There has been a decades-old discussion in the motivation industry around the value of cash vs non-cash rewards.  And in the current economic environment of wage freezes and layoffs, the idea of additional cash for gas and groceries is certainly appealing.  However, when it comes to rewarding employees and driving behavior, cash is not king.

A 2010 study that was featured in an article written by Paul Hebert of I2I, a South Carolina consultant in the incentive industry, offered strong data from a controlled field experiment  which measured the extent to which monetary and non-monetary gifts affect workers’ performance.  This study concluded that even though workers often elect a cash gift when given the choice, non-cash gifts are more effective.  According to the research, ” … a gift in-kind of equivalent monetary value has an economically and statistically significant effect on productivity. Workers provide 30 percent more output on average.”

This information is a strong testament to the fact that just creating an incentive program to recognize and reward employees is not always enough to reach the intended goals.  It’s important to understand the best type of recognition vehicle for your associates, and the most effective method of presenting the award.  Cash gifts are easy – they require minimal effort from management and can be given quickly for the occasional on-the-spot recognition.  However, the cash is spent and forgotten quickly, while the gift will remain a constant reminder of the employer’s appreciation, thus driving the desired behavior.

Motivating employees requires creative thinking, and there should be more than one tool in the employer’s incentive program box.  The next time the HR team gets together for a discussion on improving morale and increasing productivity, invite your incentive partner and ask for ideas on how to integrate effective premium products into a well-rounded program.  Your employees will thank you!

I need it yesterday!  Good intentions aside, every corporate buyer has probably said these words to their promotional merchandise provider on more than one occasion.  Whether the urgency is due to last-minute project approvals, or budget restrictions, or a simple lack of planning, the rush order is part of our everyday reality.  Turnaround time is measured in hours, rather than days.  The only question is:  Can your provider deal with it?

The solution for a hard goods order is generally easier than a wearables order.  In today’s fast-moving, ever-changing business environment many hard goods suppliers have invested in better equipment, improved software systems and more knowledgeable support staff to allow for 24 hour turnaround.  Thousands of products are available for this type of rush service, and many of the suppliers offer it at no extra charge.

Apparel orders normally take longer by nature.  Sizes, fit and the type and complexity of the decoration method must be considered.  And in many cases, the wearable is purchased at one supplier, shipped to the decorator, and then finally delivered to the customer.  But even with all those factors, speedy delivery can be achieved.  Apparel choices should be limited to those suppliers that offer in-house decoration to avoid double shipping; art files should be provided in correct format; and the customer art approvals must be made immediately upon receipt.

However, regardless of the urgency, if it’s delivered on time, but it’s wrong, nobody is happy – and everybody loses.  Signed customer art approvals should be non-negotiable, and expedited freight charges should be quoted and approved before the project begins.

The business climate has changed.  “Business as usual” includes tight budgets, rush orders and overnight deliveries.  The corporate buyer and his or her brand management partner must work together to make quick decisions with clear attention to detail.  The product suppliers have stepped up their game to allow flexibility and fast turnaround time – the only thing between the customer’s need for speed and the finished product is a savvy promotional product specialist.  Don’t settle for less!

Lead paint?  Choking hazard?  Flammable materials?  Custom made promotional merchandise is one of the best tools for setting your brand apart from the crowd, but when you need to know that the item will be produced to the specifications of the Consumer Product Safety Commission (CPSC) and be safe for the end user, what questions should you be asking?

First, when contemplating the option of producing custom goods, only those distributors with strong overseas factory relationships and at least five years import experience should be considered for this type of project.  There are many ways to make costly mistakes in overseas production, and without the benefit of an established overseas network, the risk of problems occurring increases dramatically.

Once you and your team of experts have decided on the basics of quantity, budget, timing and design, there should be a unanimous understanding on how to confirm the quality of the product.  A few basic points to consider when having that discusssion:

• 3rd Party Quality Check (QC):  For a relatively small amount of money (approximately $350), a 3rd party independent QC company can offer services such as product inspection, factory auditing and lab testing. This should be considered a non-negotiable part of the project cost.
• Verify Raw Materials:  It’s absolutely imperative that you know exactly what materials are being used in your product.  For items that come in contact with food, is it food grade?  Is the tote bag material flame resistant?  Request written documentation from the supplier that the materials are safe.
• Request Pre-Production Samples:  Photos are not sufficient!  Quality and design issues can only be caught with an actual sample.  If the first sample is not acceptable, request and wait for another sample – and don’t sign off on production until the final sample meets all specifications.
• Create QC Checklist:  Don’t assume everyone has the same quality concerns.  Create a simple and effective list of the most important aspects of the item you’re producing. Then be sure everyone on the team has a copy and all key points have been addressed. Some of the most basic considerations should be contents and packaging; item details such as color and shape; appearance and function; special requirements; and photos.

