32

once and never again if their client wants to try something else. Explains one supplier: “Distributors
respond to their (end-buyers’) call and do not use our products otherwise.” Distributors may see a
similarity when they look down the business chain to their customers.
Measuring Customer Satisfaction
As every supplier knows, distributors have opinions about their experience with their
product providers and often are eager to express them. In the “letters” page of Promotional
Products Business and other industry publications, we’re apt to find a chorus of praises lavished by
distributors on suppliers who have gone above and beyond. Less flattering opinions are saved for
more private audiences.
When suppliers—and it is usually the larger firms—do investigate their standing with
distributors, they tend to conduct distributor surveys internally rather than engage an outside CS
researcher. Typically they will phone their distributor contact after the order ships and ask if the
transaction meets their specifications. Others go a step further. With a full-time employee assigned
to survey customers, one wearables supplier obtains an annual benchmark showing where the
company is and where it needs to go in meeting customer expectations.
That’s a good idea but perhaps not practical for most distributors. How many can afford to
have an employee devoted to monitoring customer satisfaction So how do distributors go about
establishing a credible set of analytics
Generally, distributors seem curious, but few have a formal mechanism for documenting
their performance in the eyes of their customers. Some distributors report conducting satisfaction
surveys at their customer’s trade shows. One distributor we spoke with uses her booth to execute
surveys there. Others contact top customers to assess performance and how to improve service.
Many firms, however, identify with one distributor who admits to relying on hearsay and
informal customer contact. Although comprehensive assessment of customer satisfaction is not
33

prevalent in the promotional products industry, many – and perhaps most – recognize the value and
would like to do more. In some cases, it’s not for lack of trying – a problem evidenced by both
suppliers and distributors. To secure response to its survey, one supplier offered free custom art.
Few distributors responded. Explained the owner, “They said they liked the offer but didn’t have the
time.”
A Look at Churn
“One of things I hate most is when you knock yourself out for a customer and you end up
losing them.” This observation by one distributor executive from the northeast reflects the fact that,
no matter what you do, you are going to lose a few. Some businesses simply fail. Others are bought
out by people who want to use a different distributor they are familiar with. Buyers come and go,
and sometimes the newcomers dismiss loyalty as an attribute of no real consequence.
To address this issue, we asked distributors to estimate their churn. Based on their past
experience, what percentage of their current customers would they expect to have as active accounts
five years from now
Among small distributors, almost a third estimated they would hang onto 61-80 percent of
their customers. Almost that many said they would retain 81-100 percent. In other words, 63.1
percent of respondents representing small companies saw five-year retention in every ten current
customers to be somewhere between six and ten. That is high!
One small distributor with seven salespeople (independent contractors, located in other
states) concurs, saying these numbers reflect his retention rate. But, he considers only “regular”
customers—those having been with him 10 years.
Respondents representing large distributors were even more optimistic in their forecasting.
The largest cohort—39.2 percent—saw stickiness in the top 81-100 percent range. The next most
populous group, representing 38.2 percent of the reporting distributors, estimated retention in the
61-80 percent range (see Table 15).
34

