Morphing Your Business From
Distributor to Agency
Joel D. Schaffer, MAS
Sound Line LLC
CAS - 1.5 pts
1/13/2009
7:30 AM - 9:00 AM
The views and opinions expressed by presenters or others who have provided materials to
and for this meeting are not necessarily those of PPAI. PPAI assumes no responsibility
for, nor endorses, any of the comments, recommendations or materials that are provided.
[email protected]
Joel D. Schaffer, MAS Soundline
1
Morphing
From Distributor to Agency
RE-POSITIONING YOU AND YOUR COMPANY
IN SHIFTING WORLD
For a copy of this Power Point e-mail [email protected]
WHO ARE YOU
& WHAT DO YOU DO?
My name is Les Cash, comptroller of
American United Airlines.
I’m Ben Athanees, safety director of Major
Motors.
Hi, I’m Hiram Workman, VP of human
resources for CBA Inc…
“Different Strokes For Different Folks”
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
3
[email protected]
You REALLY are the greatest
Powerful Performers – take stock
• Personal field experience
• Classroom experience
• Cadre of manufacturing capabilities
• Billions of dollars of inventory
• Global sourcing capability
• Infinite creative resources
• Hundreds of thousands of employees
Joel D. Schaffer, MAS Soundline
4
Revolutionary Winds of Change
• Product – quantity available, type
• Supply Chain -breaking the model SDE
• How The Buyer Buys
• Competition – type, amount, margins
• Tools – e-tools
Outside turbulence has a greater
effect on your business than ever.
Joel D. Schaffer, MAS Soundline
5
“You need to know where you’
you’ve come from…
from…
to know where you are going”
going”.
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
6
[email protected]
Roots Of “Advertising Novelties”
Novelties”
From: Counselor Magazine 1978
1768 - King George III prints a card with his likeness and shield as commemorative of his coronation.
1790 - George Washington uses metal buttons to promote presidential campaign.
1807- American Manufacturing (now Falcon) starts production of specialty items.
1840- Presidential candidate Wm. H. Harrison uses wooden nickels to promote his campaign.
1850 -Calendars and paper items imprinted with ads by Ketterlinus Company in Philadelphia.
1865- Ayers Almanac published with advertising on the back cover.
1868 -First celluloid button made of a compound of nitrocellulose and camphor.
1878 -Geiger Bros. open a print shop in Newark, NJ. printing calendars, posters & fans.
1881- Jasper Meek [Coshocton, Ohio] newspaper publisher creates a burlap school bag and sells ads.
1888-Thomas D. Murphy Co. (Red Oak, Iowa) begins imprinted calendar production.
1889 -Tuscarora Adv. Meek spin off hires people to sell oil cloth bags, pencil boxes, writing tablets etc.
1889 - Henry D. Beach [Coshocton] prints on wood, creates yardsticks, paint mixers and fly swatters.
1890- Diamond Matchbook sells new product – matchbooks.
1890’s- Early products grow: cloth caps, aprons, hats for horses, buggy whips, calendars, thermometers
1895- Printing on metal is as the first Coca Cola branded serving trays appear on market.
Joel D. Schaffer, MAS Soundline
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1896 - Brown & Bigelow Company started in St. Paul, MN.
1899 - Wall calendars are a “rage” and ‘expensive”, used as wall art in most homes.
1899 - Osbourne Company [Newark, NJ] expand calendar art market.
1903 - National Assn of Advertising Novelty Mfgrs. formed in Cincinnati To become PPAI.
1909 - Bakelite is patented, plastics advance in the novelty business.
1914 - NAANM holds first industry trade show.
1920 - “Jobbers” begin to grow in record setting numbers.
1933 - Murray Sholkin, Beacon Plastic brings injection molding to Boston from Germany.
1945 - The ball point pen begins a retail explosion that spills over to the ad specialty industry.
1950 - Joe Segel founds ASI – The Advertising Specialty Institute as a for profit service business.
1950 - Vinyl and vinyl binders enter the industry as a product Group.