A well-designed custom promotional product can make a bold marketing statement and increase your brand visibility.  But when you need to be sure that the product quality reflects the high standards of your company, be certain to insist on a well-defined quality control plan from your supplier.

Corporations spend a lot of time, money and effort to build brand awareness through social media channels.  And oftentimes if the research points to a high number of hits and clicks and pageviews, the marketing team celebrates and waits for the sales to come through.

But if the initial visit to Facebook, Twitter or LinkedIn didn’t drive the visitor to take the next step to learn more about your product and your company, then the exercise has failed.  In a post by Pamela Vaughan on HubSpot.com, she suggests that there are 8 foolproof ways to increase your social media reach.  In addition to basic tips like interacting with followers, sharing useful, valuable content and adding social sharing buttons to all your content, she also includes offering incentives for fans and followers.  In other words, give them a reason to buy.

Gift with purchase, customer loyalty programs and limited-time product specials are a few of the tactics that build brand awareness by motivating customers to purchase your product.  Consider a spot gift-with-purchase program with a limited budget that only allows for an inexpensive item like an umbrella or tote bag.  But rather than making a quick decision to go with the off-the-shelf umbrella idea, you offer a custom-designed eco-friendly insulated grocery tote embellished with your logo and marketing tag line in a subtle and distinct way. The cost would be about the same, but the customer reaction may be quite different.  Or, design a simple loyalty program that distributes points for sales, referrals, surveys, etc, and give the customer the opportunity to spend those points on your company products, or other lifestyle items that are branded with your logo.  In any case, the idea is to turn a visit to your Facebook page into a loyal customer.

Nearly everyone would agree that marketing through social media can be effective, but only if it is combined with well-designed supporting programs aimed at driving the followers to “drink the water”!  Schedule a meeting with your marketing team, advertising/social media specialists and preferred branded merchandise professional, and design a multi-faceted social media strategy that will ignite the interest of even the most passive on-line visitor.

Cost-plus pricing is used primarily because it is easy to calculate and requires little information.  Basically, this pricing method is accomplished by adding a standard mark up to a product after production and distribution costs have been met.  While it seems to ignore demand, image and the value of customer service, I would argue that if a provider truly doesn’t consider those other market factors, the business has problems that a cost structure can’t fix.

The true challenge to determining the fairest pricing structure for both the customer and the vendor is to develop a clear understanding of how to categorize costs.  Overhead costs, production costs, and YES! the costs associated with exceptional customer service and fast turn-around should all be considered when working to negotiate an optimal cost-plus pricing structure.  Too often the customer views only the product cost as the base line number for the negotiation on profit margin, without considering the cost of the infrastructure needed to satisfy the often-demanding customer service needs of the end users.  On the other side of the table, vendors prefer to lean towards value-based pricing which puts more weight on perception of product and service value rather than the actual costs associated with delivering orders on time and under budget.  After all, placing a dollar value on exceptional service is tricky business indeed.

However, only when a mutual understanding and final agreement is reached on the baseline cost of delivering that final product can a fair profit margin be negotiated.  This margin can be applied to all purchases, and the procurement team can feel confident that less-experienced buyers within the organization will enjoy the benefits of a well-designed pricing program. Once this happens, the buyer/vendor partnership can grow and thrive on a model that is based on transparency and mutual gain.

Note to buyers:  cost-plus pricing is a good thing only with a full understanding of the vendor costs to deliver the product and service your audience deserves, and your budget demands

Note to vendors:  cost-plus pricing is only scary if you haven’t been able to quantify the true costs of delivering quality product in a timely manner, with a customer service approach that exceeds customer expectations

Cost-plus pricing is not as simple as it may seem, but it’s worth the effort to figure it out!

