In the past three months, there have been countless conversations between supplier and distributor partners about preparing for and reacting to tariffs amid what has become a global trade war. Of course, promo is far from the only industry affected by these tariffs, and many predict that the broader economy will be negatively impacted by them as well.
That means that, along with hypothetical rising prices in promo, plenty of the industry’s reliable clients are vulnerable to be financially hindered during these times. Whether its past recessions or a pandemic, most branded merchandise firms aren’t unfamiliar with having to work through unfavorable economic conditions with customers that are looking to tighten their proverbial purse strings.
So, PPAI Media talked with a number of distributors and asked them: How do you handle it when a client says they may need to cut back their promo budget due to external factors?
Below are a few tips or approaches that distributor firms were willing to share with the promo community.
RELATED: Navigating Tariffs: Strategies For Distributors And Suppliers
Tip #1: Technology can help clients feel in control of their promo spend.
If a regular client is in a position in which their spending must be reduced, they aren’t going to do well with anything that they feel resembles an “all-or-nothing” approach. Some distributors leverage digital possibilities to let the client get a better sense of their options.
Mitch Emoff
EVP, Goldner
“Goldner has found success by having a market offering and tools to aid customers in maximizing their ROI in tough times as well as good times,” says Mitch Emoff, executive vice president at Goldner, PPAI 100’s No. 85 distributor. “The key for Goldner is a proprietary e-commerce platform that allows customers to control their budgets and brand with on-demand ordering in low minimums with quick turnaround times.”
Tip #2: Start conversations from a place of empathy.
Clients reducing their budget impacts promo firms, but if it’s due to economic conditions, it’s important to remember that they’re financially impacted as well.
Shawn LaFave, MAS, president of Alpharetta, Georgia-based distributor North Georgia Promotions, says the firm is often proactive in learning what their clients are going through.
Shawn LaFave, MAS
President, North Georgia Promotions
“To get a better understanding of our clients’ needs, we started reaching out with a simple question: ‘How are things going in your world right now?‘” says LaFave. “These conversations have been insightful, often leading to discussions about items they need but haven’t yet acted on. It seems that while tighter budgets are a factor, the bigger issue is that our clients are dealing with heavier workloads and more immediate priorities.”
Strong partnerships rarely form overnight, but they can end much quicker if not handled with care. A long-term approach shows foresight. This is a time to prove you’re in a positive relationship.
“We focus on our relationships that we’ve built, have open conversations and do our best with each customer to find what they need and work within their budget,” says Mary Bolduc-Glagola, president of HoCo Promo.
Mary Bolduc-Glagola
President, HoCo Promo
Mason Linn, CAS, manager of distributor membership at PPAI, reminds distributors that, first and foremost, clients should know that you understand the situation and how it impacts them.
“If your customer is upset, be empathetic to their situation,” Linn says. “Most times, simply expressing understanding can go a long way in diffusing the tension.”
Tip #3: Information is your friend.
One great benefit of working in promotional products is that you shouldn’t have to trick anyone to make a sale. The facts are on your side. If clients are looking for an area where they can reduce budget, respectfully pointing them toward the effectiveness of promo may be a helpful approach.
Carolina Junghans
CEO, Blink Marketing
“One common approach used by our team is to lean on industry data and metrics to break down cost per impression and long-term value,” says Carolina Junghans, CEO of Blink Marketing, PPAI 100’s No. 88 distributor. “This approach allows our clients to make smarter merch decisions and often leads to more strategic budget shifts – sometimes even reducing spend on pricier channels, like broadcast and outdoor marketing, to maximize the impact of their promo products.”
Promo, after all, isn’t a vanity spend. It’s a profit-driving investment.
“I shift the conversation from cost to value,” says Chelsea Williams, owner and CEO of Spark Branded Solutions. “Try to work in a case study or success story of how promotional products increased customer retention or boosted sales. I also like to compare the ROI of merchandise to other forms of marketing, like a digital ad. When clients see promo products as an investment rather than an expense, they’re more likely to find room in their budget.
Chelsea Williams
CEO, Spark Branded Solutions
“By educating your clients, you help them make informed decisions rather than walking away based on assumptions.”
Some of what you share might be hard to hear, but giving your client the full picture could also help them operate with clarity.
“We let our clients know that prices are only going up,” LaFave says. “If they would like to get more value with the budgets they have, they should order sooner than later since we project that tariffs will be affecting more industry suppliers closer to Q3, and pricing will most likely be higher.”
Tip #4: Show them you are flexible.
Ultimately, many clients may simply have to adjust, and there’s value in making sure they know that’s entirely possible. If there are options, they’ll likely let you know what they’re comfortable with.
“One customer asked about a company store that they have and if we can switch out some of the high-end, name-brand apparel and go to some less expensive items,” says Jim Gordon, MAS, president of Phoenix-based distributor NorthStar Identity. “They didn’t want to lose quality per se, but can they switch items and save an extra $10 or $12 a shirt? So, we went from a super high-end apparel option to a nice shirt.
Jim Gordon, MAS
President, NorthStar Identity
“We’ve also let other customers know that we can find other items that are generic rather than name brand.”
That might mean admitting that routine transactions will have to turn into active collaboration.
“If the main sticking point is price, it’s time to get creative,” says Williams. “I recommend starting with a good/better/best approach so that clients can balance cost with quality and ultimately choose the option that’s best for them.
“I would also look for budget-friendly alternatives so they can have a multitude of choices. Customers are less likely to walk away when they feel like they have options.”
Tip #5: Suggest Made-in-USA products.
Among his reasons for imposing tariffs, President Donald Trump is hoping it leads to a greater demand for Made-in-USA products. Suppliers specializing in American-made items are equally optimistic, especially because tariffs help level the playing field in terms of pricing.
Gordon has already recommended that some of his clients switch to products made in America, although that was more for the benefit of shorter turnaround times. Still, buying American is a wise option amid the global trade war, as it also comes with potential benefits of supporting fair labor and local businesses as well as reducing one’s carbon footprint.
- Nearly half (46%) of PPAI 100 suppliers and distributors plan to focus on domestic sourcing, according to the latest data from PPAI Research.
North of the border, the #BuyCanadian movement has evolved from the tariff turmoil. “The mere threat of tariffs and suggestion that Canada become a 51st state has created a sense of national pride and a strong ‘Buy Canadian’ sentiment as Canadians seek to support each other,” said Aaron Moscoe, CEO of distributor TPS Promotions & Incentives.
Aaron Moscoe
CEO, TPS Promotions & Incentives
‘Thoughtful Approach’
PPAI has long supported free trade.
Serving members of all political stripes, the Association recognizes the need for policies that strengthen the U.S. economy and support domestic manufacturing. However, any measures – including tariffs – must be implemented strategically to minimize short-term economic disruption while setting the stage for long-term growth. Abrupt cost increases impact businesses of all sizes, from small distributors to global suppliers, ultimately affecting jobs, investment and product pricing throughout our industry.
Drew Holmgreen
President/CEO, PPAI
“We advocate for a thoughtful approach – one that balances economic goals with the realities of supply chain dynamics,” says Drew Holmgreen, president and CEO of PPAI. “With support from our lobbying partners in Washington, we are in ongoing conversations with industry volunteers, trade groups and policymakers with the goal to ensure that any trade policies consider the full scope of their impact and allow businesses time to adapt.”
- Every year, PPAI members and staff travel to Capitol Hill to advocate for the promotional products industry as part of PPAI’s Legislative Education and Action Day.
- Tariff concerns will be one of the key issues we’ll be discussing with members of Congress on April 7-8. (Learn more about LEAD here.)
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
