The world as we knew it changed in the blink of an eye. One week it was business as usual with distributors visiting clients’ offices and placing orders for upcoming events, and suppliers planning for summer trade shows while their factories busily turned out logoed products by the thousands. Then it all stopped.
The virus, now known as COVID-19, first gained attention in January as a health crisis half a world away. By late March, it had escalated into a global pandemic that has killed thousands, quarantined cities, shut down restaurants and theaters, cancelled conferences, concerts and sporting events—including the 2020 Olympic Games—and closed businesses from coast to coast. In the promotional products industry, these actions have resulted in mass cancellations of distributor orders and left suppliers with warehouses full of products with nowhere to go. The lack of sales hit the industry hard and fast with some companies reporting sales down by 70 to 90 percent as of April 1. The downward spiral has also restricted the ability of many industry businesses to keep all their employees on their payroll. An unknown number of promo company employees were undoubtedly among the first 6.6 million who filed U.S. unemployment claims by April 2.
With all but essential businesses shuttered in many states and provinces, a deafening lack of demand for promotional solutions and most people in the U.S. and Canada living under shelter-at-home mandates from the government at this writing, promo distributors are using their ingenuity to try to keep their businesses alive, their customers engaged and to maintain some sense of normalcy.
Ronn Torossian, a crisis management expert with more than 20 years of experience working with national and international brands through disruptive and unexpected events, says for many people, their greatest source of anxiety has been the process of watching the news unfold— with information, and misinformation, fueling panic and distress. “Right now, people need a voice of reason, and brands and their leaders have an opportunity to be that voice,” he says. “First and foremost, communication is key. Regular communication alleviates concerns and provides reassurance. Ask yourself: what service/information can we provide that will help those who may be in need? It could mean offering free shipping or sending weekly emails just checking in. Either way, brands need to use this time to commit to a crisis communications strategy that informs, educates, reassures customers and earns their trust.”
Matt Kaspari, CAS, president of distributor Kaspo, Inc. in Wheat Ridge, Colorado, says, “I was looking at my numbers and thinking how I could ride this out with no money coming in.” He realized he needed to take action so he built a marketing piece to let customers know that he was aware they have more on their minds than promo, but the piece also planted an idea about sending at-home employees a gift to remind them that their company cares. He worked with several suppliers, including AAkron, Lion Circle, Better Life Line by Fields, Liberty Playing Cards and Hit Promotional Products, to offer pre-built packages, and he compiled products and made up his own, too, for employees working from home and for those with kids at home. Items included in some kits were a blank puzzle, bird house kit, coloring book, shopping bag, jump rope and playing cards. By early April, the Kaspo team had personally fulfilled its first order delivering the kits to more than 100 employees working for a nonprofit in Colorado. Tucked inside was a card from the company’s CEO that delivered a warm message of support. “I love to see the supplier partners come together; we are all struggling,” says Kaspari.
The fact that Colorado schools are continuing to deliver a take-out breakfast and lunch to children in low socio-economic areas, gave Kaspari another idea. He approached schools with the idea of providing them with reusable bags that could be used to carry the meals home. He also worked with Hit to provide 9,000 reusable bags to a foodbank. Each bag also held 2020 U.S. Census materials, satisfying a need for another of Kaspo’s clients. As Kaspari continued to reach out to his clients, more programs came together. “Remember your relationships, reach out to people,” he says. “We built our business on relationships. If we’d built it on price, I don’t know what conversations we’d have right now.” In times like this, he says, smart businesses always cut costs. “So, if you look like a cost, you’ll get cut.”
Glenna Fulks, chief connecting officer at Kite Meeting Management, LLC, in Piqua, Ohio, is another distributor who is using her creativity to connect with clients by sending them a specially-designed care package. The idea was born during her visit to The PPAI Expo in January. When she heard the idea for a custom care package, she thought it would be perfect for one of her clients. Little did she know that just three months later she’d be using the idea to market her own business. The box Fulks prepared featured her corporate logo on top and had a message printed on the inside lid that let customers know her company cared about them. Inside, she placed a 20-ounce Yeti tumbler etched with her company logo and a set of branded earbuds or a wireless charger. To ensure safety of the gift, Fulks left all the items wrapped as they had come from the supplier and she wore gloves when packing the boxes.
As of early April, Fulks reports that none of her clients had cancelled events; instead, they had postponed them for late summer or fall. “In this regard, we are blessed to continue our business, albeit projects are pushed out a few months, but are still on the schedule,” she says, adding that the core business at Kite Meeting Management is planning, organizing and producing all types, styles and sizes of hospitality events. Over the years, promotional products have become an integral part of those events and the services Fulks offers.