1964 – SAA becomes the association’s name. Adds “I” in 1970.
1970’s - Imprinted apparel begins the rise to approximately 35% of the industry sales volume.
1986 - Soundline the first to bring music into the industry.
1993 – SAAI re-branded PPAI .
Joel D. Schaffer, MAS Soundline
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THE INDUSTRY IN 1921
N.A.A.S.M (eventually to become PPAI) organized its membership
categories as such:
1.
Metal specialty manufacturers
2.
Celluloid Specialty Manufacturers
3.
Leather Specialty Manufacturers
4.
Cloth Specialty Manufacturers
5.
Twelve Sheet Manufacturers (Calendars)
6.
Calendar Pad Manufacturers
7.
Art Calendar Manufacturers – Selling Direct
8.
Calendar Manufacturers Selling To Jobbers
9.
Advertising Specialty Manufacturers Selling To Jobbers
10.
Advertising Specialty and Calendar Jobbers
LOOK AT US NOW
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
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[email protected]
IDENTITY CRISIS WHO ARE WE?
TODAY’S SUPPLIERS WERE
ADVERTISING NOVELTY * SPECIALTY MANUFACTURERS
OUR MEDIUM WAS CALLED
•
•
•
GOOD WILL ADVERTISING
DIRECT PERSONAL APPEAL
LASTING ADVERTISING
TODAY’S DISTRIBUTORS WERE
JOBBERS * COUNSELORS * DISTRIBUTORS
Joel D. Schaffer, MAS Soundline
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ARE WE SCHITZOPHRENIC?
•
We don’t have multiple personalities. We have multiple applications for
our goods and services.
•
In our transactions the goods don’t change, the services don’t change,
it is the application of the goods and services that change.
•
We bring the individual capability, built on experience, training and
core competency to create solutions to business problems concerning
people, be they internal or external.
Joel D. Schaffer, MAS Soundline
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What You Do (Best)
Appreciate
Recognize
Motivate
Educate
Reinforce
Your fundamental impact is on human behavior.
You have the ability to modify it through the use of
promotion and promotional product.
You provide the “ARMER” for the tasks your client’s
wish to accomplish.
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
12
[email protected]
Our Buyers
2005 PPAI End Buyer Survey
who responded
•
•
•
•
20,358 qualified buyers surveyed
1801 responded = 8.84% (margin of error 2.2%)
21% mfg, 15.6% professional, 14.09% retail….
30% with sales of 100 million plus
Joel D. Schaffer, MAS Soundline
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Who They Buy From…
From….
•
•
•
•
•
•
•
•
•
•
•
76.5% had 1-5 vendors & 16.92% 6-25
30% budgets below 5K annually& 31.1% budgets 5K – 30K
38% in sales, 48.9% in marketing, 19% in event planning
50.5% were aware of the promotional product channel. 27% slightly
41% buy from distributors, 23% suppliers”, 11% other, 3% internet.
45% plan to spend more in 2006-7
Top categories; wearables, pens, desk, office, business accessories,
calendars, bags
Primary interest: business gifts, trade shows, employee relations, brand
awareness, PR.
23.3% do not measure ROI.
48.8% view you as a product provider, 25.85% as a consultant, 29%
as full service
Sourcing, ordering technology are keys to vendor selection
Joel D. Schaffer, MAS Soundline
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What The Buyer Wants From Their “Provider”
• 20% - Product provider
• 26% - Consultant
• 54% - Full service provider
Sourcing, ordering technology are keys to vendor selection,
but you should not be “a vendor”
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
15
[email protected]
When a corporation needs a solution
or service, who do they call ?
You need advertising you call…
You need employees you call…
You need insurance you call…
You need a model you call…
You need “stuff” you call…
We are not well positioned in the minds of the business
community, therefore they think and buy from us in the lowest
common denominator as a VENDOR !
Joel D. Schaffer, MAS Soundline
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Are you an agency?