Why the difference The deeper pockets that larger companies possess Their ability to offer
more incentives and provide greater service capabilities are likely contributors. There may be other
reasons as well.
TABLE 15: ESTIMATED CUSTOMER RETENTION OVER FIVE YEARS
Retention Rate Small Companies
(Sales of a million
or less)
Large Companies
(Sales of more than
a million)
All Companies*
Percent (n = 203) Percent (N=102) Percent (N=312)
Less than 20% 3.0% (n = 6) --- 1.9% (n = 6)
21 – 40% 9.5% (n = 19) 4.9% (n = 5) 8.0% (n = 25)
41 – 60% 24.4% (n = 49) 17.6% (n = 18) 21.5% (n = 67)
61 – 80% 32.8% (n = 66) 38.2% (n = 39) 34.9% (n = 109)
81 – 100% 30.3% (n = 61) 39.2% (n = 40) 33.7% (n = 105)
*All Companies include those that did not specify size by sales
Another assessment we thought useful is the estimated churn by distributor type. Crosstabulated
response to that question (see Table 16) indicates the added-value distributors—the group
that provides clients with concepts for using the products they purchase—to have the highest
customer retention rate over a five-year period. A little over three-fourths (76.6 percent) of that
cohort estimated account retention in the 61-100 percent range. Next was the group of distributors
describing themselves as product driven (67.4 percent), followed by the program-driven segment
(54.8 percent).
TABLE 16: 5-YEAR RETENTION RATE BY DISTRIBUTOR TYPE
Retention Rate Product Driven Program Driven Concept Driven
Less than 20% 2.2% 0.0% 2.5%
21 – 40% 8.2% 9.5% 7.4%
41 – 60% 22.3% 35.7% 13.6%
61 – 80% 35.3% 26.2% 38.3%
81 – 100% 32.1% 28.6% 38.3%
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VI. Out in the Field: The Distributor Sales Force
What about the distributor sales force In this case, bigger means more. Overwhelmingly
(91.5 percent) of those firms doing less than $1 million in sales are staffed by three or fewer
salespeople (including the owner). In the million-dollar-plus club, almost two-thirds (62.1 percent)
work in sales groups of four or more (see Table 17).
TABLE 17: TYPE OF SALES FORCE, INDEPENDENT CONTRACTORS INCLUDED
Small Companies
(Sales of a million
or less)
Large Companies
(Sales of more than
a million)
All Companies*
Fewer than four fulltime
salespeople
(including owner)
Four or more
salespeople
(including owner)
Percent (n = 199) Percent (N=103) Percent (N=308)
91.5% (n = 182) 37.9% (n = 39) 73.4% (n = 226)
8.5% (n = 17) 62.1% (n = 64) 26.6% (n = 82)
*All Companies include those which did not specify size by sales
Since the industry’s inception, independent contractors have done much of the soldiering in
the field for distributors. Obviously, this arrangement has been advantageous for distributors, but it
doesn’t come without aggravation. Observes a small western distributor, “Many are interested in
selling but don’t have a clue or only want to make calls when they’re in the mood.”
Sales Training
Training is almost routine for the men and women engaged in selling. American business
invests about $51 billion each year in formal sales training, and it tends to be an ongoing activity.
So, how do promotional products distributors spend their share of the $51 billion Providing
a list of customary training methods, we asked distributors to identify all that applied to help their
salespeople become more effective in bringing in new business and retaining current customers.
Table 18 depicts the ranking of practices reported by both groups. For both small and large
36

distributors, the most frequently cited practice was on-the-job training, including mentoring by
experienced salespeople. Smaller companies tended to also rely on training literature/videos and
industry seminars. Larger firms had a secondary preference for internal sales training.
TABLE 18: SALES TRAINING METHODS
Small Large All
Companies Companies Companies*
Training Methods
Small
Companies
(Sales of a
million or less)
Large
Companies
(Sales of more
than a million)
All
Companies*
Percent (n = 16) Percent (N=60) Percent (N=77)
Sales training literature/videos obtained 50.0% (n = 8) 53.3% (n = 32) 51.9% (n = 40)
from PPAI, suppliers, and other sources
Internal sales training sessions 43.8% (n = 7) 78.3% (n = 47) 71.4% (n = 55)
Sales training seminars sponsored by 50.0% (n = 8) 50.0% (n = 30) 49.4% (n = 38)
PPAI or other industry organizations
Sales training seminars conducted by 12.5% (n = 2) 35.0% (n = 21) 29.9% (n = 23)
organizations outside the industry
On-the-job training, including mentoring 88.7% (n = 14) 88.3% (n = 53) 88.3% (n = 68)
by experienced salespeople
Other (please describe) 18.8% (n = 3) 13.3% (n = 8) 14.3% (n = 11)
*All Companies include those which did not specify size by sales
The “other” responses can be discounted in that they largely fall into the listed basic
categories.
And which of the four methods work best We asked distributors, and their response
confirmed that “most prevalent practices” and “best” are synonymous (see Table 19).
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TABLE 19: BEST TWO SALES TRAINING METHODS – CUMULATIVE SCORES
Sales Training Methods
Small
Companies
(Sales of a
million or less)
Large
Companies
(Sales of more
than a million)
All Companies*
On-the-job training, including
mentoring by experienced
salespeople
Percent
Percent
Percent
81.12% 80.12% 80.77%
Internal training sessions 33.57%* 52.19% 49.32%
NOTE: * For small companies, this tied with “Sales training seminars sponsored by PPAI or other
industry organizations **All Companies include those which did not specify size by sales
As the quantitative data in the tables show, distributors tend to rely more on in-house
resources to train their salespeople.
Although distributors gave us their estimates of what they think their most effective training
practices are, we don’t know what formal efforts, if any, are made to measure and document
effectiveness. Actually, if one is to believe sales training consultants, measuring training against
ROI is a piece of cake. Take an objective, say, lead generation, and compare pre - and post-training
performance.
In most industries, sales training is a continuing process. It never stops. Nor can marketers
allow training to languish, given the short shelf life of performance peaks. In one consultant’s
published estimate, in nine out of ten companies, productivity gains from sales training evaporate
within 120 days.
What worked in the past may no longer be effective as “future shock” continues to influence
the economy. Changing demographics is forcing some to get out of their comfort zone – another
reason to be open to new ideas and approaches. One long-time industry distributor from the
intermountain west has this to say: “I tell young people entering the distributor business to learn
sales, learn service, and learn Spanish.”
No wonder continuing education and practical sales seminars remain popular. Hopefully, the
38

