When Chris Ferriter, the VP of business development who oversees sales for SoBe Promos, sat on a millennials panel at last year’s ASI Power Summit and explained how the Miami-based distributorship he’s part owner of doesn’t really know many of its clients personally – preferring to communicate with them via social media – and doesn’t have any qualms whatsoever about sourcing direct overseas, the judgmental silence from the decidedly older-skewing audience of suppliers and distributors was deafening. It was, without question, a mic-drop moment. “Yeah,” says Ferriter, 29, laughing. “I think I freaked everyone out.”
Well, too bad. This industry has been complacent long enough and the three millennials at the helm of SoBe Promos are the ideal agents of change. Consider that they’ve had over 1,000% sales growth from 2013-2016 and were named to Inc. magazine’s list of the 500 Fastest Growing Private Companies in 2016. Clearly, they’re doing something right and are putting their money where their mouth is.
Ferriter met Scott Latimer, the company’s 30-year-old CFO and Spencer Kramer, its 30-year-old CEO, when they were all undergrads at the University of Miami. Latimer and Kramer, had, in fact, known each other since seventh grade, and Latimer spent summers working at the company Kramer’s father owned. That business happened to be in the promo industry and was called – wait for it – Bullet Line.
And while Ferriter and Latimer have equity in the company, make no mistake, Spencer Kramer – scary-smart and soft-spoken with an endearing aversion to attention – is the driving force behind SoBe’s genesis, and it’s an entrepreneurial trait wound into his DNA strand. To say that Spencer’s father, Jeff Kramer, was an industry legend is putting it mildly. With an acerbic wit, rapid-fire intellect and talent for spotting trends that was downright prescient, he was a character. He’s also the person directly responsible for bringing three-day turnaround to the industry – in 1980 – thereby obliterating the standard four-week wait time for order fulfillment. Spencer has his father’s fearlessness and ingenuity in spades, and it’s worth noting that Jeff Kramer was 28 years old when he started Sun Manufacturing, as Bullet was known then; his son was 26 when he started SoBe.
An example of just how different SoBe is in their business model is their expertise in the area of sourcing, courtesy of Kramer’s contacts and experience growing up watching his father do it, and traveling with him to Asia. “It’s an unbelievable competitive advantage for us,” Ferriter says, offering an example that involves fidget spinners, of all things. “Right now, it’s such a hot product that a lot of North American suppliers we use are out of stock; but we have contacts at a factory in China, so we’re able to get them sent to us directly and we can fill our clients’ requests.”
CJ Schmidt, the owner of Top 40 supplier Hit Promotional Products and the #1 person on this year’s Counselor Power 50 list, knows a thing or two about sourcing product and being the scion of an industry pioneer. “Given Spencer’s background growing up in the business, he and his team have the ability to source product domestically and overseas with the best of them,” says Schmidt. “Tack on to that Chris and Scott and their creative and forward-thinking strategies, and you have an up-and-coming team that’s a force to be reckoned with.”
Their youth, enthusiasm and ability to shed, on a dime, a strategy that’s not working speaks to their confidence and cojones. “We’re not interested in doing things the way they’ve always been done in the industry – we’ve figured out some ways that work better for us and our clients,” Ferriter says, reiterating the point he made at the Power Summit when jaws dropped. “I wouldn’t recognize 90% of my clients if they walked into the office right now,” he says matter-of-factly. “We communicate over social media and through texts. Typically, if a client or prospect reaches out to me, they’re direct-messaging me a screenshot of a cool product they found.”
That’s not to say that Ferriter, the most gregarious and loquacious of the three, doesn’t have a following amongst his clients. “Chris has clients who pay for him to fly to their events just to hang out, and who send him expensive bottles of champagne as thank-you gifts,” Kramer says, clearly impressed by his head of sales and more than a little relieved that he, who’s reticent to be in the spotlight, has someone who fills that role so well. “Chris really is the face of the company and I am totally OK with that because he’s so good at it.”
With a team of 14, the staff is extraordinarily young and have a brash determination that’s dedicated to doing things according to their own rule book, not the industry’s. “We didn’t have titles until very recently, because we really don’t care about things like that,” Kramer says. “Besides, we pretty much all do everything.” Everything includes handling orders, creating artwork and making sure clients get spec samples.
SoBe’s receptionist, Judy Robinson, was with his father when he started Sun Manufacturing and has literally known Kramer since he was born. “Judy knows everything there is to know about me,” he says. “She’s the best.” In his office, the artwork and desk belonged to his Dad, and the symmetry of the lineage from one generation to the next is palpable.
Such a perfect example of a new breed of industry leaders that one need look no further than Latimer, the CFO – a role that typically isn’t filled by the life of the party, shall we say. But Latimer isn’t so much of a bean counter as the office social director, the first one to crack a beer on a Friday after work and lead the charge to happy hour.
These guys are educated, talented and on point – and they could have had successful careers anywhere. Latimer started working at an accounting firm in his junior year at UM while carrying a full course load. After he left the accounting firm and started at SoBe, he went to Florida International University for his Master’s in accounting and got his CPA license, all while working full-time. Ferriter, meanwhile, was a financial analyst in the Financial Leadership Development Program at third largest defense contractor in the world. Remember that when people discuss the misconception of young, smart people shunning the promo business as a career choice and that millennials are coddled snowflakes averse to hard work.
