While terms like “systems integration” and “supply chain efficiency” have long been catchphrases in the distribution and fulfillment side of business, now they’re cropping up in promotion circles as that logistics mentality migrates to more marketers.
PROMO spoke with several in the industry who are leveraging its power to fulfill promotional products in fresh ways. As a consequence, they are more closely tailoring rewards and enhancing customers’ experience— delivering faster and more cheaply.
Companies of all sizes are feeling renewed pressure to improve their fulfillment performance while tightening budgets (see Chart).
One approach is allowing a single agency to handle many tasks for a client. Last year, Pfizer Pharmaceuticals wanted a swift launch of an over-the-counter version of Zantac 150. The company needed to integrate the fulfillment of a wide range of its promotional products, and turned to marketing and fulfillment services agency The Jay Group to coordinate the transition. The Ronks, PA-based agency acquired a 270,000-sq. ft. facility in Elizabethtown, PA, for warehousing and production, and installed real-time order processing, inventory control, and distribution systems to enable timely delivery to the customer.
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| Dana Chryst |
“You’re talking about something that goes far beyond fulfillment,” said Dana Chryst, CEO of The Jay Group. “We consider ourselves marketing logistics partners. We procure and control the supply chain of all the component parts of a promotion— premium, the display, the shrink film of a specialty item, designing and launching a promotional Web site, handling the transport logistics. We are sensitive to the marketing calendar, to the whole brand. Every touch point in the marketing supply chain is a critical touch point for the consumer.”
Jay Group accelerated the printing process and ran triple shifts for a month to assemble 118,000 displays and promotional kits, which included 2.4 million cartons of Zantac 150. The kits were then delivered quickly to wholesale club stores, discount stores and pharmacies nationwide.
Chryst noted that the call center is an important part of the integrated promotional supply chain. “Every call has to be handled carefully,” she said. “We choose reps based on the brand. If you represent a brand, you have to live and breathe that brand.”
For Pfizer, in-depth product training for phone reps was a top concern. In other instances, hirees bring that knowledge with them. For example, when Jay Group ran phone support for Reebok sport shoes, it hired staff who had a background as personal trainers to represent the sneaker line.
Fulfilling expectations
It comes back to the customer’s experience of the brand through the fulfillment process. “Exactly how does each product look when customers open it up? What is the order in which items appear?” asked Mark Yokoyama, marketing director for ePromos.com, a New York City-based promotional products distributor.
The company fulfills both physical products and electronic premiums, such as USB flash cards preloaded with the client’s information. Customers have their own accounts and can log in and browse for various products. ePromos, whose clients include the internal company stores of Barclays and UBS, operates a warehouse in London that serves clients in Europe.
Brand-enhancing fulfillment must be affordable to the client, Yokoyama said, and it must be set up so that orders can be processed quickly. ePromos processes most orders the same day and guarantees shipment of the right product to the right place at the right time— your money back, plus a 10% credit toward the next order.
Its not just the clients who are each upping the ante for delivery. “People have grown to require instant gratification. When you reward them, they want something right away,” said Jill Ambrose, VP-marketing for Seattle-based GiftCertificates.com. “One of the challenges in fulfillment is that if you don’t deliver immediately, it can actually have a negative effect.”
The advantage of gift certificates, which the company provides to 20,000 corporate customers and more than 2 million consumers, is that they can be mailed, hand-delivered or downloaded online. GiftCertificate.com’s SuperCertificate, which can be customized with logos and personal messages, allows recipients to redeem it online for it any other merchandise certificate available (for example, at Macy’s or Blockbuster) and get it delivered to them right away.
Ambrose said that based on customer feedback showing that clients complained the most about not getting what they wanted on time, the company restructured its fulfillment operation, raising its on-time shipping rate to 99.5%. “If you have a captive audience, you can go a little longer without fulfilling the product,” she said. “But if you’re using the product to motivate, eventually they won’t be motivated by it. Customers today have so many choices, and if fulfillment is part of your marketing program and you don’t deliver, the brand’s reputation will be tarnished. Every touch point that you have with your customer is a brand experience, and it must be exactly as you defined it would be.”
For several of these innovators, technology is the driver. Marketers should “apply the concept of supply chain management to promotion,” said Marshall Mermell, president of marketing services agency Marketing Works, Cold Spring, NY. The key is combining fulfillment with emerging tools such as “cyber libraries,” or advanced electronic databases.
“Using a cyber-library and a one-to-one marketing tool, I could conceivably send you a promotional item that looks the same as the one I have, but its copy and messages are specifically tailored to you,” Mermell said. “It’s a highly customized, highly targeted, one-to-one, supply chain-based approach that helps you get to market quicker, manage your market more effectively, and target your product to a segment of one.”
Mermell conceded that the concept of one-to-one promotional fulfillment isn’t new. He cites as an example General Motors’ brochure campaign some 15 years ago, which let customers build the Buick of their dreams. The hugely successful campaign sold 19,000 more customized cars and lowered GM’s marketing costs from $600 to $300 per car.
Although the campaign later fell by the wayside, the one-to-one technique remains in use, particularly by banks and financial institutions. “It generates such a high return that it’s a competitive advantage, and no one wants to talk about it,” Mermell said. “In the last 10 to 15 years, we have been integrating that type of technology with a cyber library that can allow you to manage the actual inventory and deliverability.”
Customized fulfillment doesn’t come cheap— to $13 per unit versus a standard direct mail cost of about $1.50 per piece— far fewer units need to be dropped, and the return on investment far outweighs the cost.
Mermell is a founder of the Customer Creation Coalition (CCC). The group has scheduled a seminar on “21st Century Marketing Technologies” for July 20 at the Holiday Inn and Conference Center in Fishkill, NY. The agenda focuses on new approaches to marketing, drawing from the best of logistics, fulfillment, and supply chain management. (For more information visit
Customercreationcoalition.com
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