Counselor

Point the Way

As the second-largest product category in the ad specialty industry, writing instruments provide multiple opportunities for distributors. Here’s an analysis of four popular markets to sell the category to. By Betsy Cummings

Are pens headed the way of photo film? With all of today's modern technology and focus on a paperless society, many would think that pens would become less favored by consumers and purchased less by promotional product buyers.

In reality, though, writing instruments are as strong as ever as a product category in the ad specialty market – and growing. It's the second-largest category in the industry, representing 9.7% of overall distributor sales in 2013. And that number has been on a steady increase over the past four years – from 6.4% in 2010 and a one-year jump from 8.1% in 2012. In all, as almost 10% of the total market, distributors sold nearly $2 billion worth of writing instruments last year.

"In theory, you'd think people would be writing less," says Chuck Fandos, CEO of Gateway CDI (asi/202515), a Top 40 distributor based in St. Louis. "We have not found that to be the case. I almost see the opposite trend." In fact, Gateway's pen sales, Fandos says, have increased 5% to 10% year over year.

They're not alone. Other distributors report similar sales growth and an increased interest among clients in pen styles, functionality and technological advancements. "Pens are so simple and such an inexpensive promotional item that's in their client's face all the time," says Terri Tolmack-Poynter, owner and account executive at Proforma Hi-Rez (asi/491640), a distributor in Mission Viejo, CA.

Not only that, but ASI research shows that writing instruments provide a high return on investment for clients. The ASI Ad Specialties Impressions study (www.asicentral.com/study) shows that writing instruments have a tenth of a cent cost-per-impression, tying them with bags as the promotional products that provide the best bang for a client's promotional buck. Plus, 56% of U.S. consumers say they own a promotional writing instrument – providing advertisers a high message recall on the pens they provide to promotional recipients.

So, to what markets are these distributors selling the most writing instruments? Counselor recently talked to distributors and suppliers to find out what clients are looking for in four of today's hottest pen markets. Read on to find out more.

Schools & Universities

"Any market where somebody signs something as a part of the transaction is legitimate," says Naomi Bodway, owner of The Source House (asi/466129), an iPROMOTEu-affiliated distributorship in Osseo, WI. That application is particularly appropriate for the education market, she says, because there's so much writing happening.

For Bodway's part, most of her pen sales are to universities and institutions in higher education. And most of the pens in that market, she says, are used for student recruitment and college fairs. "It's typically used as a branding awareness tool," something that students might hold onto for their entire academic career.

Bodway describes the schools' pen purchases as "not sexy," in the sense that most of the pens are lower cost, standard writing instruments. But they're a solid revenue stream for her company. A typical order, she says, runs anywhere from 1,000 to 5,000 pieces, making it "a real growth industry."

Terry McGuire, senior vice president of marketing for Top 40 distributor HALO Branded Solutions (asi/356000), agrees. Education pen sales have grown substantially for the Sterling, IL-based distributor, particularly in "post-secondary" schools in the area of student recruitment and alumni fundraising, McGuire says, adding that "any writing instrument with a stylus combination seems to be a hit with the bookstores" on college campuses.

"Any event that incorporates a registration process is a great opportunity for writing instruments," says McGuire. While many of today's college students are applying for classes online, there are still plenty of activities and campus events that require signups and pens to go along with them.

For pen salespeople, it's important to help customers gain a more in-depth perspective on the power that pens, a seemingly small promotional product, can have, McGuire adds. "On-site registrations still draw a big crowd due to the spectator factor. If you hand out pens, you draw more people that want the pens, and thus you have a higher chance of registering more people," he says. "The price point of pens is perfectly tailored to mass distribution at events."

High-Tech Sector

Recently, Gateway CDI received a request from a high-tech company for a pen that was not only eco-friendly but also made in the USA. That might be a tall order, but these days, more and more pens are being crafted with specific features in mind that speak to the socially conscious mood of today's consumer, says Gateway's Fandos.

Tech companies in particular, often full of young, conscientious employees, are keen to find promotional products that speak to their socially mindful interests. For this particular client, Gateway focused on pens that were made from recycled plastic, wood and other environmentally friendly materials. In that case, Fandos says, the pen isn't just a marketing tool but something that "tells a story" about the company's values. And writing instruments can be valuable for companies looking to do that, as they can convey a marketing message and company ideals within a product that can be relatively inexpensive.
    For tech firms, distributors say the best sales pitches involve showcasing pens that speak to social awareness and offer advanced features and design elements. Stylus pens, for example, are exceedingly popular among tech firms, says Tom Goos, president of Kirkland, WA-based Image Source (asi/230121).

For a recent technology conference, Goos says, Microsoft wanted to hand out a journal with an accompanying pen. But the pen, they thought, might be the item that would greatly enhance the giveaway. They chose a pen/stylus combination so that booth visitors would walk away with a writing instrument that offered great functionality and a high perceived value. Stylus pens have become so popular in recent years, Goos says, that their price point has dropped dramatically.