level of training is adequate, since customers are the life blood of the distributor business. In a
“service economy” those who practice what they preach will be in the best shape.
39

VII. Analysis and Recommendations
A look at an impressive array of practices—from trade show exhibiting to websites to
discounts and other incentives—that distributors use to draw and keep customers indicates a strong
focus on promotion. Well and good, but promotion is only one of the four Ps in marketing.
Direction seems like an appropriate starting point for an assessment of industry marketing
status. Direction—as in we know where we’re going. And do promotional products distributors
know
The assumption that all or most distributors do seems shaky in view of the fact that so many
firms start the year off without so much as a written marketing plan. If they finish up the year where
they want to be, who can say that it is not purely by accident
After our conversations with those in distributor and supplier management, we do not see a
situation of self-delusion. A recurring theme we hear is we’re not doing this, but we should.
An obstacle to converting should to do seems to be an overabundance of short-term
thinking. Distributors are busy, fixated on getting the next order. Admits one distributor principal
from the Gulf Coast, “Our firm is doing gangbusters. Who has time to worry about two or three
years out”
And there is room for improvement. One supplier marketer was critical of the level of
communication and innovation by distributors. She observes: “A lot of distributors don’t do a lot of
thinking outside the box. They don’t care about message, they don’t care about usage. They just
want to get the order”. That is not a put-down but rather a statement of how relentless preoccupation
with today’s order comes at the expense of future opportunities. Adds a distributor, “Price-focused
distributors could do more for potential buyers. Instead of a $500 or $1,000 order, they may be
shortchanging themselves and their clients if they don’t demonstrate conceptually how promotional
products can be applied successfully on a bigger stage.”
40

