No.  Neither for customer relations nor employee relations does money serve as the best motivator.  An exception to this is cents-off coupons and cash rebates on large consumer purchases.  However, in terms of customer relations, a gift of money is often perceived to be a kickback or bribe.  Such behavior is neither ethical nor effective in building a good working relationship. 

            While cash for employees does not have that stigma, it still has major problems as an effective motivator.  According to business consultant Donna Deprose in the American Management Association’s book How to Recognize and Reward Employees money’s success as a motivator of employees is erratic at best.  She states that as a motivator money has three strikes against it:

            “1.  Its impact is short lived.  Most major financial rewards come annually, and the effect wears off long before the year is out.  A nice bonus or a big raise may inspire a spurt of activity from a grateful employee, but once the bonus is spent or living expenses swell to meet the raise (as they always do), the reward and its motivational value become history.

            “2.  What starts out as a reward for exceptional performance tends to become perceived as an entitlement.  A bonus or an unusually large raise is special the first time, maybe even the second time, but after that the recipient comes to expect it as part of business as usual.

            “ 3. When people are paid to do specific tasks, the money tends to supplant intrinsic motivation.  People often do extra work for the pure enjoyment of performing the task, the satisfaction of solving a problem, or the excitement of confronting a challenge.  But when they know they will get a bonus or incentive compensation for performing this work, they will perceive themselves as doing it for the money rather than for the intrinsic, more sustaining motivation.”

            She goes on to point out that while having more money is not necessarily a motivator for employees, the absence of money can be a demotivator.  What typically motivates employees to maintain and improve performance depends on how their personal needs are being satisfied.  On the job these needs typically center around security, socialization, esteem, achievement, power or some combination of them.  For example, the desire for recognition, rewards and ego satisfaction are all related to one or more of these basic needs.

            Note that because of their powerful symbolic value, promotional products and tangible incentive awards readily adapt to most of these needs.  For example, programs which recognize and honor long-time service and stress the importance of the organization as a team tend to add to feelings of security in the workplace. 

            Similarly, being part of a team that works together and shares values is a major part of employees’ socialization need.  Thus wearables that identify group members and incentives that encourage working together can add greatly to employees’ sense of belonging. 

            Esteem is closely tied to recognition, so all programs which provide recognition to employees apply directly to this need.

            Achievement needs are directly addressed in virtually all individual and group incentive programs that encourage and reward achieving worthwhile company objectives.

            Power needs are similarly addressed when promotion and incentive programs are designed to help employees feel empowered through reaping more rewards on the job.

            When all of these needs are successfully addressed, the company works better and profitability tends to be higher.  This, in turn adds to employees’ feelings of security, belonging, esteem, achievement and power.

            Granted, promotional products are no substitute for good management and good communication.  They merely multiply the effects of good management and good communication by motivating people to do desirable things they might not have done otherwise.

            Finally, using promotional products as incentives avoids a tremendous potential problem that is inherent in using monetary incentives.  When cash incentives are discontinued, employees can perceive the move as a pay cut.  This perception serves as a disincentive to do good work.  If this happens the organization is in the unfortunate position of the cash incentive being taken for granted and its discontinuation being perceived as an insult.

            Employees often report a preference for receiving money.  However, this desire does not translate into optimal motivation power as much as management’s spending the same amount of money on promotional products incentive programs.  Here is why.

Why Use Tangible Incentives Instead of Cash

            Promotional Products offer many advantages over cash when used in incentive programs.  For example, tangible incentives and reinforcers are:

• Identifiable as a reward for extraordinary behavior.  Cash, on the other hand, is a satisfier, more than a motivator.

• Positively associated.  Gifts have a celebration connotation while cash is usually thought of in terms of paying bills, buying necessities and covering obligations.

• Guilt free.  Recipients can enjoy their gifts without having to make the tradeoff of postponing a payment elsewhere.

• Symbols of success.  While cash bonuses are generally dumped into the household budget, tangible rewards are used and displayed with pride.

