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For Donna Weaver, 2004 was a terrific year for gathering new clients. The president of Perfect Image Marketing (asi/293478) in Coram, NY, started to leverage her Web site even more, and got client orders from \"all over the place.\" The post-9/11 \"fog\" had definitely cut into her business, like everyone elses, but some old clients started coming out of that too. \"Last year was my best ever,\" she marvels. Not everyone had quite as fabulous a year as Weaver, but there were some similarly encouraging numbers in this years State of the Industry survey. The average number of clients served jumped to 351 up from 263 in 2003, and very much in line with historical norms. The same sort of result emerged with new clients served: an average of 58, up from 38 in 2003. Bill Boeyes business is a pretty good barometer for this, since his firm Phoenix Promotional Products (asi/295287) in Red Oak, IA, provides back-office services for distributors, serving as a kind of processing center for them.
Not only have his client numbers gone up like the survey might indicate, Boeye says, but the volume of business from existing clients has risen, too. The median number of clients, though as opposed to the average seems to be quite stable. That appears to be a contradiction, but what it implies is that it may be the largest distributors who are seeing the big gains, and that smaller ones are seeing their client rosters remain steady, or even be slightly pruned back. (The survey sample itself might have also contributed, with a widened pool of large distributors who responded.) Thats reflected in one cautionary note in the survey, which is in the area of client retention. That number actually dropped fairly significantly, to 83%, down 6% from the year prior. Whos bearing the brunt of the trend, of customers looking elsewhere for order fulfillment? The survey indicates its the smallest distributors who are feeling the most pressure. Medium and large firms held on to existing clients to a matching extent both a shade over 84% while small distributors saw a lagging 79% retention. Part of the reasoning for that 5% gap is longevity, the survey indicates: The longer a firm has been in business (which usually translates into bigger size), the better its retention levels. But Bob Baker, the head of Admark Promotional Marketing (asi/107207) in Belmont, CA, doesnt foresee any doom for the smaller industry players as a result. \"With the Internet and virtual samples, small distributors can often provide the same amount of clout,\" Baker says. \"And with larger houses helping you, you can compete on a pretty even keel.\" The Web is a double-edged sword, though, and those retention issues that emerged in the survey may be due to a new world in which client loyalties arent quite as solid as they used to be. If a given customer doesnt like a price, they might very well go hunting online. But Weaver, a small distributor herself, isnt fazed by those retention warning signs, and is thrilled about her ramped-up client numbers. \"My client base went up 30%,\" she says. \"Last year I couldnt keep up with the work.\" Dale Kirby - Director of Marketing, Promopeddler.com Dale Kirby is no stranger to promotional products, having been in the business for 14 years. But when it comes to client recruitment, shes literally \"amazed\" at whats going on at her company, Bagpeddler.com (asi/129990) In the old days, cultivating clients was a labor-intensive process, often involving building relationships over years and years. And while that process undoubtedly still exists for many, theres another track for building client lists, which is another ball game entirely: the Internet. \"People weve never even met just call us up,\" says Kirby, director of marketing for the three year-old firm. \"Anyone whos operated in a traditional business model would be amazed, if they were sitting here as well.\" The result of their Web-focused approach is that sales have grown an average of 129% over the last three years, growing the firm from a \"small storefront in a country town\" to an operation thats now leasing a whole floor on the outskirts of Portland, OR. It also means that the company isnt regionally focused at all, and has 50% of its clients on the East Coast, even though the firm is based in Sherwood, OR. That means two shifts of staffers, to handle business from different time zones. Client retention remains solid, too repeat customers are around 40% of their business despite the fact that buyers could always go to competing Web sites or local distributors. Thats helped by guerilla marketing tactics, the companys \"secret sauce\" that Kirby says bolsters the brand and creates loyalty among far-flung customers. \"With an online business, its just fascinating,\" says Kirby. \"They seem to be finding us.\"
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