And now, a word from our Guest Blogger

I'm pleased to share with you a note I got the other day from Steve Slagle, President of PPAI. He read my blog entry on Coach, and was moved to comment. To wit:

Pete, you seem a little lonely on your blog, so I thought I'd weigh in with a thought or two just so you'll have some company.

Like you, we at PPAI are eager to learn what's up with Coach, and not just because they are an important member and an exhibitor at our Expo. They have been a leader in many respects for other "branded product" companies to work within the distributor channel, and we'd hate to see that change.

Interestingly, we have more than 100 "branded product" companies (meaning they have retail brand recognition and value) exhibiting at the PPAI Expo now, either under their own banner or under someone else's, and they've all become valuable to the distributor channel. We believe Coach and others have found the distribution network in promotional products to be important because the distributor companies and their promotional consultants have an increasing number of clients who are asking for the brands. The demand is being client driven as much as anything, and promotional consultants are learning and have learned how to source the brands and to position them with their clients.

I agree with you that everyone would be well advised to recognize the value of the distributor companies, as many incentive reps have done, and to figure out ways to make working with the brands a bit easier. And, I don't mean giving more margin.

PPAI has a big stake in the success of the brand companies working in this marketplace, and we'll certainly do our best to make their lives, the incentive reps' lives and the promotional consultants' lives as easy as we can.

Good luck to Coach and their special markets leaders! PPAI needs them, the market needs them and the clients need them.

Steve

Sage words indeed. Feel free to become a Guest Blogger--there's plenty of space...


Pete

As Keanu Reeves might say...

Whoa....

I've been in this market a little less than 20 years. Enough to become a little jaded at what suppliers say or do to create "buzz" about their company's Special Markets efforts. And long enough to figure I'd seen about everything. And then Wednesday happened.

I got three phone calls in the space of a half hour--all saying that Coach has put its Corporate Markets business "under review" and that they were no longer accepting purchase orders.

Whoa.

By just about any measurement, Coach is a Shining Star in our business. Visible in the trade groups, managed by experienced professionals, a charter supporter of the Forum for People Performance Management and Measurement. What on Earth could cause them to take a stand like this?

In the two days since Wednesday, I've heard all manner of conjecture about the situation. And it runs the gamut from "Coach doesn't want to be in our business at all" to "Coach is trying to redefine the way program recipients receive product" to "Someone in Coach's hierarchy doesn't like them being in the market and wants them out".

I'm a Coach customer--they are part of Laureate, my online giftcard concept. So I had more than a little interest to know what was happening. I know no more than most of you. It is an unprecedented event as far as I can remember--a leading company deciding to suspend its efforts in our market pending a "review".

And while I don't know what will happen, I do know this--the market is abuzz. If they wanted people to talk about them, they've succeeded beyond their wildest dreams. Customers are wondering when (or if) they'll get product shipped. Reps are wondering what kind of company they'll be selling for (IF they're selling for them).

I even heard a description of the "nuclear option"--a complete closing of the Special Markets business. This scares me in a material way, because if Coach can walk away, as successful as they appear to be, what's stopping others from doing so?

Whoa.....


Pete

When is a Brand not a Brand?

As most people in the market know, the National Sales Manager position at A.T. Cross is open. The company has begun the search for Vilia Johnson's replacement with ads on their website and at monster.com. This process is fascinating for several reasons, not the least of which is the unique challenge that Cross faces in selecting the "right" person.

Unlike most Brands, Cross is a highly visible player in the Promotional Products business. They have been that way for decades, going way back to Tim Carroll and even further beyond my time. Their presence with traditional "Incentive" accounts is challenged, and some major clients don't even do business with them in a material way.

So, what will the winning candidate look like? Do they find the Incentive Professional and hope that person learns the Promotional Products business? Or do they find someone versant in the PP market and hope that person can learn Branding?

There is also the subject of Cross' changing Brand image. Their VP of Global Branding comes from Tumi and Cross, and will re-invent Cross to the consumer over time. Will that mean they will value a person who's comfortable with Branding more that someone who's welcome at Jack Nadel? It's a tough decision, and the person they pick will tell us volumes about how they plan to approach the Special Markets segment for the near-to-medium term.

