Regional Sales Report: MIDWEST Looking Good

13 Jun Posted by in Swag Projects | Comments
Regional Sales Report: MIDWEST Looking Good
 

Midwest: Looking Good

Midwest 4 Year Review

An energy boom and manufacturing renaissance have led to a surge in certain job sectors and consumer confidence. Sales are up $100 million (about 2%), from $4.4 billion to $4.5 billion.

There are some positive signs for promotional product and apparel distributors coming from all corners of the region. First and foremost, North Dakota has continued its economic boom thanks to the energy business, and forecasts call for that strength to continue for at least seven or eight more years.

This also bodes well for industries supporting these businesses. The construction, technology, wholesale trade/transport, warehousing, service and even agriculture industries are adding more to GDP in North Dakota than in almost every other state. And with demand high in the state for people who will work in uncomfortable conditions, promo products and wearables are aiding in worker satisfaction and minimizing costly employee turnover.

 

RIPE FOR SALES

Shari Neigum, a Bismarck, ND-based sales rep for the Vernon Company in Newton, IA, says that in the past three years her revenues have increased greatly – now well into the mid-six figures – and that she has put of retirement to take advantage of this selling environment. She routinely drives to field offices throughout the state to offer new ideas and book orders, which are most often for “the comfort and convenience items for oil-rig workers and truckers.”

Heat- and fire-resistant apparel, such as coats that are dense for warmth and protection but not too bulky, plus durable gloves that can be customized, top the list. “And they always need phone chargers that they can hook into the power outlets of the rig machinery,” she adds. With weak cell service in many areas, their phones lose a charge very quickly. They need those items just to get through the day. The same goes for sturdy all-in-one tools, personal food storage containers and insulated heavy-duty drink bottles.

With many coal mines in the state in addition to oil rigs, Neigum has a steady stream of safety-awareness projects. For these, she sells pedometers, carabiner watches that secure to clothing, and flashlights. She will soon pitch these clients on back-end recognition programs featuring electronics, recreational outerwear and other higher-end products to encourage maximum compliance from workers.

Neigum’s business also includes construction, real estate and other segments connected to the infrastructure buildup and newly-needed services. She’s selling “a lot of wearables, especially custom caps used as promotional giveaways,” she says. “And they always want customized pens that will last a while.”

One sign pointing to a truly broad and favorable sales environment, even her manufacturing clients, buoyed by cheaper energy costs and strong demand, have increased the frequency and size of their promotional orders. In fact, a manufacturing mini-renaissance is occurring in many areas of the Midwest. This results from many factors, including rising costs for Chinese-made goods and the opening of assembly and parts factories here by foreign automakers.

In some places, the high concentration of workers with specialized degrees or expertise has helped draw high-tech manufacturing firms. An example: Promotion Concepts Inc. of Kalamazoo, MI, landed a medical-device maker as a large and steady client for whom “we fulfill a lot of salesforce recognition programs,” says Laurene Powers, owner. “They also want internal employee incentives for perfect attendance and other measurables,” all of which means they’re amenable to a wide range of product and apparel ideas. With 30% of Michigan’s output coming from manufacturing, this segment could again be solid for promotional distributors – even in neighboring states.

Bob Levine, director of marketing for MADCO Printing and Advertising in St. Louis, MO, has seen a recent bump from his manufacturing clients too. “More money is flowing to promo products and apparel; it’s been a bit easier for us over the past year,” he says. “They are doing more employee motivation and customer promotion – giving polos and other mid-level wearables to employees, plus T-shirts and golf-related items to customers and prospects.”

Jim Porter, president of Specialty Advertising Proforma in Elmhurst, IL, echoes Levine’s assessment. With about half his business coming from manufacturers, he endured the drought from 2009 to 2011, but is now optimistic. “The clients never left me, though they cut back by at least half in those years. But budgets are coming back,” he says.

Porter also enjoys solid business on the backend of safety programs. “They don’t put much money into an upfront awareness item,” he says, “but they want interesting products to recognize outstanding compliance.” At the end of 2013, one client had zero accidents in a few factories; those employees received an auto-safety kit with jumper cables, flares, first-aid kit, basic tools, rope and other contingency items. “Recipient feedback on that was terrific,” he notes. Another client gave employees upscale zippered athletic jackets adorned with the company logo on the front, that year’s corporate theme on the nape and the phrase “Zero Accidents” on the bicep. “That was one of my bigger orders of last year – several hundred of them at $60 each.”

To gain a long-term foothold within larger companies, Porter has changed the way he operates. “While I’m getting more direct mail and trade show opportunities from sales and marketing departments in addition to their sales force focused stuff, I’m reaching out more to other areas,” he notes. “HR is a larger buyer than in the past, and is central to my strategy. I also build a relationship with the president’s admin. By moving all the way through a company, it anchors me there, even if some people leave. I have a small staff, so I need to do that rather than always getting new clients.”