"It used to be you couldn't get a stylus for under $10," Goos says. "Now you can get them for 50 cents."

At the end of the day it's all about value, says Bodway. No matter the market she's selling to (including to high-tech clients), one of her most effective sales tactics is to present pens on a value scale of "good, better, best," which also simplifies the buying process by offering up one pen for each category. That way Bodway's clients, many of whom are in niche markets, can make a quick decision and move on with their promotional plans.

"The less complicated I can make it for clients the better," she says—and the better for her, since a simpler sales cycle seems to close faster.

Banks & Financial Clients

"We do pens for just about every industry," says Kurt Kaeser, president of Top 40 distributor Kaeser and Blair (asi/238600), based in Batavia, OH. But banks are the company's bread and butter.

"That's where the big orders come from – like 50,000 units," he says.

Banks often offer ordering stability, say Kaeser, but are also open to change at times, making them both reliable and dynamic customers. For years Kaeser and Blair has worked with a Colorado bank that recently changed pen styles after a long succession of repeat orders. Marketers there had placed orders for 50,000 of the same pens twice a year for multiple years.

"All of a sudden, they're open to a different style," Kaeser says. "They got something new and they've been ordering that the last couple of times."

That's not to say that price isn't a big factor in today's pen market, says Kaeser, as well as others. "As with everything, price is driving the market a lot," he says. The difference, he adds, is that the quality of pens has greatly improved in the last 10 years, making the value of even low-cost pens that much more important to buyers.

Regardless of what pen a distributor is selling, how it's sold can be crucial, says Phil Stumpf, a sales rep for Glenwood, MN-based Top 40 distributor American Solutions for Business (asi/120075). His number-one rule: "You have to romance the pen."

By that he means enhancing the description and features. For example, Stumpf never calls a pen a pen. Instead, he always refers to it as a 'writing instrument.'

"You can always charge more for writing instruments," he says.

In addition, he adds, distributors should "never talk price before showing clients all the features."

But the key when selling writing instruments to clients, especially those in the finance market that may be used to re-ordering the same products each year, is to allow buyers to try out different ones for themselves. Stumpf says he never enters a sales call without a clean pad of paper so that customers can feel just how fluidly a particular pen writes. The experience of using a pen can be very personal, distributors say, so clients should decide on their own the types of writing instruments they want to order and that they feel comfortable with.

Presentation and packaging matter, as well, especially when trying to promote higher-end writing instruments. For more expensive pens, something banks might buy as rewards for employees or valuable customers, Stumpf says he always brings a piece of black felt cloth on which to lay the pen for a better presentation.

The Entertainment Sector

It stands to reason that entertainment companies would want pens that are more slick in nature, perhaps to reflect a more progressive, hip marketplace. To that end, entertainment marketers often know what type of brand they want, what features they want, and – best of all, say distributors – rarely haggle on price.

In fact, selling to entertainment executives is often an easier sale, says Proforma's Tolmack-Poynter. Entertainment marketers, she says, "know what they want, and they want that particular pen. Period. If it costs a dollar more," she adds, they don't care.

All of which makes selling to that marketplace more lucrative for ad specialty distributors. But it's also important to keep in mind that entertainment companies value their brand above all else. In that sense, they want their logo imprinted on higher-end products, including pens, to maintain a loftier brand image. Giveaways for entertainment businesses can range from customers in the community to internal employee gifts.

More to the point, they want their branding dollars to be effective above all else. Perhaps because of that, entertainment companies, she says, would never get caught in the fiasco that a client from another industry recently found themselves in, says Tolmack-Poynter. The client ordered 500 golf markers, but chose a product based on price, rather than proven capability. That became a problem when the markers began to leak in the hands of end-users shortly after they were handed the product at a trade show.

Tolmack-Poynter's client learned about the problem when prospects returned the markers to the company's booth. It was embarrassing to say the least. And though it only cost the company $120 for the 500 pens, it likely cost them that much more in a lost marketing opportunity and the damage their brand sustained for handing out a faulty pen.

For most clients, especially those in the entertainment sector, Tolmack-Poynter brings writing instrument samples that fall into three categories: good, better, best. While many companies will opt for the good (read: cheapest) option, entertainment firms often go for the mid-range or top-of-the-line choice.

That means bargain-basement options should be left at home. Distributors who show those will most likely be wasting their time. "With entertainment companies, I don't even give them an option at this point for less expensive items," Tolmack-Poynter says. "It's important to know the mindset of your client and the market they're in."

Regardless of which market distributors are targeting, pens are often a go-to branding item, say distributors. "Overall, clients are becoming much more aware of the real need for a return on investment," says Bodway. "A pen is such a universal tool, so it's always looked at as a possibility in the marketing mix."

– Email: betsycummings23@gmail.com