Why Digital Transformation Solves Promo’s Scaling Problem. The Distributor’s Dilemma. (Scaling a Multi-Million Biz, Part 4)

Something radical is happening in the promo industry.

This week, the largest gathering of technologists that have ever assembled in our industry met at Tech Summit. 

Why the largest? What’s all the momentum about?

Two words: “Digital transformation” (boring words, but here we are). Definitions aside, digital transformation is buzzy. 

More than that, it’s the buzz. Everyone is talking about it. All the business research firms like Gartner and Forester are talking about it. Headlines from Forbes (“Digital Transformation: How To Future-Proof Your Business”) to Inc. Magazine (“The Pandemic Turbocharged Digital Transformation. Make Sure You Don’t Get Left Behind”) to Wall Street Journal, feature digital transformation almost as if they now have journalists covering the topic like an old school reporter would their beat (sports, fashion, food). It’s that important.

What is digital transformation? At a base level, it’s about modernizing legacy systems, but that’s just skimming the surface.

Beneath the surface, it’s about unifying workflows. Creating cross-functional collaboration. Building harmonious, simple ecosystems for your team –and clients– which removes the friction from work, creating the opportunity to scale. 

And for a far more human-centric answer: It’s about streamlining the complex, frustrating, and burdensome work that aggravates you and your team down, slowing you down. Digital transformation, for the human in us, creates an easier, more enjoyable work-life. 

But Why should a distributor care?

Most distributors think this is just a supplier's game (and there is epic truth to that, see “The New Catalyst” episode here), but if distributors exempt themselves from their own digital transformation journey, they’ll risk, as Inc Magazine put it, being left behind.

Since a picture is worth a thousand words, here’s why digital transformation is critical for any distributor, in five images.

For those fairly new to the industry, here’s a simple chart I like to start with to show –in a snapshot– what the game field looks like from a bird’s-eye-view: 

Now, in the old days, projects from clients were rather simple. Client called to place an order for 1,000 hats. It’s the same logo you’ve used a hundred times on shirts, mugs, and pens and you found the hat and placed the order with your client. There still was a ridiculous amount of back-and-forth between suppliers and distributors, but it was –in hindsight– a simpler time: 

And now, something’s changed. The clients’ needs today are far more complex. Today’s buyer is savvier about trends. Today’s buyer is needier for details. Today’s buyer wants more customization, custom shipping specifications, details beyond product (such as sourcing), and all done at the same speed (or less) as a simple order. It’s mind-boggling what the average distributor handles on any given day with just one project: 

Now, multiply that client times 12, and multiply their projects times 100, and you begin to see why your job –and the entire promo industry–  has evolved from a simple sourcing expedition to a complex, multilayered clusterf*ck of unimaginable details!

“Burdensome cross-functional collaboration yields worse organizational outcomes.”

Well, that’s a dreary headline.

But true. Burdensome. Bloated. Duplicative. Triplicative (if we may). Cross-functional collaboration bogs your team down. That phrase above is a headline from a top trends report produced by Gartner that reveals the biggest impact CMOs will experience in 2023. And it’s an eerily familiar story for promo. It’s also why the average distributor’s organization has evolved from its simplified era of sourcing merch, to complexity as a project management organism. From this:

To a full-blown sourcing, creation, distribution, and marketing agency tasked with delivering higher objectives. Couple the project above with the org chart below and you can easily see why “burdensome cross-functional collaboration yields worse organizational outcomes”: 

It’s also why distributorships from small to large are embracing digital transformation. In the words of Brett Boake, General Manager at Score, one of the leading distributors in North America, it’s about giving cross-funcional CLARITY to high-functioning teams:

Now, if I were to mash together all those charts above and create one massive chart with all the flows from product inception to the supplier (which we haven’t even covered yet) to completion …. We wouldn’t have enough of a page to make all of the steps and variables legible!

But It’s More Than just you: It’s Your Client

Digital transformation will ultimately upend the traditional promo does business, but it’s even deeper than distributor-supplier collaboration; in the end, it’s about clients. 

According to Adobe’s research report featuring 814 B2B executives, 71% are experiencing a surge in their existing customers using digital channels for the first time. And 65% are gaining new customers through digital channels. An example from our industry, Tom Rector, CEO at Screenbroidery, landed a new client because of commonsku’s portals. In this interview with, we asked Tom, why he thought the portals helped land new business:

“Communication is so important, especially in today’s world. The portals allow us to better communicate with our customers because we can centralize all the information and the projects that our customers are working on. A competitive marketplace means that all of your customers were working with someone else before they started working with you. A [prospect, now client], came to us. They were working with someone else and said this about their previous relationship, ‘We didn’t communicate very well, it was hard for us to get previous orders, and we were missing invoices, we just didn’t have a solution.’ We now have portals [for this client] where we can centralize all that information, and our marketing team can add commonsku shops and marketing materials. They didn’t even ask for things like that, we’re adding such value to our customer base that they haven’t experienced. But they [today’s customers] are now looking for those types of solutions.”

Sean Mooney, Partner at Showpony, also put it this way, the more streamlined you and your team can be working together, the more creative you can be for your customer: 

Digital transformation is the biggest catalyst for growth our industry has seen since e-commerce. Those who recognize that they are not the agency they once were, and those who recognize the client has also evolved as a far more demanding entity in our business, will reap the rewards if they make their own digital transformation a priority.

How would you rate the way you and your team currently collaborate?

Would it be, in the words of Gartner, burdensome or liberating? Is your team freed up to focus on client growth?

A few ideas to help kick-start your digital transformation plan:

1. Make digital transformation a priority. We know what happens in a deadline-driven business: the urgent always bumps the important.

2. Create a digital transformation team that involves a cross-section of your colleagues from each department.

3. Task your team with (first) sourcing areas where there needs to be improvement.

4. Be sure your digital transformation plan includes the three areas most impactful to your company: your team, your supplier partners, and your clients.

5. Meet with your top suppliers to talk about where they are at on their digital transformation journey. It does you little good if your linked partners are not also striving towards their own digital transformation goals.

6. Set a goal with a deadline. Example: By the end of ______, we will have determined our priorities and mapped our digital transformation.

In this series on “Scaling a Multi-Million Dollar Distributorship,” we identified four essential ingredients missing from your growth plan, then we started to break each ingredient down, beginning with strategy: The Promotional Product Industry's 2.0 Problem. And last week, we talked about how Curiosity Killed the Promo Cat. Today, we explored the complexity that has happened simply on the client and distributor side of the industry. In our next installment, we’ll share how some suppliers are now winning the race in the today’s digital transformation society.