Awards & Engraving

June '16

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Page 62 of 83

A&E JUNE 2016 • 61 INCREASED VISIBILITY EQUALS BRAND EQUITY No matter what you call them, promo- tional products and ad specialties have one thing in common: the proven effect of enhancing the image of and marketing strategy for any company incorporating them, either as a stand-alone or in con- junction with another piece. From the various Promotional Prod- ucts Association International (PPAI)- sponsored studies and surveys—con- ducted at such colleges as Louisiana State and Georgia Southern Universities—some interesting conclusions have been drawn. When a promotional product accompa- nies a request for referral, there were five times more referrals received than with an appeal letter alone. When a company adds a promotional product to its media mix, it can increase interest in the brand by as much as 69 percent and create a favor- able impression of the brand 84 percent of the time. These are excellent reasons why your clients ought to be integrating promo- tional products into their external and internal marketing plan. Chances are they already do, but they may not be getting those items from you. GETTING ON BOARD Frank Crowe, president and owner of Indianapolis-based Artistic Awards, and his cracker-jack team have been offering ad specialty items for years. Crowe shared with me some insights he's gleaned from his experience selling promotional products: "Bringing these types of products into the fold is easy… The beauty of it is we don't have to make and embellish the pen, garment or bag ourselves. We just take the order." ARE PROMOTIONAL PRODUCTS BUOYS OR ANCHORS? Crowe went on to opine about being a promotional products distributor: "It didn't take us long to realize that promo- tional products generate much smaller gross profit margins than our core busi- ness—exquisitely designed, customized service and recognition awards. It is not uncommon for a customer job of an award that we design and manufacture in-house to have a gross margin of two to three times greater than a promotional products order." It is important to know what your shop's overall gross profit margin is. Grab your most recent consolidated income statement—a.k.a. the profit and loss (P&L) statement—and calculate your gross margin: simply find the dollar amount of gross profit and divide it by your gross revenues. If adding promotional products to your mix, at between 30 and 40 percent gross margin, will dilute your already-healthy gross margin of, let's say, 55 percent or greater, then be careful how heavily you promote and make known that you will entertain a promotional products order. If the sale of promotional products will reap gross margins nearly the same as the rest of your product offerings, then advertise and promote the heck out of them. On another note, take a hard look at how you compensate your salespeople— assuming you have some and offer them incentive pay. If there is a significant dif- ference in the profitability of your core Promotional products can meet the needs of those customers looking for a one-stop shop experience. IMAGE COURTESY LASERBITS

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