Promotional products, ranging from anywhere between a key ring, a diary, custom coins to a pen and mug etc are items used to promote a product, service or company program including advertising specialties, premiums, incentives, business gifts, awards, prizes, commemorative and other imprinted or decorated items. Promotional merchandise is a valuable marketing tool that can help to establish brand awareness of a company among consumers. Promotional products are also a great way for companies to communicate their message in a memorable way.
However, it is important for companies to manage the process of sourcing promotional goods effectively. In many companies problems can arise when promotional goods are purchased by inexperienced buyers from unapproved suppliers. This can result in the products being purchased across the company having an inconsistent quality, which can be damaging to the companies brand. A lot of time and energy can be spent inefficiently sourcing the goods, which can be bought from a huge variety of suppliers at vastly differing prices and quality. And as many suppliers are based in the Far East, buyers need to understand local pricing, duties, testing and shipping to ensure they receive the right product to enhance their promotional strategy. So what is the right way for companies to source promotional goods effectively in order to maximise the considerable benefits promotional products offer?
The benefits of purchasing promotional products
Promotional products are a large and growing market. According to the PPAI Sales Volume Study conducted in 2017 approximately $21.3 billion was spent on promotional products in 2016, and the rate of spend is growing at around 5% a year. It’s easy to understand why promotional products are so popular when you consider that PPAI’s consumer study of 2017 found promotional products to be the number one most effective form of advertising to promote prompt action across all age ranges, enabling companies to target millenials and baby boomers with equal effectiveness. The same study also showed that 90% of consumers recall the brand from a promotion and 80% recalled the messaging. Promotional goods were also found to be effective at encouraging engagement and action from consumers, as 8 out of 10 consumers researched the brand after receiving promotional goods.
Promotional Products Sales Volume in $billions
- 2014 – $20.0 bn
- 2015 – $20.8 bn
- 2016 – $21.3 bn
most effective form of advertising for targeting across generations
With marketers looking for good return on investment, promotional goods make an ideal strategy, as long as the return on investment isn’t lost through poor buying strategies.
Problems with current sourcing methodologies
Some of the problems companies face when buying promotional goods include:
- Manual processes
Manual processes are time consuming because they often involve long drawn out processes involving online searches, completing paper based or email requests and manually communicating with multiple suppliers. They also result in errors and inefficiencies, when data is input manually mistakes occur more frequently. Measuring the effective return on investment (ROI) of a campaign is also difficult if meaningful data is hard to gather and is kept in an individual spreasheet somewhere that is hard to track down. If information about purchases is not accurate then this means there is no spend visibility or control over the promotional goods expenditure.
- Sourcing off catalogue
Promotional goods are often sourced ‘off-catalogue’, so even if a company has good processes in place for most of its purchasing, promotional goods can be a category of spend where inefficiences and mistakes are made more frequently.
- Single source
Often promotional goods are single sourced from online catalogues such as Amazon or Staples. Whilst convenient these platforms can be limiting and they often offer little flexibility for purchasing non standard goods or personalising the promotional products. With these purchases there is no supply chain visibility resulting in the risk of repetitional damage if produced by a dodgy supplier and no control over shipping across borders, such as customs delays. Buying in this way means that companies are offered no price leverages and so often end up over paying for goods.
- Sourcing complex projects
Complex projects have a greater risk associated with them. The risk of making poor purchasing decisions, not achieving good value for money and not receiving high quality promotional goods are all increased as projects become more complex.
Developing the right sourcing strategy
So, how can companies source promotional goods efficiently and maximise the benefits promotional products offer?
The first step is to get the right specialist procurement technology; ideally a cloud based spend management platform that is capable of capturing requirements from non-expert users. The platform needs to be easy to use, and allow users the flexibility to specify what they want or allow them to order from a curated catalogue of products.
Claritum’s dashboard gives a clear overview of suppliers orders
The platform should be intuitive and easy to use and should enable purchasers to see images of all the products, this will ensure that the platform is adopted internally in a positive way. It should also be robust enough to handle a wide varitey of transactions including; small transactions, purchasing of projects (not just single products),cross border trading and commodity purchasing from a catalogue as well as custom sourcing (ie RFx). Automating the purchasing process helps eliminate the errors that occur when buying is mannually driven.
In addition to being easy to use for buyers, the procurement technology should allow businesses to control spending in one platform. The platform should be vendor neutral and should be capable of controlling costs at all the levels of the process from sourcing to procurement through to invoicing.
At Claritum, we help clients procure a wide range of print, packaging, gifts & premiums, uniforms & apparel, office supplies and a wide range of frequently ordered products and services. Our cloud spend management platform streamlines thousands of orders, so we’ve seen what works and what doesn’t. Claritum’s cloud based spend management platform streamlines the buying and selling of promotional goods and other complex products and services. Buyers, suppliers and experts collaborate in the cloud to improve spend visibility and control, achieve cost savings and efficiencies and to reduce risk and waste. Get in touch with Claritum’s experts today and find out how you could improve the efficiency of your promotional products purchasing.