by Leo Jakobson | July 24, 2017
After many years of talking about it, incentive merchandise suppliers have finally started courting promotional product sellers. These suppliers are approaching promotional products sellers as another way to reach companies that run incentive and recognition programs, but purchase and source awards on their own, often through retail channels.

The reason merchandise suppliers have been discussing this for well over a decade is that promotional products sellers represent a very big opportunity to reach the 84 percent of U.S. companies that spend $90 billion a year on non-cash incentive programs, according to the Incentive Federation's 2016 "Incentive Marketplace Estimate Research Study," also known as the "Market Size Study." Merchandise, gift cards, and award points -- commonly redeemed for merchandise or gift cards -- accounted for nearly $65 billion of this. And a lot more of those firms work with promotional products suppliers than do with incentive award suppliers.

For incentive merchandise sellers, promotional products sellers represent both a foot in the door and an existing relationship with potential corporate incentive buyers -- if they understand the incentive business well enough to successfully sell it. And it's not just incentive professionals and firms that see value in partnering with promotional products experts. In February, one of the largest promotional products firms, Halo Branded Solutions, purchased New York-based incentive and engagement firm Michael C. Fina Recognition.

One incentive firm that has been particularly active in this space is Chicago-based Hinda Incentives, which launched the Hinda Partners Program late last year in order to provide promotional product sellers with not just products to sell, but also education about how incentives work and sales tools they can use with potential clients.

"People have been focusing on selling 'stuff' -- asking 'How can I get corporate gifts and rewards, merchandise, and gift cards to people,'" says Michael Donnelly, president of Hinda Incentives. "Our approach is different. We're taking it from the solutions side, helping [promotional product sellers] understand the theory and principal, and the art and science behind incentives, and then how to do it. They needed resources and tools, things that would help walk them through the process. They need subject matter expertise, not just access to stuff up on a shelf or drop-shipping. Everybody's enamored with the $90 billion that's out there, but the solutions are what drive it."

That is why Hinda took an education-first approach in creating the Hinda Partners Program, which revolves around an online portal that provides education, training, and marketing support.

"We love our industry, and know that there's a lot to it. We would never say, 'Anybody can sell this,'" Donnelly says. "So, we have a one-two-three approach."

No. 1 is an online web portal that offers webinars and training videos on things like how to do employee recognition the right way -- tools that Hinda's new value-added reseller (VAR) partners from the promotional products industry can not only learn from, but pass on to potential clients who need education so that their programs will get the best results possible. No. 2 is professional support, sales planning, and training tools. This includes proposal and presentation creation, advice on creating programs for specific clients, and customer service for VAR's end-user customers, Donnelly says, adding that Hinda will even go in with its partners for large pitches. The third step is sales and reporting tools, everything from customizable sell sheets and case studies to program measurement tools.

"Now they are not just product sellers," Donnelly says. "They are selling an incentive solution."

And, by pitching reward and recognition programs to companies they already have a long-standing relationship with, the VARs not only start with a foot in the door, they also have a contact who can introduce them to the right people -- the sales executives running incentive programs, the human resources professional working on employee recognition and engagement programs, whoever the right person in that company is. And that covers one of the biggest difficulties third-party incentive professionals have when approaching a potential client cold -- knowing who to talk to.

Hinda is focusing this effort on small and medium enterprises, not just the Fortune 50 to Fortune 500 companies that most incentive houses seek out as clients, Donnelly says, noting that Hinda's platform can handle everything from a $20,000 sales incentive program to a $40 million recognition program.

It's an approach that's working better than expected, Donnelly says. By the middle of the second quarter, Hinda had already signed up twice as many new VARs from the promotional products industry as its entire 2017 goal. It had also doubled its sales goal.