Amanda Wigal-Schlosser, owner of distributor Brandables in Phoenix, Arizona, also found a way to stay visible by creating small boxed gifts for her top customers. “We included items to help them while they stay at home, including a printed sheet with the top movies to stream right now as well as our employees’ tops picks for books, movies, music, games, etc.,” she says. The Brandables team also tucked inside the gift boxes a pack of antibacterial wipes for phone/screens, an inexpensive toy for clients’ children and a self-promo product or two. “We reached out to everyone for their home address and told them we are sending them something to brighten their day,” she says. “Everyone wrote back saying they were very thankful, and we had some great personal conversations. Usually, everyone is so busy getting their work done, you can’t connect on a personal level. Most customers also mentioned they would have an order for us shortly.” Wigal-Schlosser says the company is also promoting employee morale kits for companies to send to their homebound employees to show they care. She eliminated the kitting and drop-ship fees as an incentive and to show that she appreciates her customers and is concerned about their well-being. “We are trying to think of new ideas every day just to keep us busy and also keep us top of mind to our customers,” she says. “I’m looking forward to seeing everyone on the other side of this.”
Another approach distributors have been taking is simply to reach out with a call or email to check on clients. “As an organization, we are sending out email communications focused on caring and checking in; it’s not product-focused,” says Dawn Ruler, MAS, sales manager at Lewiston, Maine-based Geiger. “My team, specifically, is checking in on their clients and sending self-promos that suggest we care (Peerless Umbrellas tagged with the message: ‘We’ve got you covered’) and basically not selling. This is a time to stay connected, not be an ambulance chaser. We are here for our clients even if just for a place to vent.”
Graham Murray, owner of distributor RKM Awards in Cottam, Ontario, has used his creativity to provide help to those in need. “I’ve reached out to our local municipality (one of our customers) to see if they, and neighboring municipalities, would be interested in a joint sponsorship of a recognition gift for all of our health-care workers at our regional hospital. By co-sponsoring, the costs are more manageable,” he says. “They jumped right on board and were delighted that someone was thinking in this proactive capacity.” As soon as this project moved to production, Murray was planning to reach out to members of the Business Improvement Association (a group of local businesses) for a similar project; this one will be to thank frontline workers within the BIA’s own organization (i.e. grocery store cashiers, etc.). In this way, Murray says he’s not chasing hand sanitizer and face masks but supporting the work of frontline workers and his community.
For some distributors, the pandemic was a signal to step back from the business for a time and spend their days a bit differently and perhaps improve their businesses and themselves in the process.
Matt Davidson, owner of LOGO Dynamics in Henrico, Virginia, says his response to the pandemic was initially conditioned by a business broker who had valued the business at only about a third of Davidson’s valuation. “He said I could only expect a value equal to last year’s profit. That didn’t make sense to me because it discounted 28 years of building relationships, developing marketing programs for clients and helping with a client’s charity,” says Davidson. “I was demoralized when the virus hit. My response now is much different.”
Davidson thought about the 2008-2009 recession and what he did to survive it and put a plan in place to survive this economic fallout. First, he renewed his commitment to networking and customer service by writing thank-you notes, something he had been too busy to do before. Then he focused on building his technology expertise and launched an online store through Square, a cloud-based point-of-sale system. Now, he’s using social media to attract people to the site, which offers motivational fitness apparel for Baby Boomers using the theme, “Progress, Not Perfection.” Included is a t-shirt with the message, “Everything will be OK.”
He’s also used this slower period to spend more time with his grandchildren, take walks to a nearby park, participate in online fitness and yoga classes, dig in his garden and attend church online.
“In short, I read where the crisis will help us figure out how to make our businesses survive. I can already see that this crisis is helping me be a better businessman as well as a better husband, dad, granddad and community activist, and that’s important because I am determined to prove that business broker wrong; that my business is worth more than the valuation he put on it. I’ll work smarter as well as harder to make my vision become a reality.”
Rama Beerfus, MAS, owner of Lev Promotions in San Diego, California, is trying to touch base with as many clients as she can to see if they’re all right and to ask if there’s any way she can help them with their client and prospect outreach plans during this time.
Unfortunately, many of Beerfus’s clients are trade-show marketers and managers—a segment that has been particularly hard hit due to the cancellation and postponement of events, trade shows and conferences. As a result, many of her clients were furloughed or laid off and some aren’t sure if they’ll have a job to come back to when this is all over, at least for the short term. Beerfus is working to help them remain positive.
“For clients that have their employees working from home, we’re putting together appreciation gifts and what I’ve dubbed as ‘keep your sanity’ gifts for their employees. In some cases, we’re doing that for their clients and ‘essential’ employees who are coming into the workplace,” she says. “For those clients whom I’ve been able to reach but are now unemployed, I’m asking for their resumes and permission to send links to their LinkedIn page to try to help them find jobs when this is all over if not before.”