“We’re totally in it now,” Latimer says, “and we love it.” Except, of course, for the pesky perception that the industry is full of cheap trinkets and trash and the professionals in it are no better than sleazy car salesmen. “That reputation really bothers me,” Ferriter says. “Because nothing could be further from the truth – we’re creating innovative and cool campaigns for our clients every day.”
More likely, it was Kramer – with his equanimity, laser-like focus and leadership – that drew Latimer and Ferriter to the prospect of starting their own promo firm. Intensely protective of the company’s culture and brand, SoBe’s robust social media presence and the way he almost reflexively bucks the status quo, there’s a fierce independent streak in Kramer, and a confidence that belies his youth. “I’m very particular about the decisions I make for the company and I don’t apologize for it,” he says.
Walking through the hip and funky up-and-coming, culturally and ethnically vibrant neighborhood of Wynnewood, Miami, where the company is based, murals adorn most buildings – courtesy of the hundreds of artists that descend upon the area for Miami’s famous annual Art Basel – including the custom one covering SoBe’s building from Rusto Black, a famous graffiti artist. Approaching a bar in the neighborhood where the young SoBe team frequents happy hour, a UPS truck drives by and – spotting the guys who get multiple deliveries every day – the driver yells to them like they’re rock stars, asking them to meet him for cocktails. And they love it. “George, our UPS driver, is awesome,” Ferriter says.
Mistakes, They’ve Made a Few
Of course with every young startup, along with the examples of where they’re killing it, are the cautionary tales of lessons learned. “We really knew nothing about a lot,” Ferriter says. “Creating POs, dealing with an employee who was going out on maternity leave – I actually had to google ‘maternity leave’ to see how to handle it,” he laughs. “And, of course we promised clients more than we could do and then had to scramble to figure out how to fulfill the promise, but we always did.”
Latimer remembers how they’d price things incorrectly and lost money on orders, which must have, as SoBe’s resident finance guy, killed him. “That’s when the cocktails come in handy,” he smirks. “But the upside of screwing up is that we’re fast learners and reversed course quickly.”
Early on, Ferriter recalls getting a random message from a Fortune 500 company who wanted 250 mugs with unique caricatures on them created for speakers at a conference. The guys agreed, not knowing how they’d pull it off; but they did and made $2,000 – which was their biggest order to date. “We thought we hit the big time,” Ferriter says. From then on, they had that company’s business.
Another classic story involves the Miami Heat – an organization the SoBe guys badly wanted as a client – who gave them a chance with a rush order: 5,000 masks of the face of the basketball team’s mascot, Burnie, for his birthday. “We had them printed and then the three of us had to go down to the print shop and – for hours – staple Burnie’s head onto 5,000 sticks,” Ferriter said, as Latimer laughs at the memory. But they did it, delivered the product and now the Miami Heat is one of their best clients.
That SoBe Promos is able to do customizable items because of their relationships with overseas factories is a huge advantage; that the three owners rarely argue and operate a drama-free company is downright astounding. “We’ve known each other for a long time, so we’re aware of each other’s strengths and weaknesses,” Kramer says. “They say you shouldn’t work with friends but I’ve never bought into that … it’s another business rule I’ve opted to ignore.”
When they started SoBe in 2013, Latimer says they did “less than 300 orders”; in 2016, they did nearly 2,600. And while they get business from the tech, e-commerce and retail markets, behemoths like AT&T, record labels in L.A. and a multitude of local Miami businesses, colleges are what put the company on the map and where they still get a fair share of their orders. “We get so much of our business from word-of-mouth referrals because of the level of our service,” Kramer says. “If we have an in at one company or college, our point person will typically pass our name on to someone else in a different department and they start using us as well.”
Because they’re young they’re able to give their clients advice on which products are hot – and which aren’t. Ferriter uses USB drives as an example: “I can’t remember the last time I sold USBs to a client … because everyone, and certainly young buyers, use things like Dropbox.”
Go Big or Go … Bigger
You’d be tempted to think, what with all their talk about doing things their way, that they don’t have an affinity for the promo business – and nothing could be further from the truth.
“One thing I love is how our industry allows us to work with any kind of company or business,” Latimer says. “Everyone wants to see products with their logo on them, no matter what industry they’re in. It keeps it interesting.”
Ferriter agrees. “I love the opportunity to be creative and help clients come up with really cool, unique product ideas and then hearing their reaction when they finally get the finished item,” he says. “I really enjoy when someone is all jacked up about a custom product we did for them. That’s what makes it fun for us. Look, we were number two on last year’s Counselor list of Fastest Growing Distributors and this year we’re number one. Believe me, we are totally focused on the growth of this company and the industry.”
Kramer and Latimer point to a few particularly ambitious goals that include having a recurring place on Inc. and Counselor magazines’ Fastest Growing Companies lists, hitting $20 million in sales in five years and completely upending the old-school norms of the industry. Says Kramer, in his typically understated yet determined way: “And I really don’t see why that’s not possible.”
Michele Bell is executive director of ASI’s Editorial Department and editor of SGR magazine. Twitter: @ASI_MBell