• Reinforcers of the pride of achievement.  When people view and show tangible awards they have won, the pride of achievement is strengthened and shared.

• Goal oriented.  When a participant focuses on a particular prize to earn, the goal becomes more motivating. 

• Less “fractionalized.”  If one’s goal is a leather briefcase, getting almost to that prize level does not deliver the prize, so the participant is encouraged to perform better to get it.  Cash, on the other hand, is easily fractionalized.

• Easier to promote.  Specific gifts and prize are easier to promote due to their human interest value.  Their picture and handling value tie in well with program themes.

• Wholesale.  You can’t buy cash wholesale.  Thus, tangible products have a higher perceived value than what they actually cost the customer.

• Lasting.  The value and pride of tangible products usually lasts for many years.

• Involving.  Beyond personal involvement, catalog programs and family-based incentives can involve entire families in encouraging the performance needed to earn a particular award.

• Unconnected to pay and price issues.  Monetary rewards beg the question of simply paying more or lowering prices permanently.  Tangible incentives are much more distant from that line of thinking.

• More bragging value.  It is acceptable to show off a prize.  It is less so to show off receiving money.  That is why people enjoy bragging about their new cars, but not about their paychecks.

• Something different.  Tangible incentives are typically out of the ordinary, often even glamorous.  More money is more of the same.

• Cash flow friendly.  Sponsors pay for earned tangible rewards when they are redeemed.  This means the payments are made after the desired performance has been delivered and the benefits received.  Cash is generally paid out all along.

• Redemption friendly.  In award programs there is always some slippage–i.e., non-redemption due to small amounts of points left over after redeeming for prizes, or lost and forgotten points.  This either can save the sponsor around 10% of the total cost of prizes or the prizes can be about 10% more expensive without an increase in the total allocation.

• Not a demotivator.  The termination of cash incentives after they are taken for granted tends to decrease motivation.

http://www.freepromotips.com/library/industry-commentary/562-cpsia-compliance-this-is-just-a-bit-alarmingyah-think.

A recent report came over the Dow Jones Newswires that explains how memory chip pricing is unstable and how the production is being affected.

HONG KONG -(Dow Jones)- Memory-chip prices are surging on the spot market early Monday following the earthquake in Japan in a sign investors and companies are concerned about potential supply shortages.

According to DRAMeXchange, Asia’s biggest spot market for chips, the average spot price of the most widely used dynamic random access memory chip surged 6.7% to 96 cents early Monday compared with late Friday, while other chips were quoted as rising between 5.5% and 6.8%.

DRAM chips are most widely used in personal computers.

Meanwhile, the average spot price of a 16-gigabit NAND flash memory chip rose 12.5% to $4.50 early Monday compared with late Friday, DRAMeXchange data showed.

According to market research firm Objective Analysis, more than 40% of the world’s NAND flash and roughly 15% of the world’s DRAM chips are manufactured in Japan.

What this means for us in the promotional marketing industry is that the supply will be lower and or the unit price will be higher. How much higher you ask? No one knows but most of my sources are quoting prices for no longer than a week at a time and some are not even committing to that. We do have our finger on the issue and can find you the best deals.

Check with us first.

PPAI L.E.A.D. Initiative Heightens Awareness in Support of Promotional Products Industry Stakeholders
Promotional Products Association International (PPAI) L.E.A.D. promotes awareness of important communications strategies in support of promotional products industry, buyers and end-users, Washington, D.C., March 30-31, 2011
March 15, 2011 Promotional Products Association International (PPAI), Irving, Texas, the not-for-profit association for more than 8,000 members of the $16 billion promotional products industry, continues its ongoing work to educate federal agencies through its Legislative Education and Action Day (L.E.A.D.). PPAI and its members will share with legislators and staffers important communications strategies and the merits of promotional products as a sustainable part of, and vital tool in the delivery of government programming and services in Washington, D.C., March 30-31, 2011.

