It was an undeniably difficult year in 2020 for the promotional products world. Distributors lost on average 20% of their sales, with the smallest firms taking the biggest hit. Client retention fell, order values dropped, margins were lower – the list goes on.
But now, among low numbers of COVID cases and the continual reopening of events and institutions, there’s an unbridled sense of optimism that sales will improve and clients will return. It’s something many in the industry hoped for and even expected. Though sales were down and many customers stopped ordering during the pandemic, sales never vanished completely – and distributors think that’s going to fuel a burst in the months to come.
Toby Mann, sales consultant at Safeguard (asi/316203), notes that this is a great opportunity to pull clients back in by being a great, preemptive sales partner.
Distributors have a clear number-one concern: Nearly 40% of companies cited their customer base as their biggest challenge, with another 11% fretting over retaining their clients. Both totals markedly increased from 2019.
Top Three Difficult Challenges for Distributors
1. Increasing the size of customer base
2. Remaining profitable under pressure to cut prices
3. Retaining best customers
“The more we can do to prepare our clients ahead of time for what I think is going to be a really busy fall is good,” she says. “Once everything opens up more, there’s going to be a huge need and I don’t know if all of our clients are ready for it or have budgeted for it. We’re trying to prepare our clients for the onslaught that’s going to happen.”
It’s part of a forward-thinking attitude that will keep past clients from straying too far as the industry begins to wake back up. The fear is that, in the past year, clients won’t automatically return to the distributors they previously did business with, or that they’ve learned to live without promo. But from what distributors are seeing right now, clients have remained loyal throughout the pandemic – assuming distributor sales reps haven’t dropped the ball.
“If clients changed the way they’re doing business and you’re not adapting, they probably are going to shop around.” Mark Freed, Genumark
“It’s very easy to stay engaged when orders are coming in, but it’s a lot harder to stay engaged when you’re not getting calls returned and people keep saying they don’t have anything on the horizon,” says Robert Fiveash, president at Brand Fuel (asi/145025). “COVID really separated the good and the bad salespeople. At the beginning, there was a lot of hesitation in calling clients. Did it feel a little dirty to try and sell during this pandemic? And then … things slowed down to such a level that we were able to fit personal conversations into the mix when we normally wouldn’t have, and that created a lot of strong personal relationships.”
Distributors who spent time during the pandemic connecting with clients through simple, casual conversation – discussions unrelated to sales – have set themselves up for booming business once events and promotions return in full force. And when those clients do come back, salespeople need to be able to adapt to the new world of doing business post-pandemic if they want to keep those clients.
“If clients changed the way they’re doing business and you’re not adapting, like if they’re looking for sustainable solutions and you’re showing them the same old crap, they probably are going to shop around,” says Mark Freed, president of Genumark (asi/204588). “If you’re adapting and embracing the change and understanding your client’s new challenges, it’s a great opportunity.”
Trying to Hold On
Steady for years, client retention has dipped each of the last two years. Historically, larger distributors boast better retention rates than small distributors. In 2020, distributors with revenue of $5 million and over kept 81% of clients compared to 72% for distributors $100K and under.
Percentage of Clients Retained
Don Sanders, owner of SellPromoProducts.com, agrees. “If you sold yourself properly, your clients never left you,” he says. “If you didn’t, you’re giving them the opportunity to leave you. If we don’t change in life, we’re going to drown no matter what we do. Some people are incapable of change, and in this business, that’s a real problem.”
Regardless of how it may have happened, though, if you did lose sales or clients over the last year, you can start winning them back (and gaining new ones) with a change of perspective and some elbow grease.
For Mann, that means creating initiatives that benefit both the distributor and the client in a safe way. Safeguard is hosting “lunch, look and learn” events where a small selection of clients comes into the showroom. They’ll be able to look at new products and learn about them, eat a provided non-buffet lunch, and network with colleagues, all while hopefully driving sales to Safeguard. The company has also launched a referral program and a twice-monthly newsletter that combines product information with the same personal conversation fostered by the pandemic.
Waiting on an Order
Unsurprisingly, the number of orders per distributors dropped during the pandemic.
Median Number of Orders
Both Genumark and Brand Fuel are pushing more sustainable, locally made quality products, and continuing to sell (with high demand) kitted projects that became popular during the pandemic. Freed and Fiveash also espouse educational tactics to obtain and retain clients. To them, that means learning about new products, styles and designs; informing customers about changes in the industry; and gaining deep product and process expertise in their clients’ industries. Freed also notes the importance of staying active on social media to have a consistent presence with their clients. All these strategies, both distributors stress, should be used long after the pandemic subsides.
As for Sanders, he suggests looking for client opportunities with companies that are buying now instead of a couple months down the road – businesses that are recession-proof, like funeral homes, dentists and realtors. People will always need dental care, a place to live and an eventual place to rest, regardless of what else is happening in the world. The clients are there – you just need to put in the work to find them. “We should always be using different strategies to increase our customer bases,” he says. “Stop feeling sorry for yourself. Things are never going to be the same.”