That opinion is supported by our findings on customer retention. The lowest customer churn
(conversely, highest retention rate) was found to be among those distributors describing their
business model as concept driven.
each.
There are several key areas deserving examination, and we will share our observations on
Technology
In a recent issue of Promotional Products Business, a writer who grew up in the industry
observed that “the promotional products industry seems to move toward e-commerce at a snail’s
pace. Critics say it lags behind mainstream technology trends by as much as a decade.”
Because of the wealth of their resources, large distributors are better positioned to invest in
systems to extract from IT a lot of electronic assistance. After all, technology has been applied
advantageously to accounting and elsewhere. Although more limited in what they may be able to
do, even smaller distributors have found it possible to expand or extend their reach to customers
through online circulation of newsletters. PPAI’s collaboration with “SmartBlasts” can also work
for distributors interested in setting up a dynamic direct contact program. Yes, they may pay
someone to do it for them, but they don’t have the investment in payroll.
Certainly the online world is not just for the most affluent. Many service-oriented small
businesses in a variety of markets are finding internet commerce profitable. Compare this to the
promotional products industry in which 99 percent of suppliers have a website, but far fewer
distributors do. Clearly, distributors (especially firms with few employees) are later adopters of this
new technology. In fact, our 2005 Distributor Sales Survey conducted for PPAI reported a slug-like
pace for online sales by smaller distributors. This group ascribed just 10.4 percent of their 2005
business to their websites, about a half percentage point ahead of 2004. Although many smaller
distributors have websites, they tend not to be regarded as sales generators, but simply as an
electronic catalog.
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As more tech-savvy young people enter the industry, this is bound to change. “Better
content, more interactive technology, and greater promotion of their websites would bring new
business to others like me in the industry,” says one northeastern distributor who has seen an up-tick
in sales directly linked to enhanced web marketing.
Information
Distributors appear to be active consumers of information. Typically, it is information on
how to sell and what to sell. That’s what sales seminars are for. As a source of information, research
to many distributors and their salespeople means poring over product catalogs and online services to
meet a customer’s specifications. Some distributors assign people to perform that task. Product
research is essential to almost all distributor operations. But it should not be confused with
marketing.
However, there is a substantial supply of research data available to help distributors
convince prospects that promotional products work and that they—the distributors—have the
capability to execute. Much of that data is collected and published by PPAI and other sources such
as the Incentive Marketing Association and the People Performance Research Institute at
Northwestern University.
From what we have been able to ascertain, much of the information available to distributors
is being underutilized.
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Confirming Customer Satisfaction
Figuring out whether or not distributors’ customer expectations are being met seems to be
more intuitive than scientifically exact. This is not encouraging. If there is a price to be paid for
failing to get genuine customer feedback, that knowledge may come too late for a distributor to act
upon effectively.
Most distributors that really attempt to measure their standing with customers reply on inhouse
efforts to solicit feedback on attitudes. Subject to some limitations, that can work. One
limitation is that, since the distributor is usually identifiable to the customer, distributor
management may hear only what the respondent thinks they want to hear (“the halo effect”).
Old-fashioned as it may seem, the telephone is still effective for distributors wishing to
reach out personally to their clients. Your fingers can still do the walking.
Still, internal surveys can yield valuable information. Many distributors can take a page out
of one supplier’s playbook. A midwest supplier shared with us the firm’s 11-question survey that it
circulates electronically to customers and non-customers. Included is a key question: How does
_____ compare to our competitors Better. Same. Inferior.
Low response rates may discourage, but even without attaining the standard statistical
margin of error, it is possible to obtain a glimpse of customer attitudes you may need to deal with.
Customer satisfaction research has gotten to be a complicated science, perhaps needlessly
so. Quite the rage at the moment is a concept called Net Promoter Score (NPS) espoused by the
doyen of loyalty research, Frederick Reichheld. According to the NPS principle, of all the questions
you can ask a customer, the best predictor of behavior toward your firm is this: “How likely is it
that you would recommend (Company X) to a friend or colleague”
Oh, and in terms of predictive behavior, there is a worst question, too. “How satisfied are
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you with Company X’s performance”
Seeking the New
We’ve noted the importance of product as lifeblood to distributors and their suppliers.
Product is part of the industry’s name and much of its game.
Suppliers know what distributors want. It’s just that they sometimes have a hard time giving
it to them. Most new promotional products are adapted from introductions from the rest of the
commercial sector. Few producers do their own real design and engineering. One reason is that
while many clamor for “NEW” products with buzz, most suppliers aren’t prepared to take on the
expense or risk associated with something unproven. Finding, let alone creating new products, is a
risky business—often expensive from conception to actual appearance in the marketplace.
Some suppliers will accept that challenge, however, because they believe original products
will win them distributors and be worth the risk. Interesting proprietary products are coming
primarily from those suppliers with their own R&D departments. Innovation provides a marketing
edge, including how distributors as well as suppliers define and present their most important
product – their reputation.
Some distributors we interviewed were asked, “Are you more likely to be attracted to
suppliers who have a reputation for bringing out new products—that is, stuff not seen in the
industry before” One respondent sums up the views of many: “I would say we actually pay more
attention to someone who actually has something new. That is a frustration of ours—that some of
our suppliers say they have something new but it’s not really new. We do pay attention to those
(suppliers) that have brand new items.”
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Competition
Distributors say competition for customers is tough. Of course, that is what is said in most
other industries, too. In the case of the promotional products industry, distributors are right.
If there is a company in promotional products that doesn’t claim great service, we haven’t
heard of it. If great service is the rule rather than the exception, it suffers the fate of a commodity or
at least becomes merely a prerequisite to staying alive in business. Fortunately, the fairly impressive
customer retention rates seen earlier in this report indicate that many distributors are delivering on
their service claims.
As our research indicates, larger distributors estimate higher customer-retention rates than
smaller companies do. We reason that the greater resources of larger distributors give them more
tools for customer adhesion than smaller firms could muster. But irrespective of size, one
watchword is adaptability. Distributors’ live in a world of special requests.
In business-to-business marketing, branding offers advantages that firms marketing to
consumers enjoy. End-buyers often know where to find brands they trust if that brand has perceived