Promotional products are an integral part of daily life and frequently serve as both effective advertising and useful tools for home, work or recreation. Many federal agencies rely on promotional products to communicate the availability of essential services to hard-to-reach groups. Promotional products extend the reach of federal programs that utilize integrated marketing campaigns to reach those who need services the most.

“We are grateful to our legislators, membership and constituents nationwide for their support in this effort. The PPAI Legislative Education and Action Day (L.E.A.D.) supports the strategic use of the services and products provided by its members in the good work of federal agencies to assure essential services are communicated and delivered to those who need them the most,” said Steve Slagle, CAE, PPAI president and CEO.

The annual L.E.A.D., the Legislative Education and Action Day, will be held March 30-31, 2011 in Washington, D.C. and is organized to allow promotional products professionals the chance to educate Congress on industry-critical issues as well as the power, impact and job-generating value of promotional products. The event will include visits to more than 80 representatives of the Senate and House from 25 states. In addition to this Federal initiative, PPAI provides members law alerts and the necessary tools and strategies for successful meetings with local government as well. To learn more about PPAI’s government relations efforts, visit www.ppailaw.org.

Pens to Promotions
Historically people have recorded and conveyed thoughts, feelings and the mundane minutia of everyday life through their use of writing instruments. From the time cave men scratched pictures on the walls of caves with stone- sharpened tools to astronaut’s pens that write in outer space, man has used a writing instrument either crude or refined to communicate.

The earliest means of writing that approached today’s pen and paper was developed by the Greeks, who employed a writing stylus, made of metal, bone or ivory, to place marks upon wax-coated tablets. Other cultures developed inks from natural dyes and the Chinese invented and perfected ‘Indian Ink’. Ink invention paralleled the creation of papyrus and then parchment. Parchment promoted Roman inventors to convert bamboo stems into primitive fountain pens with a nib or point – squeezing the reed forced the fluid to the nib.

The quill pen, made from a bird feather, was introduced around 700 AD and would dominate writing for the longest period of time – over 1,000 years. Left wing feathers, which curved outward and away, were favored by right-handed writers with goose feathers being the most common. Swan feathers were of a premium grade and crow feathers were the best for making fine lines. The average quill pen lasted about a week and was sharpened with a special knife – origin of the term ‘pen knife’.

In 1884 Louis Waterman, inspired to improve early fountain pens after destroying a valuable sales contract with leaky-pen ink, patented the first practical fountain pen. Early inks caused steel nibs to quickly corrode, they were replaced by gold, which proved to be too soft alone. So gold nibs with iridium tips became the standard. Because it took about 4 months to break in a new one, people did not tend to loan their fountain pens to anyone. To this day fountain pens command a special cache as a personal accessory and are often used as an upscale recognition or promotional piece.

But the undisputed king of the promotional world, the number two most utilized promotional item, was about to be invented. In 1938 Laszlo Biro invented the first ballpoint pen after observing how quickly the ink used for newspaper printing dried leaving the paper smudge-free. Because this thicker ink would not flow through a regular pen nib, he fitted his pen with a tiny ball bearing, which rotated picking up ink from the ink cartridge and leaving it on the paper. The British Government for the war effort purchased Biro’s patent licensing rights and as they say the rest is history.

In the early 1950s, a French Baron named Bich dropped the h from his name, started a company called BIC® and began selling pens. By the late 1950’s BIC® held 70% of the European market. BIC® went on to purchase Waterman® Pens and today the highly popular modern version of Laszlo Biro’s pen, the BIC Cristal® is a part of the permanent collections of the Museum of Modern Art of New York (MOMA), at the Department of Architecture and Design. In 2005, BIC® sold its hundred billionth ballpoint pen*. (*statistic from www.bicworld.com)

Along the way, the pen became the second most popular type of promotional merchandise. The lowly ballpoint has been molded and shaped in amazing ways by the creative minds of promotional merchandise suppliers. It pulses, attaches to a carabineer, is in a bottle or a penhouse, is a baseball bat, wears a non-profit ribbon and unsnaps to fold flat for mailing. And for those movers and shakers on the run, it even attaches to your cell phone – because while you always have something to write on (even if it is yourself) you always need something to write with!