Business is equally bad in Fort Worth, Texas, where Brian Jolin, CAS, runs Jolin Promo. He reports that most of his clients’ events are cancelled and budgets are frozen. “I have 100 brilliant ideas for clients to send to their staff and clients who are working at home, and while people are very receptive to the idea of branding and gifting, they simply are locking down almost all of their purchases with hopes of meeting payroll as long as possible.” However, he has had a couple of successes. “I had a medical client who ordered branded bandanas for their patients who are experiencing coughs/sneezing to wear since there is a shortage of medical masks. These will also be fun pet gifts at a later date. I also had one new client who ordered rush ‘Covid-Free’ celebration t-shirts for their staff that completed a two-week quarantine.”
As far as trying to solicit and inspire some new projects, Jolin’s company participates in the AIM buying group and each quarter it puts together a merchandise box that highlights participating supplier items using a theme. He usually has the order shipped to himself and hands them out when visiting client offices, but when he learned the spring 2020 merchandise box was themed “The Future is Green,” he obtained home addresses for all the key decision-makers at a few clients and mailed products to them. “They all have called or emailed me with gratitude for the fun gifts and ‘surprise’ in the mail,” says Jolin, adding that in the conversation he told them that when they were ready to spend some funds again on physical marketing, those products and home delivery would both be highly relevant.
Jolin has also had a backdrop designed to use during video chats. He used it recently to host an upcoming Zoom happy hour for about 30 people at a top client. The virtual event included door prizes—spec samples with their corporate logo including power banks, tumblers and wireless chargers, as well as some Jolin Promo-branded items such as an insulated bottle, deck of cards and a thick, plush blanket.
“I went from being slammed with work for events and trade shows to having everything postponed or cancelled,” says Manny Chazan, owner of Anthem, Arizona, distributor Work Hard Play Hard Marketing. He says he went from not being able to keep up to now having time to catch up on tasks that had been piling up. Still, he’s staying in touch with his networking groups through the Chamber of Commerce and Rotary using Zoom and Go To Meeting software. He’s also a member of a barter network called Vendvana, a membership-based community that helps businesses trade for things they need like marketing, advertising, pest control, physical therapy, landscaping and cookies. Chazan used his credits to send cookies to close friends and great customers and he joined with fellow Arizona-based distributor Jim Gordon at NorthStar Identity, LLC to order and mail puzzle books to customers who have extra time on their hands.
As bleak as the situation appears right now, a number of world-renowned business experts and successful entrepreneurs are stepping forward to offer hope, guidance and expertise, particularly to business owners. In a Fox News Rundown podcast broadcast on March 26, billionaire entrepreneur Mark Cuban, owner of the Dallas Mavericks, said he understands the fear business owners are experiencing. “I’ve been in that circumstance before … but there are things that you can do to really try to turn a huge negative into a positive,” he said. His three pieces of advice for business owners were to communicate with stakeholders—employees, suppliers and customers because they are concerned as well; take this time to look for ways to improve your business, rethink processes and rework literature; and to be informed about federal economic relief efforts. He urged listeners to contact their banks to see how they can participate in these programs.
Solomon Ari, a private equity investor, and energy and tech CEO, advises small business owners to take these additional steps:
Communicate with your creditors and debtors. Explain your company’s situation, discuss options and re-negotiate terms if you can. Inquire about extensions on payment terms, request waivers of late fees and penalties. The good news is that you are not alone. Tens of millions of people are currently in the same boat, and your creditors know that. In many ways, this puts you in the driver’s seat to renegotiate payment terms and obtain some forgiveness on penalties that would normally be imposed. At the same time, communicate with your company’s debtors and diligently collect monies owed to you. Be prepared to negotiate with customers and accounts who owe you money. Reach out to the current customers you do business with to gauge their situation. Offer discounts and other payment incentives to get whatever liquid money you can upfront. For example, if a customer owes an outstanding balance of $1,000, make an offer to take $700 now to settle the account. This will give you much needed cash in hand.
Identify customers’ pain points and solve them. Strategize ways to solve your customers’ pain points in a way that could potentially make you indispensable during a time when most products and services will be cut from the equation. Whether that is free delivery, discount packages, future incentives, extra services or penalty-free rescheduling, the old playbook no longer applies. Become flexible in your approach. If you are able, extend more favorable payment terms to gain more market share within your industry.
Form strategic alliances. Companies should also look to industries that are thriving and communicate their desire to align and/or partner with other companies to leverage profitability, innovation and market share. Seek out companies that offer complimentary products or services and reach out to see how you can help one another. People are more emotionally receptive in these times, because no matter what industry you are currently in, everyone is feeling vulnerable right now. Entering into a strategic partnership with another company could mean selling a part of your company or even acquiring part of another company. A partner may have the ability to loan you capital in exchange for equity in your company. It could mean extending a sweetheart deal on something that you usually don’t offer such favorable terms on. These ideas should be discussed with a mutual respect and understanding of your respective industry, needs and goals; and the current marketplace in which you are operating.