On-line company stores featuring corporate branded merchandise don’t have to be limited to a stocking program solution.   For many corporate partners, a web store with virtual images of pre-selected logo products that are not stocked on a warehouse shelf is a better answer for managing the purchase and distribution of promotional merchandise.

When does it makes sense to forego the inventory investment and build a non-stocking program that offers the buyer the opportunity to shop multiple product choices, but includes production lead times?  Every corporate customer has different needs, but below are a few tips to help guide the discussion.

When the buying habits point to:

• Corporate purchasing structure that allows for regional discretion on product choices
• Large quantity purchases a few times a year rather than smaller purchases on a regular basis
• Buyer needs that drive constantly changing product selections, instead of repeated investment in the same pen, mug or writing journal
• Apparel purchases that require some type of customization (department name, employee name, etc)
• Seasonal purchasing habits
• Fewer than five promotional product purchases per week

When considering this option, it’s also  important to note that non-stocking programs don’t offer the same convenience as fulfillment programs.  Production lead times that, even with the most innovative and responsive vendors, cannot meet a same-day, or next day, delivery deadine.  Also, product manufacturers require a minimum quantity purchase for branded merchandise, which may be higher than the buyer needs for a particular event.  However, for many companies the possible drawbacks are less important than the advantage of offering a program that can feature more creative product choices and doesn’t carry the risk of inventory obsolescence.

In the final analysis, many companies don’t fall squarely into a single category.  With the help of an experienced vendor partner, a well-designed corporate promotional products program can incorporate both stock and non-stock merchandise selections to ensure the buyer needs are met, while protecting the budget requirements.

One of the most important questions with new and existing customers is the decision of when to implement (or eliminate) a promotional products stocking program.  Over the next few weeks, I will explore the question of when it makes sense to stock pre-decorated items in a supplier warehouse for on-demand shipping, and when it’s better to shop, and purchase, these products as they are needed.

Promotional products fulfillment programs are designed to increase customer service and reduce product demand uncertainty. And, while it’s tempting to consider the annual corporate spend on branded merchandise as an easy guide to answer this question, I would argue that even when that figure points to a stock and ship solution, careful analysis of the following considerations will often change the size and scope of that program.  A few of the key indicators for consideration of a stocking program:

• Different corporate buyers repeatedly purchase the same type of promotional product for marketing events
• Quantity of product needed is often below the standard vendor minimums for on-demand production, resulting in over-buying, over-budget
• Decentralized purchasing structure that opens the door for duplication of vendor service charges and employee time squandered on tasks not associated with their assigned duties
• Employee uniform program requires implementation expertise
• Logo standards are being neglected

Both the customer and the vendor have important reasons to build a multi-dimensional program model that successfully services the end users.  There are many on-line tools and logistics solutions that can be combined to meet the unique needs of the individual corporate customer, such as tiered pricing structures, multi-location budget management, and creative distribution options.

When the above criteria for analyzing the value of a stocking program applies, it follows that a professionally managed fulfillment program makes sense.  But what about the corporate customer who uses branded merchandise as part of their overall marketing strategy, but doesn’t fit this model?   I’ll explore the various reasons to shop vs stock in next Monday’s blog!

Attributed to the management guru Peter Drucker, the maxim “What gets measured gets done” is more than a saying … it’s a basic business truth.  Fortunately, for companies that invest in loyalty or incentive programs, they are among the most measurable forms of business expenditure.

Managers should begin the process of building an incentive program by asking, and aswering, some basic questions:

1. What program metrics are in place now? (they should be specific, measurable and relevant to your audience)
2. What is the value proposition for the customer? for the organization? (work for a balance between your company and your target audience)
3. How do we track the program’s costs? (can be as simple as an Excel spreadsheet, or a more sophisticated data analysis process, depending on the nature of the program)
4. What reporting tools will be used to measure the program’s performance?  (increasingly captured through web-based programs, be sure the process is documented and all stakeholders are trained)
5. How will we measure the incremental return from the program?  (returns can be measured in tangible gains, like increased revenue … or intangible progress, such as improved employee morale)

The due diligence required to answer these 5 questions before a program launches is not the “fun” part, and short cuts are tempting. However, if you’re a believer in the adage “what gets measured gets done”, the up-front investment of time will pay dividends of a more profitable and effective program