Whether it is around your neck at work or a trade show, proudly displayed as a remembrance of past accomplishments or events, or given to you at a bank or charity event to sign a check, the pen in all its forms has possibility. So, the next time you set down to map out your marketing strategy, look at the item in your hand and consider contacting a promotional merchandise consultant to make it a part of your campaign.

By: MaryAnne Morrill, Brilliant Publishing

Nine Ways to Fall in Love with Your E-Mail Marketing

When it comes to e-mail marketing, the last thing you need is for your customers to take you for granted. As memories of the holidays fade, it’s time to rekindle the passion between you and your customers. Reigniting this passion is even more critical now that Internet service providers are looking at engagement – open and click-through rates – as a major factor in deliverability. In the spirit of Valentine’s Day, following are nine ways to connect with your customers through every stage of the relationship:

• Ask them out. Make sure you have the permission of your customers by using the gold standard of a double opt-in. You wouldn’t show up at a stranger’s door for a date, so don’t show up uninvited in their inbox.

• Flirt a little. When prospective customers opt in, you don’t want to bombard them with too many offers immediately. If you come on too strong, you might scare customers away.

• Wine and dine. Present your best offers early on in the marketing sequence. We all dress up a little more for a first or second date than we do for a 10th date, and the same is true for e-mail marketing. Put your best foot forward by sending your best deals and promotions up front.

• Avoid being clingy. When the infatuation inevitably wanes, position yourself for a long-term relationship by presenting personalized offers, allowing them to adjust mailing frequency to their preferences. Don’t abuse the relationship by being clingy; instead, be reliable yet respectful of their privacy.

• Delight them by doing something special for no reason at all. Your customers know you’re in business to make money, so when you give something to them with no obligation, they will take notice.

• Surprise them with a very personalized offer. The best performing e-mail campaigns are ones that speak directly to your customers’ individual needs. In the consumer space, major online retailers have had great success with e-mails targeted to consumers who abandoned purchases with items in their virtual shopping carts. The best results originate with e-mails featuring the shopping cart item that are sent three to six hours after abandonment. Business-to-business marketers can re-engage by messaging clients who were viewing their whitepaper library but did not download a whitepaper.

• Remember your anniversary. Thank your customers on the one-year or six-month anniversary of their first purchase. Make sure the promo is tailored to their past purchases and is not just a general offer.

• Give them a chance to talk. Create a short, simple survey to let them tell you honestly what they think of your relationship. Do they want more space? Is your merchandise in need of a makeover? Are there things you used to do that they miss? Now’s the time to find out the honest truth. Win them over at the end of the survey by offering them a surprise gift.

• Can we still be friends? If a customer is just not in to you, accept it and let her opt out. Thank her for her business, and avoid burying the opt-out link. On the opt-out page, give her the opportunity to “friend” you on Facebook or follow your Twitter feed. If you end the relationship with class, there may be a second chance down the road.
By: John Murphy, President Reachmail

Rhino-Marketing-Specialties

Welcome to “Brandspiration” where brand meets inspiration! This new slogan belongs to the company I’m associated with. Their name is Geiger in case you hadn’t noticed the new logo. I’ve been with them since 2006, after spending 9 years on my own as Rhino Marketing / Forrester-Smith. So in 2012 it I will have been in this business 20 years! Wow that sounds like a long time. But Geiger has been working in promotional products since 1878 and that IS a long time.

Your Brand + Our Creativity = Branspiration

So, is it just hype? No. Is it just another way to package what we already do? Possibly. We are, in fact, the same people we were the day before this Brandspiration thing kicked off. We still have the same services and products that we had B.B. (Before Brandspiration).