value. They know which brands mean price, which ones assure reliability. This applies to distributor
firms as much as the products they sell. And how is a brand established Not by advertising and
sloganeering alone. First comes performance, then talking about it.
In the 1980s Stanley Madden and Marjorie Cooper from Baylor University undertook some
key early studies for PPAI. What they found is that the end-buyer focus on their marketing needs
was matched by distributor sub-sets. For example, if the end-buyer was only interested in lowest
price, then that company would seek out distributors known to sell on price. As a result, the
transaction was likely to degenerate into that distributor bugaboo—bidding. Many distributors say
they refuse to play the price game and instead position themselves as creative houses much like ad
agencies or as consultative services. That distributor sub-set is a match up for concept-seeking
prospects.
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Price selling is endemic in virtually every industry and the trick is to keep overhead low.
Price warfare has, you might say, a price and that is paid by the bid winner. Some distributors,
vexed at losing out to price-based competitors, are known to deliberately bid so low that the winner
may capture the order but not anything resembling a profit.
“Best price, best service” are ubiquitous brand platforms. Nevertheless, there is another
brand presentation that distributors might consider. Over the years, study after study by PPAI and
others in related industries have pointed to end-buyer desire for more help from distributors in
making the promotional products they buy work harder.
Supplier Support
Marketing intelligence—not to be confused with competitive intelligence—would be
valuable to distributors if it were practical to collect it. Given the fragmented marketplace that
distributors sell to, that is a formidable if. But it’s being done now by some suppliers who are
coding end-buyers by industry as a precursor to learning, among other things, the volume of orders
and spend from each. They believe distributors interested in obtaining such data will gravitate
toward them. They could be right.
Concerns
Distributors have to be aware that the industry is still evolving and new structures and
practices may emerge. Many of the things that keep those in promotional products up at night
talking to Abraham Lincoln and a beaver are common to both ends of the industry. In a nutshell,
distributors and suppliers responded with a remarkably common short list.
• Dealing with unrealistic competitor pricing—the kind that leads to unsupportable
margins
• Finding reps capable of consultative selling, demonstrating added value
• Losing out when large corporations curtail the number of promotional products
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providers they deal with
The dominant concern for distributors is—and always has been—suppliers selling direct.
One big distributor (over $10 million) points out buyers now have the ability to “Google anything.
They’ll just pick up the phone and call my source. I recently lost a customer I’ve had for 10 years
who went directly to my supplier. They (the supplier) in turn sold to the customer at a better price
than the company had been charging us.” Says another with a similar story, “Like other distributors
experiencing the same betrayal, I won’t do business with them again.”
Add to this seemingly everyday occurrence the most recent outrage (in the domestic
industry’s eyes anyway) of high-volume corporate prospects skipping both the distributor and the
supplier by going direct to the factory—overseas!
Ironic is the fear revealed to us by many suppliers—that of distributors buying direct from
the same factories that suppliers buy from. In Asia. Or in Asian factory outlets in the U.S. How
these challenges will play out in the marketplace is unknown.
The Shape of Marketing to Come—Maybe
The marketplace in which distributors and suppliers compete today tends to be portrayed
more simplistically than it really is. The chain from supplier to distributor to end-buyer actually can
have more links than that. With Asia so prominently in the picture, the product pipeline can travel
from factory, exporter, importer-decorator, distributors selling to ad agencies which become resellers
to end-buyers. There is six billion dollars of fat out there, claims one observer.
Strategies and practices that distributors and suppliers employ to cultivate customers are,
you might say, multitudinous. Most seem to have been adapted after getting good reviews in other
industries that have independent distribution systems.
What is breaking the surface today furnishes the best clues as to the near future. At least
three things, it seems to us, are worth keeping an eye on.
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Who is the target
Distributors are seeing change in the types of customers they service. “More non-profits,
more government agencies,” says one distributor with a five-person sales force. “The growing
number of people of Hispanic and Asian origin in our market is beginning to be reflected in
businesses of substance. So I’m looking to add business there.”
Service
Always an imperative to customer retention, service is likely to require a few added
dimensions. The demand—and opportunity—seems to be for more customer hand-holding and
concept selling by distributors.
Using a garden variety ballpoint as an illustration, a supplier advises: “Give them ideas on how
it works. Sure it’s a pen. There’s no reason it can’t be a pen with a music download. There’s no
reason it can’t be a pen with a sweepstakes entry. There’s no reason you can’t construct content or
packaging around an existing product…”
That sort of thinking leads nicely into the final observation.
Innovation
A challenge maybe but still very much in the picture. Traditionally, the industry’s products
convey messages in print. That is addressed to vision, but other human senses—taste, smell,
sound—are being recognized as the message receptors they are. With so many iPods and cell
phones in circulation, suppliers new to the industry are presenting things like music downloads and
ring tones attractive to distributor end-buyers.
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VIII. Conclusions
Any assessment of an industry’s marketing prowess should take stock of the industry’s fiscal
physique. In promotional products, that is not exactly wimpy. Yes, the industry oscillates in sync
with the U.S. economy, and at the moment more distributors than not are reporting some degree of
sales growth. So, it is possible for sales organizations to sustain themselves just by putting feet on
the street. Once customers are compelled to curtail their budgets, though, distributor owners begin
asking how do we get back our mojo
In that situation, marketing becomes critical. As the information we have uncovered
indicates, much of the distributor population is very adept at some aspects of marketing, particularly
in promotion. Not surprising for an industry that has promotion as part of its identifier.
But there are some weaknesses, too. Concentration seems to be narrow, focused on now, not
next month. Are customers happy with distributors and likely to stay with them any length of time
Most distributors seem to think so. Despite the fact that they invest little effort into determining
customer satisfaction. Why is that Perhaps because of their nature, salespeople are optimistic. If
they weren’t, they should be looking at some other vocation.
But optimism often relies more on hope than fact, and hope, we are told, is not a sound
business strategy.
That brings us to the area of marketing known as We need to know. We (distributors) need to
know how likely our customers will stick with us. What to do if they stray. Where the replacements
will come from. Also, where the fresh blood flows if we need an infusion to grow. Who on our
account list needs stroking. And who on that list isn’t giving us fair value for the time invested.
Marketing!
One phenomenon of the promotional products industry in the past couple decades has been
the incursion of outsiders. Those aliens from other industries who think operating a promotional
49

