The promo industry’s brave new world

As little as two years ago, many companies in the promotional products industry had yet to implement widespread information systems into the workplace. Now it is almost inconceivable for a company in our industry not to be operating on the Web and not to be communicating with their clients via electronic means.

As little as two years ago, many companies in the promotional products industry had yet to implement widespread information systems into the workplace. Now it is almost inconceivable for a company in our industry not to be operating on the Web and not to be communicating with their clients via electronic means.

There is now a new development that will one day be considered as vital to business as e-mail or online merchandise e-stores, and that is e-procurement.

Already, major clients in the U.S. and Canada have invested in various e-procurement systems in order to streamline their business purchases. Companies such as Ariba and Commerce One are the big names in the e-procurement industry, and they are names you will become familiar with, as more and more of your clients bring them up as directions in which their companies are heading. The catch is, you need to be heading there with them.

Any promotional products company currently operating its own online catalogue program is probably familiar with the basic underpinnings of the B2B world. However, simply placing images on a static site with pricing, sizing and shipping information is not enough. Clients requiring integration of an online catalogue with their e-procurement system need your site to provide the product and purchasing information in their system’s specialized format.

Typically, this format would be utilizing a technology called cXML. Without getting too technical, cXML is a derivative of the XML language focusing specifically on commerce transactions on the Internet. (Hence the ‘c’.) For specifics on the protocol, visit www.cxml.org.

The problems most often encountered with e-procurement technologies and the clients that implement them are twofold: First, most clients that implement e-procurement systems are quite large. Therefore, in most cases, the people responsible for the rollout of the system are very technical and have little knowledge of the promotional industry.

This leads us to problem number two, which is that, often, clients do not consider the custom nature of the promotional products industry. Although e-procurement systems work well at quoting, placing, tracking and reporting spending on items such as blue ink Bic Clic Stic pens, they often have difficulty differentiating the 2,000 Bic Clic Stic pens that have a blue imprint of the corporate logo on them from those with a red logo.

This is where working with a client and developing relationships with more than just your ‘main buyers’ is so important. If a client has deemed it important enough to commit itself to the implementation of an e-procurement system, you must take a lead role on how it would like to handle the promotional merchandise commodity.

The most important thing to remember when dealing with clients that are considering or that have already put in place an e-procurement system is not to overstep your bounds. You must admit it if you don’t have either the infrastructure or internal technical knowledge to handle such a situation on your own. Clients not only appreciate your honesty, but will also consider you a trustworthy resource when they look to tackling the integration of promotional merchandise into their systems.

There are several outsourcing companies that can help you through the process of adopting your client’s e-procurement program. In fact, companies such as Ariba (www.ariba.com) even offer names of solution providers that can aid your company in implementing your client’s requirements. Often, these specialty firms allow you to ramp up the technical capabilities of your firm very quickly; however, as you may realize, the cost of undertaking such an initiative can be quite substantial.

Even though the cost of integration may be significant – it could range from $5,000 to $50,000, depending on the needs of an individual client – one must also consider the byproduct of being part of a client’s e-procurement system: exclusivity. Intrinsic to an e-procurement program is the fact that clients streamline the number of suppliers that they deal with. Therefore, this contract management feature, which is included in most e-procurement systems, not only ensures loyalty by your client’s employees, but also monitors departmental budgets, fulfillment information and even aggregate margins on sales if required.

Overall, the way your clients handle purchasing promotional merchandise will continue to change. With the economy forcing companies to spend their precious marketing dollars wisely, getting a handle on their promotional merchandise spending will definitely be a way to maximize the impact of their efforts. With e-procurement, the challenge facing those of us in the promotional products industry today is to consider in advance how we can best take this opportunity to offer clients services that integrate easily with their solutions.

Steve Pons (spons@accolademarketing.com) is Toronto account manager with Ottawa-based Accolade Marketing Concepts, a comprehensive specialty advertiser in the promotional products industry.