Product Hub March 24, 2017

Promo Market to Target: Technology

Strong growth, trendy products and rich swag appreciation make the tech market a bonanza-in-waiting.

By  Sarah Protzman Howlett

The technology industry is growing. That may not be surprising given our growing addiction to technology, but rest assured that the numbers back up the story. A report from The Computing Technology Industry Association (CompTIA) found that tech industry jobs have increased five consecutive years, and in 2015 reached a total of 6.7 million workers – more than the financial and construction industries. A total of 45 states (plus Washington, D.C.) saw positive tech-industry job growth in 2015, with California, New York and Texas leading the way.

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And that may just be a hint at things to come. In an article for Time titled “7 Reasons the Tech Sector is Set for Explosive Growth,” a leading technology analyst highlighted how advents like wireless innovation and the Internet of Things will “lead to a potential tripling of demand for tech-related goods and services over the next decade.”

Such a development would usher in even more technology companies – all of whom will have to compete for skilled employees and coveted investor money while differentiating their brand among a sea of similar offerings. There are 473,500 tech companies in the United States, and while we all assume that Amazon and Google control every bit of technology in this world, the reality is that there are hundreds of thousands of other tech companies with branding needs.

Trims Unlimited (asi/347037) is a Los Angeles-based company that counts 90% of its clientele from the tech sector, among them SalesForce and DocuSign. But Trims President Susan Roth says the distributor has many clients that are, for now, small to medium in size, with huge growth potential given their venture-capital backing and sizable marketing budgets. “They’re all trying to stand out from the noise and get noticed, and attract more investors,” she says. “The pre-IPO companies have money to spend, and they’re very big on branding themselves. They’re not extravagant, but they’re very mindful of making sure their brand is well-presented.”

Rewarding Talent
The stiff competition for top talent – and the perks it takes to retain it – means technology companies of all sizes must “surprise and delight” potential and current employees, says Jeff Holt, vice president of sales and marketing for Image Source (asi/230121). The Seattle-area based distributor sees this firsthand, not only through its roster of tech clients that includes Expedia, WebMD and Microsoft (whose offices are 10 minutes from Image Source’s), but also as part of a geographic technology hub that was ranked second in 2015 by the Brookings Institute among U.S. cities with the most high-tech jobs. Because tech companies must differentiate in a saturated market (engineering and architectural computer occupations, which are mostly engineers, had an unemployment rate of just 2.6% in 2015), Holt finds that not only do tech companies order a ton of promotional products for external marketing, but they also seem to spend more on their own people than other industries.

Lisa Smith, owner of Republic Promos (asi/307316), finds the same is true in Austin, TX, where the distributor is based and about 585,000 technology industry employees call home. “It’s hard to hire and keep employees because there’s so much opportunity,” she says.

Perks are common in the tech world – think stock-based compensation, unlimited vacation and endless snacks. Thoughtful company-branded items can be included on that list, for making new hires “feel valued and appreciated,” Holt says. To pull this off, he adds, presentation matters: “They want to be on the bleeding edge of all this stuff, and suppliers have upped their game on packaging these items. Maybe it’s not a retail brand you’d buy off Amazon, but it’s got their company logo on it, and slick, retail-style packaging.”

Of course, there are myriad other uses tech companies have for promotional products. Sphero, a Boulder, CO, manufacturer of app-enabled robotic toys, earmarks most of its promotional products for outfitting employees at trade shows. “Price is a big factor,” says Claire Tindall, senior director of marketing and communications, “but we don’t ever want to sacrifice quality because they’ll be wearing these items for up to a week at a time.”

Tech companies do many such events and tend to have a heavy focus on branding, from the Consumer Electronics Show (CES) all the way down to their own events, Holt says. “They’re always trying to drive traffic,” he says, “and have the coolest stuff at their parties.

In January at the most recent CES, Sphero gave all its buyers car air fresheners branded with the Sphero logo. “We like to think about the quirky things you wouldn’t expect,” Tindall says, “that you won’t get home and just throw away.” This past year, Sphero had a hit with custom ugly Christmas sweaters for employees. It gave a few away on social media as well as to its external agency partners.

Hoodies and tees act as incentives for Sphero employees who volunteer to work a trade show or an event. It has also produced employee shirts for internal product launches “so everyone can celebrate,” she says. Tindall says Sphero values flexibility when looking for marketing partners. “We are a startup,” she says, “so our minds change frequently.”

Programmed to Be Cool
Much like their businesses – which hinge on the cutting-edge, the newer, the faster – tech companies seek on-trend highly useful promotional products with a distinct cool factor, Smith says. In addition to T-shirts – “some won’t even have their logos, it’ll just be a really cool design,” she says – Republic Promos’s tech clients gravitate toward RuMe totes, Tile trackers and Yeti mugs. Tile trackers (small Bluetooth trackers that integrate with an app to help you keep track of everyday items like your keys or phone) “aren’t cheap, and several companies want those now,” says Smith, a 20-year industry veteran whose four-year-old company counts about a third of its business from the tech industry. Among the more unusual items Smith has done lately: antigravity phone cases, pajama pants, massagers and a noise-making bottle opener.