products distributorship is a cakewalk. Sometimes resented, the industry’s newest citizens do
generate a cross-pollination of marketing skills.
Aside from personal experience, much of what is learned in the industry emanates from
continuing education such as the programs once the exclusive purview of PPAI but now also
available through other organizations. Curricula seem to be focused on selling, presentation and
management.
Continuing ed has been a well-supported fixture of the industry since the mid-1960s, and in
earlier years, when instruction was disseminated on university campuses (e.g., Case Western
Reserve, University of Wisconsin) marketing was an important element. Industry old-timers might
relish a Dr. George Herpel redux.
In any event, promotional products distributors as a whole seem to be, if not sitting pretty, at
least situated somewhat positively. Unlike some other industries, the distribution system here is not
in jeopardy of being replaced—at least not for an eon or two. Certainly more will be demanded of
distributor owners and their people. But there are always some budding facilitators out there
working to bring in better tool kits.
50

Appendix
51

Cover letter and Questionnaire
RICHARD ALAN NELSON, PhD
LOUISIANA STATE UNIVERSITY
1636 GREAT OAK DRIVE
Baton Rouge, Louisiana 70810
Phone: 225-578-6686
Dear PPAI Member Distributor:
I am a professor at Louisiana State University and have been asked by Promotional Products Association
International to survey a sample of distributors such as you as part of an important study to determine how
distributors obtain customers and how they keep them.
As you know, many traditional forms of advertising and promotion are losing ground to the newer media. I
am sure you have no intention of joining the has-beens. However, for distributors to remain competitive,
your Association believes it must obtain and disseminate information to help them evaluate current sales and
marketing practices, jettison what isn’t working any more and adopt more promising strategies and tactics.
Of course, we will treat the information you provide as confidential; it becomes an anonymous contribution to
the aggregated data in our report that PPAI will publish. But please identify yourself at the end of this
questionnaire. As a thank-you for your participation, PPAI will send you a free electronic copy of the study
findings. You will also be entered in a drawing for a $500 gift certificate.
I, too, wish to thank you for your generous and candid input. Please respond by Sept. 27, 2006 using either
the enclosed reply envelope or fax to 501-623-6372.
Sincerely,
Richard Alan Nelson, PhD
Survey of Distributors’ Customer Acquisition and Retention Practices
1. Does your company have a written marketing plan for securing new customers and/or retaining existing
ones Please check one.
Yes
No
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2. Below are listed several conventional strategies used by promotional products distributors to target
prospective new customers. Please check all that apply to your company.
We concentrate primarily on large corporate accounts
We pursue customers of all sizes and in all industries
We focus on specific industries
We concentrate our calls and efforts on the persons doing the actual buying
We approach influencers who may be one or more levels above the actual buyer
We target multiple buying centers within the same organization
3. Does your company employ targeting strategies that are unique, unconventional or not listed in
Question 2 If so, please describe below.
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
4. Listed below are several conventional methods that distributors use to obtain new customers. Please
check all methods used by your company.
Cold calls
Referrals from customers
Networking
Membership in business/service organizations/clubs
Website
Telemarketing
Direct mail
Direct response marketing other than direct mail and telemarketing
Trade outs with other media Exhibit at trade shows/events attended by prospects
Advertise in yellow pages Advertise in newspapers
Advertise on radio
Advertise in business or chamber of commerce publications
PR/Publicity
Sponsorship of sports teams, community and cultural events
Non-promotional presentations: (webinars, talks to trade groups, etc.)
5. If your company employs new-customer-acquisition methods that are unique, unconventional or not
listed in Question 4 above, please describe below.
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
53