It's going to be very interesting--they need a Brand-savvy person with expertise and presence in the PP market. The list of potential candidates is VERY short, and most of those people are ensconced in pretty high-profile positions and/or not interested in moving to Rhode Island.

Stay tuned--it should be entertaining...

The size of the business, round 35

We're always trying to determine the size of the market. We employ statisticians, educated guesses, and benchmark Cutter & Buck, the only company (that I know) that states in its SEC filings the percentage of its total business (44.9% in 2005) done by its Corporate Division.

To that end, consider this quote:

"Everybody lies about their numbers. Almost every year I want to abandon our survey [of the industry]. It's a lot of work for an estimate."


Who said that? PPAI? IMA? ASI? The Forum for People Performance Management and Measurement?


No. It was Paul Fishbein. Publisher of....Adult Video News, in response to a question about the size of the Porn business.

Looks like we're not alone in trying to figure out the size of the playing field. And contrary to some views, Size DOES matter--it adds legitimacy and relative importance to what we do for a living. Or, it takes it away.

Fishbein goes on to say that the vast majority of companies that produce pornographic content are privately held—and have little incentive to accurately report their earnings. Wouldn't that describe most of the Promotional Products Suppliers? And the Brands bury their Special Markets numbers in other Divisions' reporting, so there's no clear picture there either.

Who would have thought we have so much in common with the Porn business?


Pete

I'll take it from here, thanks...

A year or so ago I decided to establish Special Markets Diablogs as a forum for ideas and discussion about our market and issues relevant to it. As you can see from the prior postings, there hasn't been a lot of enthusiasm about it.

Part of the reason is that people don't want to "leave tracks"--they don't want to be "on the record" about potentially controversial subjects. I understand that and appreciate the concern. But as the Resident Bomb-Thrower of Special Markets Dialogues, I consider it a moral imperative to continue throwing Bombs.

So, I've decided to continue the site, but only as a forum for my own rantings. And since no less a market Icon than Gene Geiger considers me a "whack job" I owe it to him to validate his assessment. Sorry, Gene--if you ever see this you know I took it as a term of endearment even if you didn't mean it that way...

And now, on with the Bomb-Throwing:

• The New New York Incentive/Brand/Motivation Show is off to a flying start--I'm told more than 75% of the booths are sold and the organizers are hoping for 1000-1500 attendees. Hurray for them. And contrary to what I heard in the Rumor Mill, resellers ARE invited--it's the opinion of the organizers that the nature of the show will not attract any resellers that don't value brands.
• Mike Unger left Hoover after several years in the Special Markets Chair. There are no specific plans to replace him as yet--Hoover was sold to Royal and Mike tells me that Royal, not Hoover, will determine how they continue to approach our market. Look for an MRC to take it because Hoover has other fish to fry.
• If any of you are looking for a job--the AT Cross position is open. Cross' website has the posting, as does monster.com. Vilia Johnson's shoes will be difficult to fill--as Cross needs someone who understands the Promotional Products Market AND can satisfy the new EVP Marketing's need for someone who's Brand-savvy. That's a short list.
• I detect a bit of Brand-snobbery these days about the Promotional Products business. Yeah, yeah I know--there are 20,000 of them and only 5 "get it", but that's simply not true. Do we really know how much Branded stuff is being bought by PP distributors outside the "sanctioned" channels? I had a chat the other day with a distributor who was seeking Apple's approval to put a client logo on iPods. Did the distributor buy said iPods from Incentive Concepts? Please. He bought them from another authorized Apple reseller. How much business is evaporating because the PP community finds the Special Markets Divisions of Branded products companies too difficult, too arrogant, or too expensive to deal with?
• And on that note-I challenge anyone to give me 25 good-sized "Incentive" accounts that are not primarily focused on Promotional Products. I can get to 10, and then it gets difficult. Face it--if there ever was a "war", it's over--and "they" won. We either learn to speak their language or we face the possibility of becoming irrelevant.

Expect more of this on a pretty much ongoing basis. Feel free to weigh in, or not--I respect your decision regardless. Or just pick up the phone and call me--I'm happy to bat this back and forth. I promise to keep anybody's ID confidential, but I do reserve the right to use our chats as fodder for future musings.

Enjoy...

Pete