As everyone knows, economic times are a bit tough currently in this country. We recently spoke with a few of the industry’s corporate awards manufacturers about the corporate awards market. They cite some interesting options available to those willing to diversify. This is what they had to say.

Since Late 2008
The precise date on which our country’s (and by extension, the world’s) economy went into the tank depends on which economist’s calendar you are looking at, but most of us remember it being sometime in September 2008. Things were bad and then they got worse, and ultimately, nearly every business in nearly every industry saw their sales decline. In the time since, it’s fair to say, things have been up and down across the board, but no segment has changed as much as that of corporate awards. Those changes have had a variety of effects.

Many corporate accounts are stepping up their award programs a little more these days. Photo courtesy of ATDesigns

Among others, one effect is that there are less corporate customers than there were in 2008, comments Bob D’Andrade of ATdesigns in Indio, California. In addition, he says, “These challenging times have taken their toll on many customers not able to adapt. I’d say that many of the remaining corporate accounts seem to be stepping up their award programs a little more these days. They perhaps have already had to perform the necessary cutbacks to survive, and they now see the merit of rewarding the valued staff they have remaining.”

Mike May of JDS Industries in Sioux Falls, South Dakota, has a similar view of the market, “The corporate award market has shrunk a little since 2008, with fewer organizations thriving the way they were pre-2008. However, there is still a substantial market available. I think that a lot of organizations have been forced to work with a smaller budget for their recognition programs. For those who are marketing to these organizations, it is necessary to have a wide selection of products that fit several price ranges,” says May.

In addition to buying items at a lower price point, Abdul Amlani of N&R International in Marietta, Georgia, states that a lot of companies are not purchasing awards as frequently as they used to. “One of our customers used to do annual awards, and now they do them every two years. They also cut down the categories of the awards, hence reducing the number of awards needed. Some companies scaled back the type of awards and went to smaller versions of the same item or lower-price items.”

Barry Stewart of Colorado Heirloom in Loveland, Colorado, has seen his orders change in a different way. His customers have largely converted to custom orders; his large amount of custom work is what has allowed his business to thrive over the last three years. “Our custom work really began to pick up in 2009. We are doing much more custom design work than we have ever done before.”

D’Adrade, whose company also does a great deal of custom work, adds, “There’s also a very noticeable push these days to the many made-in-the-USA lines of products we create in California. It would appear that many business leaders are finally seeing that the flight to cheaper imports may not have been the best strategy for the long-term survival of their companies, and in turn, their country.”

Responses & Adjustments
If nothing else, the country’s financial struggles have taught us that the many companies comprising our intricate economy are interconnected, and when one falls, it can take many others with it. The effort to avert that domino effect has resulted in a ripple of adjustments and various responses by businesses of all kinds.

The corporate award market has shrunk a little since 2008, but there is still a substantial market available. Photo courtesy of JDS Industries

As just mentioned, one of the ways in which Colorado Heirloom adjusted was to increase their custom work, which Stewart says has allowed them to remain successful. In doing so much custom work, he has had an insight to the changes that his corporate customers are making in their own businesses. “They’re very specific about what they need. In addition to specific design elements and functions, they want wood from sustainable forests and glue that is not an environmental hazard. They want this because they are all very ecologically minded. We’re working with a lot of different customers who are serving a number of large corporations. It has been a lot of fun.”

Servicing environmentally minded clients has in turn made Colorado Heirloom more environmentally aware as well. Stewart adds that he doesn’t know that the corporations themselves are very concerned about the environment. They may be. However, they are definitely very concerned with developing a brand that is environmentally friendly, whether it is the products and services they’re selling or the products that they are buying.

“It is something that they are very careful about right now. They want to create the perception that they are very concerned about the environment, and I think that a lot of them are,” says Stewart. He notes that many of his clients are international companies, who are even more environmentally focused than American companies.