We still help our clients market to their customers. We still tell our clients that 83% of respondents remember the advertiser who gave them a promotional product. We still tell them that Promotional Products have a lower CPI (Cost Per Impression) than most media, including TV, magazines and radio. That number by the way is $.005.

I still go to the same office every day. I still interact with my clients and potential clients much the same as I did B.B. I do have cool new business cards, however. It’s still the best business in the world to be a part of and I still enjoy it just as much as I did B.B.

So what’s different about the Brandspiration message? Two things come to mind. First is that these new graphics are way cooler than the old graphics. The smokestack is gone, replaced by something much more fun and alive. It shows what we can do graphically. It’s “festive” as a friend of mine used to call everything he liked.

I feel proud to be a “Brandspirater!” (I borrowed that from a friend).

More importantly, though, it’s a very effective way to deliver our message to you every day about what we do. It says that we are not just selling trinkets and trash, swag, giveaways, novelties or “stuff.” It says that we are more, much more than that. It says that we want to be your branding partner, helping you to be successful in executing your marketing programs.

Now, let’s talk about promoting your business and making 2011 the best year ever!

But let me point out that:
1. If you find a head-up penny, you are in for good luck
2. If you save 100 of them you have a dollar to spend for something of value
3. A good wish can be made at your favorite wishing well and you don’t feel bad tossing in a couple
4. You can make 2 advertising impressions for only one penny

It is that last statement that most likely got your attention. Unless you get a kick out of seeing that cashiers face when you slap 100 pennies on the counter.

You heard right- According to the results of ASI’s exclusive Global Advertising Specialties Impressions Study, Promo products beat other media in terms of return on investment (ROI), at only a half-cent per impression. Thats $.005 per impression.

Here are some fast facts to consider:
The cost-per-impression of a promotional product is half a cent ($.005). Ad specialties deliver a better cost-per-impression than most other media, thats TV, radio, newspapers, billboards. Most traditional advertising is just like the old adage about throwing stuff on the wall and seeing what sticks.

83% in the U.S. study indicated they can identify the advertisier on a promotional item they own.
60% of U.S. respondents indicated that they have done businerss with the advertisier after receiving an item.
41% of U.S. respondents indicated that their opinion of an advertisier was more favorable after receiving a promotional product. Positive impressions are what makes buying decisions happen.
Women prefer writing instruments more than men do, while men favor shirts.
People ages 45-54 own the most promo products.
And consider this when you are thinking about using promotional products in your marketing mix. 62% of respondents in the U.S. said that if they receive an item that they don’t plan to keep, they give the item to someone else. People just don’t like to throw away something tangible and useful.

So consider promotional products in your marketing mix, at $.005 per impression you can really make your marketing dollar go far and be very effective.

As a new feature, I’d like to offer a review of 2010 and a look ahead to 2011 in our world of Promotional Products. I promise this missive to be short and to the point.

The Bad – Product Safety

Product Safety concerns continued to intensify as McDonalds recalled Shrek glasses and more stories of Cadmium and Lead in children’s toys also made headlines. I’ve warned in the past about how few of our suppliers were testing their products ensuring their safety.

I am happy to tell you that more of the larger suppliers are compliant and participating in complete testing programs.  However, in an industry of 3500 suppliers of all shapes and sizes, I can promise you that the percentage of suppliers I truly trust is still small.

Please continue to take this subject seriously and be assured that there is no greater duty I have as your promotional partner than to insure the safety of your employees and clients, their children, and your brand. To quote an old car company slogan: “It’s Job 1″.  I will continue to use the resources of Geiger and The Promotional Products Association International to stay on top of this subject. I will not sell you unsafe products.

The Ugly – Rising Prices

Some of the conditions that are contributing to the safety issue are also contributing to rising prices in China. Estimates have prices rising between 10 and 30%. Labor shortages, the lowest inventories of cotton in years, energy costs, transportation costs, salary mandates, and a world economy easing out of recession are putting pressure on remaining inventories all are contributing to these increases.