Midwest Sales

DIVERSIFY TO WIN

Besides diversifying within a client organization, Midwestern distributors should ensure a diverse client base of different industries. Robert Ochsendorf, president of Ochsendorf Promotions in Columbus, OH, found out the hard way a few years back. His firm relied too strongly on the pharmaceutical sector. When new rules came down that severely limited what could be given to medical offices, doctors and staff, Ochsendorf saw $1.6 million – more than one-third of the firm’s total revenue – disappear.

Since then, “we’ve scratched and clawed to become diversified,” he says. “We went more into financial, retail and other areas to make up that revenue.” Among those first two, he’s found strong demand for recognition awards. Popular items for shorter-term programs include sunglasses that retail for about $50 plus electronics such as phone chargers powered by rechargeable batteries, or those that plug into a computer’s USB port.

Bags are hot too. Ochsendorf took a February order from a financial firm rewarding more than a hundred top achievers and clients with a trip to a Rocky Mountain resort. It was complemented by outdoor-related products. With $20 per attendee, he searched for a sports bottle, first aid kit, flashlight, lip balm, sunscreen and snacks to pack into a drawstring bag that would go to attendees’ hotel rooms.

Debra Lopez, account manager for Ad Madison in Madison, WI, has a solid amount of university business but also has made corporate inroads, especially in insurance. One such client attends trade shows throughout the year. “We do a lot of co-branded items with their logo and the logo of a local pro sports team,” she says. Products range from cutlery and drinkware that’s used in rafes, to computer dusters, night lights and pot scrubbers. The best part? “They often order 15,000 pieces at a time,” she says.

Porter’s firm has also tapped into the fields of food processing and distribution. “They are an anchor for us,” he says. “In good or bad times, everyone buys food. But brand visibility is hard to maintain, so the manufacturers use our services to stay top of mind in Kroger’s, Safeway and WalMart.” He does well with logoed golf balls and golf shirts for store managers and workers, as well as drinkware and can coolers.

He’s also selling lots of table covers for organic food exhibits at trade shows. “Organic is being promoted like crazy because the prices are coming down,” he says, making this niche ripe for promotional ideas.

 

OPPORTUNITIES ACROSS INDUSTRIES

Mary Ann Kennedy, president of Primary Source in Des Moines, IA, has a roster of clients that includes schools, public agencies, insurance companies and banks. “I do see the the agencies paying more attention to wellness and fitness programs; those had gone away from using promotional items in the recession,” she says. Items such as sturdy drink bottles, salad bowls and soup containers with lids, segmented plates with reusable utensils and collapsible lunch packs are being packaged together for under $10. Program themes are good “because then we can build different levels of marketing that involve products to reinforce the message,” she says.

Powers finds that hospitals are big users of product for wellness programs as well as for quarterly incentive programs for patient safety. What’s more, some of her corporate clients have onsite fitness facilities, which present an opportunity to provide items that people can use as they work out. Besides the usual water bottles, stopwatches and pedometers, she’s sold T-shirts with performance qualities plus sweatbands and wristbands, athletic socks and flip-flops for the shower.

Besides wellness and employee motivation, hospitals also have foundation-related programs that reward financial contributors. “In donor recognition, we tend to assist them from start to finish, not just with product selection but with strategies and communications too,” Kennedy says. For the typical donor, price points for recognition items top out at about $35.

“Fleece jackets are really moving lately, with the hospital name stitched or even lasered,” she says. “As for building name recognition among the public through 5K races and other special events, T-shirts with a creative or clever message are popular.”

Lopez does major business with a college, having made inroads with at least 100 departments and offices at the University of Wisconsin. She provides a constant stream of interesting product ideas. Recent winners include a pewter paperweight inscribed with wording from a famous plaque at the school’s entrance, a $15 item; Lamis tote bags, some of which resemble leather, ranging from $4 to $12; a cinching backpack made to look like the UW mascot, Bucky Badger, a $3.50 item that’s custom-made overseas; and a variety of writing instruments starting at $3 each. Her collaboration with the UW campus housing office has produced orders ranging from polos for employees to T-shirts for promotions to seed packs for plants that students can grow in their dorm rooms. For the UW First-Year Experience, she delivers polos for the guides as well as notebooks, presentation folders, gift bags, knit beanies and gloves for students.

Levine will also focus on state and local political races in Missouri this year with giveaways for public appearances. But he doesn’t shift his attention far from his core accounts – the medical offices affiliated with the hospital at Washington University in St. Louis. These doctor and nurse groups buy everything from custom stress relievers and embroidered garments, to decorated tabletop covers for trade shows that attract new students. “The university itself gets a huge amount of embroidered wearables from us,” he says. “And they don’t want cheap stuff.”