Webster’s says:
Main Entry: agen·cy
Function: noun
Inflected Form(s): plural -cies
1
a : the office or function of an agent b : the relationship between a
principal and his agent
a person or thing through which power is exerted or an end is achieved :
INSTRUMENTALITY <communicated through the agency of the
ambassador>
an establishment engaged in doing business for another
<an advertising agency>
Joel D. Schaffer, MAS Soundline
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WE LIVE IN CHANGING TIMES
“A new type of advertising agency is developing and with a wide field for its
development. Instead of handling space advertising for its clients it is
devoting its activities to the handling of their advertising specialties….
It selects specialties to fit their client’s needs…
The growth of this new type of agency is due to the fact that most
executives are wholly unfamiliar with advertising specialties and are at a
loss when it comes to their proper selection.”
From Novelty News 1929
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
18
[email protected]
MORPH
•How we see ourselves is how we present ourselves.
•How we present ourselves is how the client sees us.
•How the client sees us is how they value the relationship.
•How they value the relationship makes you a vendor, partner, broker or agency.
Advertising Agency – Promotion Agency
Interior Decorator – Promotion Agency
Real Estate Broker – Promotion Agency
Financial Planner – Promotion Agency
Medical Doctor – Promotion Agency
AND SPEAKING OF ADVERTSING AGENCIES, LET’S TAKE
TIME OUT FOR THIS COMMERCIAL
Joel D. Schaffer, MAS Soundline
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Orphan Advertising Dollars Are Now Available
Estimated U.S. Adverstising Spending by Segment in Billions
Media/Method
Direct Mail
Newspaper
Broadcast TV
Cable TV
Radio
Promotional
Magazines
Internet
Total
1999
$41.60
46.90
41.00
9.80
16.90
14.94
11.10
1.80
$184.04
% Of Advt
22.60%
25.50%
22.30%
5.30%
9.20%
8.10%
6.00%
1.00%
100.00%
2004
$52.20
46.60
42.6
21.5
19.6
17.31
12.2
6.9
$218.91
% Of Advt
23.80%
21.30%
19.50%
9.80%
9.00%
7.90%
5.50%
3.20%
100.00%
Change
1.20%
-4.20%
-2.80%
4.50%
-0.20%
-0.20%
-0.50%
2.20%
Source: New York Times, May 23, 2005, p.C1.
Assessment of Expenditures for Selcted Media and Methods in Billions
Media/Method
Direct Mail
Newspaper (print only)
Television
Premiums & Incentive Travel
Radio
Consumer Magazine
Promotional Products
Point-of-purchase Advt.
Cable TV
Yellow Pages
Internet Advertising
Sponsorship
Couponing
Outdoor (i.e. billboards)
Product Placement (TV, films)
Sweepstakes & Games
Sampling
Total
2004
N/A
$46.69
47.20
N/A
20.01
18.53
17.31
N/A
14.19
15.47
9.62
11.10
7.20
5.80
3.46
1.80
1.76
$220.14
2005
$49.80
47.40
46.06
29.00
20.15
20.00
18.01
17.00
16.04
15.97
12.54
12.06
7.23
6.30
4.24
1.81
1.80
$325.41
% Change
1.50%
-2.40%
0.70%
7.90%
4.10%
13.00%
3.10%
30.00%
8.70%
0.40%
8.00%
22.50%
0.50%
0.50%
Joel D. Schaffer, MAS Soundline
20
TRUSTED MEDIA NO MORE
NEWPAPER
Readers have migrated to the web. 18-35 year olds get their new through Google
and on the net. NY Times, WSJ cut size of papers, circulation dwindles.
RADIO
Sirius and XM are the groundbreaking commercial free satellite radio services that
spell the demise of traditional AM/FM bands. i-pods have replaced radio for music.
TV
Cable and over 200 stations per household have diluted commercial TV. TIVO and
digital cable recording has altered viewing habits and negate commercial advertising.
On demand looms an even greater problem
has diluted.
Direct Mail
Distribution costs have increased 3 times more than inflation over the past 10 years
as non-delivery rates still hover about 8% and marketers look for alternate delivery
methods
Magazine
Explosive growth in new periodicals, lower readership, high cost per reader.