Once again, the resources of Geiger allow for monitoring of this situation and gravitation towards the suppliers who are pro-actively building inventories now in anticipation of 2011 needs. Not surprisingly, if they can manage the credit lines to do that, they also are likely the suppliers to be testing for safety as well.

I cannot beat this drum any more loudly. KNOW from whom you are buying, what their infrastructure is all about, and their standing in the Promotional Products world.

I am very glad that I am with the best! 

On to the GOOD!

While the Bad and the Ugly present their challenges, the Good is VERY good indeed.

The Good

While prices may be increasing some, we can now prove how cost effective we are!

For the first time in our industry’s history, ongoing research is beginning to put a spotlight on how important and valuable our medium is to the Advertising/Marketing mix.  Back-up data is available anytime, but here are just 6 fun facts*:

Instant recall: More than 8 out of 10 (84%) respondents remembered the advertisers of the promotional products they’re received.

Very impressionable: 42% of respondents had a MORE favorable impression of an advertiser after receiving the item. And nearly a quarter (24%) said they are MORE likely to do business with the advertiser on the items they receive. (Neal’s note: Everyone likes to get a gift!)

It’s all business: Most respondents (62%) have done business with the advertiser on a promotional product after receiving the item. (Neal’s note: And they show appreciation for that gift!)

User-friendly: The majority (81%) of promotional products were kept because they were considered useful. (Neal’s note: Look around your desk!)

Staying power: More than three-quarters of respondents have had their items for more than 6 months. (Neal’s note: Promotional Products are the medium that “Remains to be seen”)

Lowest Cost Per Impression: The average CPI of an advertising specialty item is $0.004.  As a result, marketers get a better return on investment from advertising specialties than nearly any other popular advertising media.

*Source:  Advertising Specialties Impressions Study, Commissioned by ASI

So, in conclusion, Promotional Products are the most cost effective medium returning the greatest ROI of all. 

I am very proud of the work and creativity I have offered my customers/partners this year, and look forward to another year of successes, challenges, and growth for your business.

We will meet the challenges head on, and I will continue to help you use this fantastic, creative, and cost efficient medium wisely and successfully.

Thank you for your trust in me, and in Geiger.

Neal Munn, MAS

Clients ask me why the price of cotton based products is going up.  A number of factors contribute to the increase but the largest is detailed in the short article below, from The Counselor an industry magazine for promotional products.

Cotton Prices Hit Record High
A variety of factors, including high demand in Asia and disappointing crops in several countries, have driven cotton prices to their highest level since the Civil War. Before trading stabilized yesterday, cotton futures reached $1.19 per pound, an increase of 80% compared to last year. According to the U.S. Department of Agriculture, this is the fifth consecutive season that the global demand of cotton has overwhelmed the supply.

More so than in other years, poor weather in Pakistan, one of the world’s largest cotton exporters, has contributed to atypical prices. As recently as April, Pakistan expected to produce 14 million bales of cotton in the 2010-11 season, compared with about 12.7 million bales in the previous season. Yet, because of unprecedented flooding, government and industry officials now estimate an output of about 11.6 million bales. Further driving up prices, traders also remain concerned that export restrictions in high-producing India will limit the amount of cotton that can be sent to large countries like China, which manufacturers $13 billion of apparel per month.

Faced with the alternative of lower margins, multiple apparel retailers, including Levi Strauss & Co., have already announced price increases. Executives from Kohl’s, Aeropostale Inc. and Guess have also hinted cotton prices are exerting pressures on product cost. Analysts expect retail prices to steadily climb, with the most noticeable markups found in relatively low-cost items like T-shirts, hurting discounters.

The last time cotton prices were this high was during the 1860s, when blockades interrupted the flow of the commodity from the U.S. to Europe. Then, prices reached $1.89 per pound.

Other factors include labor costs, transportation and fuel charges.  What should you do?

Work with a professional promotional products consultant that has the lnowledge and experience to source cotton based products to insure delivery and good value products.  Planning ahead really makes a difference in making your projects successful. 

Contact me for more details.