Of course, other companies have made similar adjustments. Offering suggestions for awards retailers, D’Andrade says, “As far as strategy goes, I’d say any prudent award shop or supplier should offer a decent mix to suit many budgets, perhaps focusing more today on such strengths as made in America, but in general, stay the course of quality and service first. If you have confidence in the strategy that’s worked in the past, stay the course, and work harder to find the clientele that appreciates your strategy.”

According to JDS’s May, the strategy of choice can be summed up in one word: “Options, options, options! JDS offers a wide variety of recognition products ranging from traditional crystal, acrylic, solid wood and metal awards to less expensive items.”

Amlani concurs, “You need to have more alternatives, especially in terms of price, yet maintain a high perceived value for the recipient.”

May notes that cost and creativity are always top considerations when creating corporate awards. “The more value you can provide the retailer to present to the organization, the more likely they are to win the sale with your product.”

Best Selling Corporate Awards
Now that we have discussed the state of the corporate awards market and addressed some effective strategies for tackling it, let’s take a look at some of the most popular awards those strategies will help awards shops sell.

“I wouldn’t say that we sell a lot more of one award type over the other,” May informs us. “The market for each is a little different. The volume goes up or down depending on the cost of the product type as a general rule. JDS has carried plaques and acrylic longer than we have carried crystal, so we sell more of those items as a result.” May adds the names of some of those best-selling items, “Piano Finish Plaques, Solid Walnut Plaques, Mirage Acrylics, Impress Acrylics, Floating Glass Plaques, Black Pedestal Crystal and Art Glass are some of our popular product lines for the corporate market.” May adds that they have many more corporate awards; these are just a few of their best-selling items.

“ATdesigns is not as diverse as some in the market as far as plaques go,” says D’Andrade. “However, we do offer the highest quality of custom plaques in fine pewter or zinc, using only lead-free materials. No names, no brands. All custom designs are made to the personalized wishes of each and every client.”

Some companies have scaled back the type of awards they use, and they have gone to smaller versions of the same item or lower-price items. Photo courtesy of N&R International

“N&R International only carries products made of natural marble/onyx,” says Amlani. “Our most popular items are plaques, obelisks, bookends and clocks.” He notes that N&R has several awards as well.

“We do a lot of custom awards for the corporate market,” says Stewart. “That has been our niche for a while, but we’re doing more than ever. We create a lot of custom designs, and a lot of them are our customer’s designs. We’re very open to what our customers are asking for, and they want to be involved in design. We’re doing a lot of specialized, hollow-back plaques. We also sell a lot of custom boxes in addition to our own line of boxes.” He adds that Colorado Heirloom’s large amount of custom work helps them compete with Chinese manufacturers.

Corporate Projections
As of the writing of this article, Wall Street is dealing with consecutive weeks of losses. It remains to be seen how the country’s most recent economic struggles will impact corporate America. Another round of budget restraints may be on the way. However, the way in which to deal with those restraints will not change. According to the information in this article, providing customers with environmentally friendly custom options made in the USA helps, but any company that is able to diversify the processes, services and products they offer, as well as the customers they sell them to will do well.

The Retailer’s View
It is the retailers who deal with the corporate clients of the recognition industry directly. We talked to a few of them, and we began by asking what types of companies comprise the corporate awards market.

Charles Brown of Brown’s Trophies in Tampa, Florida, has noticed that there are more local and small businesses buying awards. The relative weakness of some of their larger competitors has left them with an opportunity to gain a bigger piece of the pie, and they are taking care of their employees as they work hard to earn that extra business.

“However, traditional buyers of corporate awards have been the traditional institutions, such as banks and insurance companies. Those orders, however, have decreased significantly over the last three years. Across the board, the recognition budgets of corporations have been reduced, and they’re spending dramatically less than they once did,” says Brown.

Other retailers have seen similar changes. Ed Duprey of Great Lakes Trophies & Engraving in Garden City, Michigan, notes, “I have some large national accounts, one is in the medical field, and the other is a national museum. I have a third corporate account, and they’re local. Those three companies represent about ten percent of my sales. Corporate awards represent anywhere from 15 to 20 percent of our sales, but those three companies make up ten percent of my overall sales,” says Duprey. He adds that he primarily sells them plaques and acrylics.