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
21
[email protected]
Advertising Agency Association of America
[Dateline 2006]
At the 4A annual meeting one of the best attended educational
sessions focused on finding alternative revenue streams in
view of diminishing revenue coming from traditional advertising
media
Fast Company Magazine
And Now Back To Our Regularly Scheduled Program
Joel D. Schaffer, MAS Soundline
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Putting It All Together
You affect the relationship between a business: their employees, customers and
surrounding community (including prospects stockholders and the general
populace).
•
You then call upon your individual, or group diagnostic talents to
develop a course of action to remedy the problem.
•
You then identify and prescribe tangibles and intangibles that can,
working together address the need and solve the problem.
•
You Supply the remedy.
•
You Are Industrial psychologist
No matter how mundane your prescription, it is still based upon
knowledge gained through learning and experience. It is the value
added, the personalized service you bring to the table that is proprietarily
intellectually
yours.
Joel and
D. Schaffer,
MAS Soundline
23
What’
What’s In A Name?
• You own or work for a distributorship - AGENCY
• You are a PROMOTIONAL CONSULTANT
• What’s on your business card?
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
24
[email protected]
Industry Stratification
MEGA
AGENCY
VALUE ADDED
AGENCY
TRADITIONAL
DISTRIBUTOR
COMMODITY BROKER
The industry is rapidly changing, we all have a future and a profitable
one. Each company will assume its position in the marketplace.
Joel D. Schaffer, MAS Soundline
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THE MEGA AGENCY
Delivering mega value added services:
•
•
•
•
•
•
•
•
•
•
•
Global sourcing
Event planning
Meeting Planning
Premiums & Incentives
Warehousing & Fulfillment
Graphic Design
Copy writing
Print & Packaging
Sweepstakes
P.O.P.
Multi Media
Financial relationships will vary from contract to retainer
Joel D. Schaffer, MAS Soundline
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VALUE ADDED AGENCY
Value agencies delivering;
•Global sourcing
•Premiums & Incentives
•Warehousing & Fulfillment
•On Site Decorating (engrave, embroider,
screen, print)
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
27
[email protected]
TRADITIONAL DISTRIBUTOR
Does the majority of its sales in the traditional model;
S-D-E
Supplier – Distributor – End Buyer
Joel D. Schaffer, MAS Soundline
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THE COMMODITY BROKER
•Specialist
•Limited or no brick & mortar
•Internet
•Catalog
•Direct Seller
•FOB off shore
•Disintermediation
Joel D. Schaffer, MAS Soundline
29
Two words to put your company into another league.
Words to put you in another league:
•CAS / MAS
•Chief Creative Officer
•Vice President
•Creative Consultant
•Promotional Consultant
•Branding specialist
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
30
[email protected]
Put A Bite Into Your Agency Business
A STATEMENT PROTECTION OR INTIMIDATION
©
http://www.copyright.gov/forms
• Confidential and proprietary
• All rights reserved
Joel D. Schaffer, MAS Soundline
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LIMITED PROTECTION –UNLIMITED IMPACT
WHAT WORKS ARE PROTECTED ?
Copyright protects "original works of authorship" that are fixed in a
tangible form of expression. The fixation need not be directly perceptible
so long as it may be communicated with the aid of a machine or device.
Copyrightable works include the following categories: literary works;
musical works, including any accompanying words dramatic works,
including any accompanying music pantomimes and choreographic
works pictorial, graphic, and sculptural works motion pictures and other
audiovisual works sound recordings architectural works
These categories should be viewed broadly. For example, computer
programs and most "compilations" may be registered as "literary works";
maps and architectural plans may be registered as "pictorial, graphic,
and sculptural works."
WHAT IS NOT PROTECTED BY COPYRIGHT ?