6. Of the methods you have indicated in Questions 4 and 5, please state the three you consider to be the
most effective in producing new business for your company. Then in the table below, please estimate
and check the percentage of your budget you have allocated for each of the methods.
Method 1: _______________
Method 2: ____________________ Method 3: ___________________
Method 1 Method 2 Method 3
0 – 10% 0 – 10% 0 – 10%
11 – 20% 11 – 20% 11 – 20%
21 – 30% 21 – 30% 21 – 30%
More than 30 More than 30 More than 30
7. Aside from checking new-customer prospects’ credit-worthiness, what methods, if any, does your
company use to qualify leads Please describe below.
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
8. What methods, if any, does your company employ to encourage salespeople to follow up on leads
Please describe below.
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
EXISTING CUSTOMERS:
9. Which of the following conventional marketing strategies does your company use to retain existing
accounts Please check all that apply.
Frequent communication with customers, in person or otherwise
Demonstrate empathy by acknowledging customers’ achievements unrelated to their business
relationship with us (e.g., honors, milestones)
Demonstrate our company’s capabilities by presenting case histories and examples
Demonstrate empathy by providing customers with non-promotional products information helpful to
their general marketing/promotion efforts
Emphasize, in our communications with customers, the professionalism of our employees as
indicated by their educational credentials such as CAS and MAS
Reward customers for their patronage by granting privileges, recognition or providing incentives,
including price deals.
10. If your company employs marketing strategies that are unique, unconventional or not listed in Question
9, please describe them below.
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
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11. Listed below are several conventional methods for retaining existing customers and promoting
increased buying activity. Please check all methods used by your company.
Frequent buyer program
Telemarketing
Sales calls
Email/Fax blasts
Special offers on artwork, other services
Quota contract purchasing
Reorder notification
Customer relations management (CRM) software
Newsletters
Direct Mail/Direct Marketing
Hosting open houses/showroom visits
Special deals on products
Discounting
Year-end rebates
Appreciation gifts (holidays, birthdays, other)
Sampling program
12. What methods, if any, that are unique, unconventional or not listed in Question 11 does your company
use to retain existing customers or promote increased buying activity Please describe below:
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
13. Of your company’s customer-retention/increase-buying-activity methods you have indicated in Questions
11 and 12, which three seem to work best for you
1. ___________________________________________________________________________
2. ___________________________________________________________________________
3. ___________________________________________________________________________
14. To retain your “A List” customers (those most important to your company), what methods, if any, do you
employ that are different from those you direct to other customers Please describe below.
___________________________________________________________________________________
___________________________________________________________________________________
____________________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
15. Which of the following customer support services does your company offer Please check all that
apply.
Warehousing/fulfillment Mailing Staffing company stores
Imprint artwork/design Gift wrapping/packaging Spec samples, actual or virtual
Customer training, consulting
Copywriting, layout, collateral production, incl. tags, curls, stuffers, flyers
Other (please describe) _______________________________________
55

