Waiting to Exhale

This is the Week before the Week--a chance to shake off the eggnog hangovers and prepare for the PPAI Expo that begins in Vegas on 1/14. The uncertainty in the marketplace is thicker than Christmas Ham and I for one want to get a sense of the Zeitgeist before we get to the desert.

The list of Questions is much longer than the list of Answers, but here are some I'm asking:

• What's the mood in the Corporate community with regard to our business? Are we still on the radar? To what extent?
• Will we get another answer other than "I don't know" to just about every question we ask about the business?
• Will the Promotional Products Community (aka "The Savior") take to the new PPAI Branded Products pavillion? Will we indeed get to speak with those resellers that "get it"?
• Will any other suppliers decide "the view isn't worth the climb" and exit or re-position their effort in our market?

I for one believe in the viability of our value proposition and think that while we will most certainly be challenged this year we will also have ongoing opportunity. I've done some thinking on the market in general, and I've come to the opinion that everyone's business is comprised of three pieces:

1) The Service Award Business--stable, relatively predictable in a macro sense. While Service Award Provider X's business might go up or down it's mostly because they lose key End Users, and Service Award Provider Y's business increases as the business moves from X to Y.
2) The Attainment-based Incentive Business--less stable than Service Awards, more tied to overall economic conditions. We may be well placed in Incentive Program "A" but if the employees/customers of "A" don't hit their targets nothing gets selected.
3) The "One-Off" Business--highly volatile, subject to expectations of corporate well-being and the first things to get cut in a downturn. This business dried up in a material way in 4Q and there's nothing to suggest that it will return to 2008 levels any time soon.

Depending on the mix of the three pieces, 2009 may be challenging, very challenging, or Oh My God challenging. If your company sells a lot of Service Awards and not much else, 2009 might not be all that different from 2008. But if you sell lots of "One-Off" programs (like the casino incentives that we all sell) things may be very different this year.

But opportunity is there, and will continue to be there. While I don't subscribe to the old saw that our business is "recession-proof" I do believe it's "recession-resistant" and some markets that are contrary to overall economic conditions may do well enough to make up for some that aren't.

It's gonna take creativity and more awareness of trends in the market--"Knowledge is Power" will take on a profundity in the next 12-18 months it's never had before. And having some sense of when the business "turns" (and how much it "turns") may determine your 2009 success more than anything else.

So, engage yourself in the market, network with your peers, and get your heads up and see what's going on. PPAI will give us our first glimpse at the New Reality--but we can't take it as the be-all and end-all of indicators. We often speak about how convivial our business is--I propose that we be more convivial than ever and share the good news (and there WILL be good news) with the market as a whole so we can "clone" the success.

See you in Vegas...


Pete