Procurement Strategies For Promotional Products

In the world of procurement, the office supplies category is one of the more common ones that procurement managers often encounter. With the sheer volume of office supplies consumed by corporations, and with the numerous large suppliers that provide a myriad of options, this fact is not at all surprising. But there is another, less common category that is often associated with office supply companies – the promotional products category. As companies continually look for ways to grow their brands and to provide employee incentives, recent reporting indicates that the growing use of promotional products will be a factor. While there are definitely similarities between these two categories, there are also some key features of the promotional products category that can pose unique challenges in the supplier management process. Given these unique features, in addition to solid general strategies that apply across many procurement categories, there are also specific key strategies that can assist in creating a strong procurement process for this less common category.

Key Components In The Promotional Products Category

When starting to develop a procurement strategy and process for a promotional products account, you will likely notice the common elements it may share with a typical office supplies account… large-quantity purchases of small and inexpensive items, wide variety of items, similar products such as pens, paper products, desk supplies, food items, personal items that may be useful in an office setting, etc. But unlike office supplies accounts, promotional products accounts can be much more complex, including such features as the following:

• very detailed customization requirements for promotional items
• competitive pricing that may vary based on brand, customization and specific product requirements
• coordination with company's marketing team, marketing campaigns, target audience and brand image
• time-sensitive, fast-paced needs for products - e.g.,rush deliveries
• a focus on helping clients market and grow their brands to attract customers within the target audience
• a need to consider client’s brand / priorities in products available – e.g., if client has an environment-conscious strategy, then products need to be environment-conscious as well since they’re serving to promote the company and what it stands for
• unusual product requests that may carry additional fees – e.g., an apple-shaped cutting board to promote healthy eating
• decentralized rogue spend, also known as tail spend, ordering as a way of obtaining particular product and delivery needs or preferences
• significant inventory needs
• spend on products outside category under certain circumstances – e.g., large PPE spend during pandemic
• a focus on freight considerations given large-quantity purchases and frequent need for time-sensitive deliveries
• a focus on a very flexible return policy, including returns to inventory for future use

Key Strategies For Effective Promotional Products Procurement

With so many unique features and challenging aspects to promotional products accounts, implementing a procurement program for this category can be daunting. In order to accomplish this goal, here are several key strategies to consider in order to address these unique elements:

• As a client begins to consider the addition of a promotional products account, we assist them with both marketplace research / comparisons and detailed information-gathering within their organization so they can strategically assess their specific needs and see which suppliers might be best equipped to meet them.
• Often a client will add a promotional products contract via an RFP process that we manage for them. In this RFP process, be sure to incorporate specific details and real life examples that address issues around customization, time sensitivity, brand requirements, ease of ordering (e.g., e-commerce), freight, inventory, etc.
• Once the contract is awarded, pay close attention to getting those same issues from the RFP added into the contract with terms that are fair but that also ensure the client’s needs are met. Contract provisions for promotional products accounts should include focus on elements like variable pricing, SLAs that capture quality and timeliness needs, and both short-term immediate needs and long-term strategic considerations.
• In the contract phase, depending on the client’s needs, it might be beneficial to set a provision for the main supplier to handle most needs but have the client reserve the right to use another supplier under limited circumstances when special product, customization or timing requirements come into play.
• Once the contract has been finalized and the promotional products account is active, use the specific provisions tailored to the unique facets of the account to help develop a robust procurement management plan. Ensure that the plan encompasses standard elements like monitoring price compliance but also puts definitive focus on the unique elements – e.g., detailed freight and inventory analyses, checks on customer satisfaction with customization and branding, etc.
• As part of creating a robust procurement management plan, make sure both client and supplier understand ideal “rules of the game” for most effective use of the account – e.g., no “rogue spend”, keeping deadlines as reasonable as possible, etc. A good way to effectively communicate this to your supplier is through supplier / vendor onboarding, in which you provide the supplier with very specific instructions and expectations.
• Given the complexities in the promotional products category, analyze procurement management results with focus on details that might not apply quite as much in other categories – e.g., spend fluctuations, marketing budget, inventory levels and maintenance, success of campaigns / events, etc.
• As you implement your procurement management plan, be sure to communicate customer satisfaction issues and performance results frequently and in detail. Make sure unique requirements, support team tasks, timelines, and provisions are continually in focus and taken into account.

By adding these key strategies into your playbook, you can help your client make the most effective use of their account and ensure that they can meet and exceed their goals in incorporating promotional products into their game plan.

Summary

The market for promotional items in business is growing, and with it comes the need for strong, effective procurement programs to manage clients’ accounts of this type. With so many unique features and extra considerations, developing and maintaining a successful procurement program in this category can be complicated. But with the key strategies presented here, procurement managers can optimize a client’s experience with their promotional products account in a way that allows them to take full advantage of the benefits such products can offer while still getting the most for their time and money.