Many organizations have already had to perform cutbacks to survive, and they now see the merit of rewarding the valued staff they have remaining. Photo courtesy of ATDesigns

Since 2008, Duprey says that only the museum has maintained their orders. The other two have dropped. “It’s budget constraints on their end. It’s nothing to do with our services or products. They didn’t go anywhere else; they’re just not doing as much with us.”

Great Lakes Trophies & Engraving isn’t the only shop to have encountered this issue. Brown shares the story of an awards shop in the Midwest who had a corporate client that spent approximately $100,000 with them annually through their marketing department. Due to economic restraints, the marketing department was cut from 12 people to two, and their awards budget went to zero. The awards shop did not do anything wrong, and yet they lost the client to circumstances beyond their control.

Warren Rader of Rader’s Engraving in Boston, Massachusetts, has seen a dip in his corporate awards sales as well, though for him the drop in that category has not been as drastic as others. “We’re in downtown Boston, so we do get a lot of major corporations. We do a lot of scholastic stuff as well. There are a lot of universities in the area—Harvard, Boston University, MIT and more. There are also a lot of hospitals in Boston, and we do a lot of work for them. It’s like any large city. There are a lot of corporate clients,” says Rader.

He adds, “In the last three years, things in general have slacked off a little. There have been a lot of other sectors that we have noticed a huge reduction, but I think plaques and awards are still things that people want to give to show recognition. It’s less expensive than giving money a lot of times. So, overall, I’d say we’ve seen a slight reduction,” says Rader.

Rader adds that his business is very diversified in the services and products it provides, and that has helped them. “I have noticed more changes in other areas. For example, there is much less signage because there are fewer places opening.”

Brown agrees with Rader’s views on diversification. “Diversification is the key; it always has been. The more diversified you are, the better you are going to survive. Award shops that have lost corporate customers are going to have to replace them in new markets and by adding new services and new products. The market has to be readdressed.”

Brown adds that awards shops whose sales in corporate awards have dropped will have to seek new customers in new markets. If the market for corporate awards ever returns to what it once was, it will be some time before it occurs.

N&R International only carries products made of natural marble/onyx, including plaques, obelisks, bookends and clocks. Photo courtesy of N&R International

Brown adds that seeking to make up those sales by putting forth more effort into the familiar markets for schools and team sports awards is also not an option. “I’ll tell you why. Schools across the country have had their budgets reduced. They are being forced to reduce their staffs because of budget cuts, and their budgets for awards have been reduced much more so.”

At the moment, Brown says he is looking for different services his business can provide that they haven’t in the past. “For example, I’m looking at the banner business. That, to me, is intriguing. I talked to someone who brought it into their business not that long ago, and they have done extremely well with it, adding that product line to what they already had,” says Brown.

Rader isn’t the only one making adjustments. The state of the corporate market has prompted Duprey to make some changes to his business. He just hired an outside sales force to increase his corporate sales. “It has only been implemented now for ten days.”

Duprey says the current market has forced him and his staff to become lean and mean and cut expenses to keep everything manageable. “We did that without sacrificing quality or service. We continue to keep our corporate accounts because of our service, even though they only purchase a fraction of what they once did. We have not lost any customers, but we have had to deal with our customers’ budget restraints.”

It seems the key to survival is a willingness to explore new industries for sales opportunities, however odd they may seem at first.

“I try to do as much as humanly possible. I try not to say no to anybody. If I can’t do it, chances are, I know people who will do it. Anything you can do to make a sale, you do. I always say, if somebody comes to me and asks me if I sell goats, if they’re looking for one, the answer is, ‘No,’ but if they want 10,000, I’ll get them some goats,” says Rader.

You can’t lose with a goat-getter attitude like that.