Several categories of material are generally not eligible for federal
copyright protection. These include among others:
Works that have not been fixed in a tangible form of expression (for
example, choreographic works that have not been notated or
recorded, or improvisational speeches or performances that have not
been written or recorded) Titles, names, short phrases, and slogans;
familiar symbols or designs; mere variations of typographic
ornamentation, lettering, or coloring; mere listings of ingredients or
contents Ideas, procedures, methods, systems, processes, concepts,
principles, discoveries, or devices, as distinguished from a description,
explanation, or illustration Works consisting entirely of information
that is common property and containing no original authorship (for
example: standard calendars, height and weight charts, tape
measures and rulers, and lists or tables taken from public documents
or other common sources)
Joel D. Schaffer, MAS Soundline
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NO, YOU MAY NOT BID OUR IDEAS
•
•
•
•
•
Design and create a proposal cover.
Put your mission statement inside your folder.
About us – information on your staff and services
Recognition and awards – use logos and press releases
Produce a standard quote form with terms and
conditions on the reverse side.
• Prepare a few generic cover letters (where you sell)
• Prepare case history sheets (your accomplishments)
• Display and explain your creative protection
FOLDER
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
33
[email protected]
PAY FOR CREATIVE OR PURCHASE HERE
•Define your service model.
•Present your options as regards paying for service.
•Insure all art and design is not work for hire.
•Compute a billing rate for services.
•Consider topping rights
You can’
can’t give it away free, if it doesn’
doesn’t have a fee
Articulate
Joel D. Schaffer, MAS Soundline
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Painting Your Capability Picture
•
•
•
•
•
•
•
3,200 factories
Manufacturing capabilities
Well over 100,000 employees
Experts in all production methods
Industrial Designers
Creative Expertise
I.T.
Painting a picture of your “team”.
Joel D. Schaffer, MAS Soundline
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You are the “greatest”
greatest”.
Let your Clients and prospects know it.
Thank You
For Spending Your
Time In Professional
Development.
Support your regional and national
promotional product associations as they raise the bar for
you and your business.
[email protected]
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
36
[email protected]
Market Data
Buyers do not have much experience;45% have bought from
0-5 years. 27% 5-10 years.
Promotions managers supervise staffs of promotion
specialists. These managers direct promotion programs that
combine advertising with purchase incentives to increase
sales. In an effort to establish closer contact with
purchasers—dealers, distributors, or consumers—promotion
programs may use direct mail, telemarketing, television or
radio advertising, catalogs, exhibits, inserts in newspapers,
Internet advertisements or Web sites, in-store displays or
product endorsements, and special events. Purchasing
incentives may include discounts, samples, gifts, rebates,
coupons, sweepstakes, and contests.
Joel D. Schaffer, MAS Soundline
37
U.S. DEPARTMENT OF LABOR
Industrial-organizational psychologists apply psychological principles
and research methods to the workplace in the interest of improving
productivity and the quality of work life. They also are involved in
research on management and marketing problems. They screen, train
and counsel applicants for jobs, as well as perform organizational
development and analysis. An industrial psychologist might work with
management to reorganize the work setting in order to improve
productivity or quality of life in the workplace. Industrial psychologists
frequently act as consultants, brought in by management to solve a
particular problem.
Joel D. Schaffer, MAS Soundline
38
Articulate
Our agency works with you and your company bringing a tremendous
amount of creative talent and experience to work with your business’ key
asset, your people, be they employees, or customers.
We are specialists in helping you reach specific goals through
appreciation, recognition of performance, motivating future performance,
educating and reinforcing your brand, your products and services to and
for your people assets.
Once we have developed and have approved solutions, our global
sourcing team is called upon to execute the program by finding the best
quality, service and price from our approved vendors worldwide.
We are your full service agency, your partners until we have successfully
executed and accomplished your objectives.
Joel D. Schaffer, MAS Soundline
Joel D. Schaffer, MAS Soundline
39
[email protected]
Fast Company
The obsession with branding owes much to the decline of
traditional advertising and marketing. The ad industry has seen
its cash cow penned in by a growing demand for accountability
the dreaded return on investment.
Jeweler’
Jeweler’s Circular Keystone
“Branding Fever has overtaken the industry.
Pest Control Magazine
Make your customers ask for you by name.
Joel D. Schaffer, MAS Soundline