Talk to Your Clients Now About the Economy
Thursday October 30, 2008 | Filed under:
From Jennifer Brown, Director and Social Chair for CAPPA:
Back in 1992, when Bill Clinton ran for president, his campaign slogan was "It's the economy, stupid!" Sure enough, 16 years later, most of us would agree that the current economic climate is #1 on our minds.
All you need to do is turn on the TV for five minutes and you can't help but notice stories of instability in our financial markets, unemployment rates on the rise and stock market highs and lows that make the biggest roller coaster at Six Flags seem tame.
Last week on CAPPAChat we posted a survey to our readers about how the economy is affecting business. The answers were unsettling, but not unsurprising - 100% of people said the economy is affecting their business and 88% think that this crisis will carry over into 2009.
Where does this leave us? Many companies are looking for ways to "trim the fat" and the first place they look is the marketing budget. The mentality is "we can live without marketing for six months, but we can't live without paying salaries."
If we take a minute to examine this theory, we quickly realize that it's flawed from the start. In economic downturns the last thing you want to quit doing is marketing, because if you quit marketing for six months three things happen: 1) You loose brand momentum, recognition and loyalty, 2) Sales drop, and 3) After brand momentum, recognition and loyalty fly out the window, your sales are down and guess what...you can't make your payroll, stupid!
If I had a perfect formula for fixing this problem let's just say that I'd probably be spending my days in the lap of luxury. What I can give you are a few tips and tricks that have worked for us:
- Across-the-board price increases are on the way in 2009. Don't procrastinate talking to your clients about this even one more day. Let's look at it this way: If you have a client that spent $10,000 on tradeshow giveaways in 2008 and prices increase 17% in 2009, they will have to spend $11,700 to buy the same product. Solution: They need to buy at the end of December to take advantage of 2008 pricing - place the order on Dec. 28th and bill them on Jan. 1st. They get better pricing and can still charge to next year's budget!
- Buy in bulk - we have a client that orders thousands upon thousands of napkins every year. However, because of the way their budgets have been previously structured, they order in boxes of 250 at a time. It does not take a mathematical genius to figure out there will be significant savings if they order 10,000 at a time, versus 250.
- Take advantage of specials when possible. Do you always look though quarterly flyers to see what's on sale? If not, you should! If your client is talking about buying 1,000 water bottles in March, call the supplier and see if they are going to be on sale anytime in the next 30 days. Some suppliers will go ahead and honor the sales price (30 days either way) or maybe your client can hold off for a week or two?
- Plan, plan, plan...Stop paying rush charges and expedited shipping! Talk to your clients and get a feel for what they have going on in the next three months. This will allow you to use normal production and ground shipping which will make a big difference on the bottom line. Not only will you be saving them money, but you will be earning their trust because you will be seen as advisor versus and order-taker.
Many of us are 1-2 people companies and sometimes you feel like you're an island unto yourself. If you're wondering where to go to ask questions and get advice like this, network with your suppliers to build lasting relationships, keep up with the latest on the industry via education, attend tradeshows and bounce ideas off of your peers...the answer could be within your regional promotional products association.
Post a comment now or email me at jennifer@360promos.com, and be sure to check out the blog for the Corridor Area Promotional Products Association, at www.cappachat.com.