16. Based on your company’s past experience, what percentage of your current customers would you
expect to have as active accounts five years from now Please check your estimate choice below.
Less than 20% 21 – 40% 41 – 60% 61 – 80% 81 – 100%
17. Does your company systematically attempt to measure a customer’s Lifetime Value to your company
Please check one.
Yes
No
18. Which of the following choices best describes your sales force, independent contractors included
Please check one.
a. Fewer than four full-time salespeople (including yourself)
b. Four or more full-time salespeople (including yourself)
If you checked Question 18a, please skip to Question 21.
19. If you have checked 18(b), which of these training methods do you use to help your salespeople gain
new customers and retain existing accounts Please check all that apply.
Sales training literature/videos obtained from PPAI, suppliers, other sources
Internal sales training sessions
Sales training seminars sponsored by PPAI or other industry organizations
Sales training seminars conducted by organizations outside of the industry
On-the-job training, including mentoring by experienced salespeople
Other (please describe) ______________________________________________
20. Which two sales training methods you cited in Question 19 seem to work best for your company
(a) _________________________________
(b) ___________________________________
21. Which of the following sentences best describes your company Please check only one choice.
Our distributorship is primarily product driven. We market our products in response to customers’
advertising and communication needs and as part of their overall marketing mix. Customers often tell
us what products they want and need.
Our distributorship is primarily program driven. We market our programs (e.g., company stores,
safety, service, sales meetings, trade shows, employee performance and recognition, etc.) We often
market our products as part of a larger program.
Our distributorship is primarily concept driven. We market our creative services, fulfillment, web
service and other niche capabilities in conjunction with the products we offer. We are part of our
clients’ overall marketing strategy and supply promotional products within the overall mix.
22. Please approximate your company’s annual sales in promotional products by checking one of the
choices below.
$500,000 or less $500,001 - $1,000,000 $1,000,001 - $2,500,000
$2,500,001 - $5,000,000 $5,000,001 - $10,000,000 Over $10,000,000
56

23. We want to make sure we’re not overlooking anything. Is there anything we haven’t asked about your
company’s customer acquisition/retention activities that you feel is pertinent If so, please tell us what
that might be
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
THANK YOU FOR TAKING THE TIME TO COMPLETE THIS SURVEY.
ONCE AGAIN, YOUR RESPONSES ARE TREATED AS CONFIDENTIAL, BUT WE ENCOURAGE YOU TO
IDENTIFY YOURSELF BELOW IN ORDER TO RECEIVE A FREE ELECTRONIC COPY OF THE
RESEARCH REPORT AS WELL AS TO BE ENTERED IN A DRAWING FOR A CHANCE TO WIN A $500
GIFT CERTIFICATE. MAIL YOUR COMPLETED SURVEY IN THE ENCLOSED BUSINESS REPLY
ENVELOPE OR FAX IT BACK TO 501-623-6372 BY SEPTEMBER 27, 2006.
NAME ________________________
COMPANY ____________________________________________
ADDRESS ____________________________________________________________________________
CITY__________ STATE __________ ZIP _______ PHONE ____________ EMAIL _________________
57

Questions Asked in Phone Interviews
1. Your company has, you say, a written marketing plan. Who writes the plan Owner or
principal Marketing manager Outside consultant How often is the plan reviewed and
updated Do you have separate marketing plans for acquiring new accounts and for retaining
existing ones
2. Your company, you say, calculates customers’ lifetime value to your company in terms of sales.
Can you tell us how you measure that
3. You have listed a number of advertising and marketing methods you use to secure new
customers. Do you have a way of measuring the effectiveness of these methods
4. Some distributors try to distinguish themselves from their competitors. Sometimes this is called
a USP, or Universal Selling Proposition. Is there anything that your company does to set
yourself apart from everyone else
5. Does your company have a formal method for determining customer satisfaction
6. Some distributors are interested in customer relationship management, or CRM. There is a lot of
software available to help them. Does your company use CRM software What software do you
use What is the purpose of the primary application you use
7. New products are part of a distributor’s lifeblood. How do you determine which new products to
add to your sales portfolio
8. Correct me if I am wrong, but distributors attend trade shows primarily to see what is new.
Therefore, how would you rate a supplier’s ability to draw your interest on the basis of offering
products you haven’t seen in the industry before, based on a scale of 1 (poor) to 5 (great).
9. Are you more likely to be attracted to suppliers who have a reputation for bringing out new
products–that is, stuff not seen in the industry before
10. In which of the following three categories would you describe yourself 1. Sell mainly
merchandise with good price the main consideration 2. Program sellers - develop diversity,
loyalty etc. 3. Promotion Agency
11. Last question. Distributors and suppliers encounter a lot of issues and threats that might impair
their ability to compete. Can you tell us any single issue that concerns you and your company
the most
58

PPAI Research
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© 2006 Promotional Products Association International. All rights reserved. Subject to change without notice.