Virtual-reality viewers are also big, Smith says. But it doesn’t always have to have a technology angle. When Republic Promos’ clients go to college campus for recruitment days, Smith says her company will receive a lot of orders for run-of-the-mill can coolers and earbuds, which are still popular among the younger set.

Bethany Brevard, co-owner of Austin-based Proforma Professional Business Solutions (asi/300094), finds that cool, social media-ready products are always a big hit. “HR is always looking to be on the Best Places to Work list, so they want things that create buzz – particularly Twitter buzz,” says Brevard, whose work comes from about 90% tech clients. “They want tweets that say it’s an awesome place to work. Hashtag ‘Work here!’” Brevard says the distributor’s New Hire, New Baby and New Pet kits – “for anything bigger than a fish” – get tweeted like crazy.

Brevard says the sweet spot for trade show buys is the five- to six-dollar range that companies can give away in large quantities. She sells a lot of trucker hats, Yeti-style tumblers, laptop stickers, “things that target young, recent college grads.” (The largest tech companies in the U.S. are primarily young and male.)

“PopSockets (phone grips) are huge,” Brevard says. “Everyone’s into those right now; they are the giveaway of the year. But it’s one of those things you have to explain to your clients.” The same is true for Google VR viewers, she says, which often require a demonstration when she takes them to a client.

Trims largely caters to another echelon of the tech-company world: executive decision-makers at the companies. “Everything they buy is a step up from a rolled-up T-shirt,” Roth explains. “The look and feel is quality; that’s what they’re looking for most of all.”

While sometimes a technology client will want “very down-to-earth things like notebooks and pens,” she adds, Trims more often supplies promotional items for room drops, briefing centers, business trips for top sellers and investment dinners. “It’s more than two chocolate coins on your pillow at night,” she says. “Not necessarily expensive, but high touch.” Roth recently assembled a Sweet Dreams Package for conference attendees that included an eye mask. Travel items are big for Trims: travel pillows, small travel blankets, even portable photo printers. They are packaged with branded ribbon “so it feels like it’s been thoughtful; it’s not shrink-wrapped,” she says. A Bluetooth speaker Trims recently procured had 360-degree sound and could also be used for conference calls. Waterproof earbuds and charging stations are other sought-after items for the company.

Anything Bluetooth is also in demand right now, Holt says, such as speakers and wireless headphones. Apparel items remain popular in tech, too, just “not as many polos because it’s just not quite the style.”

Whether Proforma clients order hoodies or polos often depends on age of the average employee, Brevard says. “A company’s Boulder/Denver office might order the trucker hat and thin hoodie,” she explains, “but the Long Island office might order fleeces and polos.”

Creative thinking and dedicated sourcing can also be rewarded. Roth encourages her industry colleagues to look for ideas for promotional products in unexpected places. “If you don’t see it out there, it doesn’t mean it’s not out there,” she says. “The other day, I ended up sourcing a garment from a surfing company in California. It was perfect for what our client needed, so I called them up and ordered 800.”

Product Showcase

Tech Tantalizers

Making Contact
Distributors say it varies who makes the purchasing decisions for a tech company. Trims’ Roth says she typically deals directly with the overall marketing department for the company, because they’re usually planning the event with the executive suite. “They’ll take our host of ideas at different price points to them depending on lead time,” she says. Image Source doesn’t talk as consistently with owners or senior executives; Holt says the company’s clients are generally middle managers or marketing team members. “A lot of our business actually comes from these administrators,” he says. “They book the caterer, the venue, the swag giveaways.”

Smith has found that, when working with both marketing and human-resources teams inside a single company, “surprisingly, HR will buy more than the marketing side, probably because it does a lot of trade shows.” But it always depends on the company, she adds.

Sales-incentive departments make big buys, too, Brevard says, because these are the people who take their top sellers “on $12,000 cruises to London.” She says jackets, luggage tags and branded awards are popular orders for this segment of a large company. As for marketing departments, Brevard says they look for inexpensive, tech-related items to hand out at events. Cardboard goggles have been a hit lately, she says: “We did about 5,000 of them at a recent event giveaway. It was great timing since VR goggles were the hot Christmas gift of the year.”

Starting with a tech company on the ground floor can be immensely rewarding if (should you be so lucky) the company becomes a runaway success. Flexibility is key too. Acquisitions and buyouts are common, which means distributors can leverage new opportunities if they play their cards right. Several of Proforma Professional Business Solutions’ tech clients have been acquired by larger companies, one of which led to a global master sales agreement with “a company that spends $1 million a year with us,” Brevard says.

Job changes are also common in this fast-moving field. A buyer who is leaving a company may force you to scramble for a new contact if you’re not prepared; however, a loyal buyer will bring distributors on-board to their new company. “You start building a network of clients from them moving around,” says Smith of Republic Promos, which has tripled in size in three years and was named to the Austin Fast 50 last year. “We’ve had two marketers who have used us at three or four different companies. There’s truly enough business for everyone.”

Sarah Protzman Howlett is a contributing writer for Advantages.

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