He also advises companies to consider these types of partnerships:
Joint Venture – If you decide to merge with another business in your industry to combine assets and resources, you are going to need to consolidate and cut costs. For example, Company A may have a stronger sales team, but Company B has a better administrative team. You would consolidate those resources, keeping Company A’s salesforce and Company B’s administrative team.
Equity Investment – A private equity investor comes in and either loans you capital or invests capital into your company. This means that you are loaned money in exchange for equity in your company. A private equity investor may extend you a line of credit to help you survive this climate. You don’t pay back an equity investment in traditional terms, but you will find your ownership stake shrinking, perhaps considerably. The good news is that the equity investment would likely outweigh the loss. One thing to consider during economic downturns is that private equity investors will look for terms that favor their investment. This is because the higher the risk for the investor, the more that investor is exposed financially, the more the terms will be slanted to cover that risk.
Acquisition – Getting acquired by a larger business that has the financial wherewithal to support your business and keep operations afloat during this period of time places a strong bandage on the current uncertain marketplace. This means you will not be in such dire need of immediate profits to stay alive or to plan the future trajectory of your business. You can also maintain your marketing and advertising efforts and continue to grow your market share without immediate profits, but with the future projection of profits.
Streamline efforts with technology and outsourcing. How long can your workforce work remotely? Can you outsource some departments? Can you streamline your administrative team using technology or keep your workforce intact but teach them how to be more efficient with the use of technology? These are some of the questions to ask yourself during this time. You may find out through an efficiency audit of your business that 20 percent of your workforce is doing 80 percent of the work. With that information, you can pivot your efforts and infrastructure accordingly. This is an opportunity to become more efficient and more profitable in the long run.
Align with industries that are doing well. There are certain industries that thrive in tough times, perhaps due to some of the foils of human nature. Those most likely to thrive during this pandemic are real estate (investors and would-be investors love a buyer’s market), liquor and tobacco sales, firearms sales, streaming entertainment, sectors of law that deal in financial hardship (think bankruptcies and foreclosures), virtual meeting software, health care and banking. Conversely, industries like travel, hospitality, brick-and-mortar retail, brick-and-mortar consumer services, locally-driven services that require face-to-face social interaction and manufacturing will suffer the most during this time. Apart from necessities like food, medication and certain sundries, consumers are now buying fewer goods and services as their financial insecurity and anxiety grows along with massive loss of income.
Keep your eye on fall 2020. Companies can use the spring and summer months to position themselves for an autumn boom if they take the right strategic steps. The financial effects of coronavirus will be felt long after the pandemic is under control. We will feel ripples and aftershocks well into 2021 and perhaps throughout this decade. This means that business as usual is a losing proposition. Our economy will recover, albeit with a different spin than before. Virtual networking and virtual meetings will become more and more commonplace, and the traditional sales meeting or boardroom meeting will happen less. We will also come back together and socialize in slightly different yet distinctive ways, with a return to more community-based activities. Local parks, places of worship, board games and general fellowship with one another will be newly discovered and offer a newfound charm.
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In a recent online presentation to PPAI’s executive team and staff directors, Geiger President and CEO Jo-an Lantz, MAS, discussed seven valuable skills needed by entrepreneurs and business leaders who are navigating these tumultuous economic times. She first presented the tips at Geiger’s annual Fireside Chat, a tradition dating back to 1956, in which the company shares its financial report, accomplishments, goals and expectations. Typically an upbeat event, this year’s web-based meeting that drew about 900 employees and sales partners, took on a decidedly different tone amid the COVID-19 pandemic. Despite the challenging days ahead, Lantz coached her team on these seven skills that would help them get through it.
- Don’t dwell. There’s no point in circling the drain on things that are out of your control.
- Learn to prioritize. Prioritize your time, energy, meetings, calendar and creativity.
- Avoid analysis by paralysis. Done is better than perfect. This has never been more imperative than right now.
- Stay open. Don’t get attached to outcomes. Be flexible and learn to shift what you were going to do vs. what needs to get done.
- Focus like a laser. Be like a dog with a bone. Keep your eye on the prize.
- Believe. You have to be your No. 1 cheerleader and hypewoman. It’s a time when some want to become invisible, but you have to keep reaching out and remain visible.
- Pivot. Yes, it’s the word of 2020. Be nimble and quick on your feet. Turn on a dime. Sink or swim.
“We can’t just give our best effort, we have to be successful,” Lantz said. “We must succeed to make it happen.”
PPAI has available dozens of COVID-19 resources including links to government assistance programs, articles, webinars, podcasts and real-time status updates from industry suppliers at ppai.org/coronavirus-information.
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Tina Berres Filipski is editor of PPB.
