By Jason Black

President and CEO, Boundless Network

How to connect buyers and save up to 40% on branded merchandise you are already purchasing.

BRINGING YOURPROMOTIONAL SPEND UNDER MANAGEMENT

Determine how much is being spent. Estimate the amount of unmanaged spend and how much could be saved by applying spend management practices.

Connect buyers. Give individual buyers and departments visibility into what branded merchandise is being purchased company-wide and enable group purchasing around similar product needs to realize volume discounts.

PROMOTIONAL SPEND MANAGEMENT

What’s Inside

Executive Summary

The Imperative: Bring Promotional Spend Under Management

How Branded Merchandise Drives Revenues

The Hidden Pitfalls of Promotional Procurement

Why Buying Branded Merchandise is Decentralized Within Companies

Why Spending on Branded Merchandise is Underestimated

The Company Store Approach: Broken and Outdated

What Procurement Can Do Now

Spend Management Technology: Rapid Impact, No Hassle

The Power of GroupBuy Illustrated

The Boundless Network Spend Management Solution

Key Benefits by Department

Do You Need the Support of a Spend Management Platform?

Getting Started is Easy: Three Simple Steps

Case Studies

Loews Hotels

Super Suppers

About Boundless Network

1

Executive Summary

The IMPeRATIVe: BRING PROMOTIONAL SPeND UNDeR MANAGeMeNT

Do you know how much your company spends on branded merchandise? You’re not alone if you are unable to answer this question easily. Widely used branded merchandise includes logoed apparel, writing instruments, awards, trade show give-aways and more. Every division within a company, ranging from the executive’s office to marketing and HR, has representatives that are actively purchasing branded merchandise to support their customer and employee initiatives. The total spending for branded merchandise is often underestimated. It is reported that companies spend between 1-3% of gross sales on logoed products.

The problem is that your promotional spend is not under management.

It is unlikely that there is a “Branded Merchandise Buyer” job title within your organization. Rather, purchasing branded merchandise is a task of individuals supporting strategic programs in every department. As a result there can be hundreds or thousands of “buyers” across divisions and groups making individual product purchases for their respective departments and programs. As a result of this decentralization, organizations lack visibility and control and end up overpaying on branded merchandise by as much as 40%.

This whitepaper addresses the key reasons that organizations find themselves overpaying on branded merchandise and unable to control their brand. More importantly, it examines the value of a new spend management platform that connects your buyers and enables you to begin proactively managing your promotional spend and protecting your brand.

will be spenton branded

merchandise in

2008.

$18billion

– Aberdeen Group

58%of enterprises have

increasing spendunder management

as a top priority.– Aberdeen Group

Stop overpaying • on branded merchandise.

Accomplish the unique needs of each department and •protect the brand.

Connect buyers to realize • volume discounts.

READ ON TO LEARN hOw TO:

2

hOW BRANDeD MeRChANDISe DRIVeS ReVeNUe

There are several reasons that companies use branded merchandise to achieve business goals. Branded merchandise, as part of a planned campaign or program, is highly effective when the assets are procured cost-effectively and are aligned appropriately with the demographics of the recipient and the objectives of the program. In order to have a positive financial impact, branded merchandise must be used with an understanding of overall marketing objectives. Building brand loyalty, customer satisfaction, customer acquisition and employee retention top the list. Many procurement groups pressure their vendors to identify low cost goods to the detriment of their branding or marketing objectives.

A key metric that applies to both procurement and marketing is Return on Branding (ROB). ROB is the customer or employee loyalty value minus the cost of branding efforts. The use of branded merchandise needs to be correctly defined for the objective, demographic and the estimated value to achieve a positive Return on Branding.

Prior to the use of a spend management platform, the alignment of procurement and marketing was a challenge. An effective promotional spend management platform enables marketing to purchase the unique products that align with its program goals while satisfying procurement’s imperative to obtain the best possible price.

Return on Branding (ROB) defined:

Customer or EmployeeLoyalty Value

– Cost of Branding

=Return on Branding

The use of promotional products needs to be correctly defined for the objective, demographic and the estimated value to have a positive Return on Branding.

Purchasing outside of a spend management platform:

Decreases marketing’s control of the brand •

Decreases procurement’s visibility and cost controls •

Decreases Return on Branding (ROB) •

Increases chance of poor product quality and selection •

Branded merchandise increases:

Brand loyalty •

Customer satisfaction •

Customer acquisition •

Employee retention •

3

The Hidden Pitfalls of Promotional Procurement

Why BUyING BRANDeD MeRChANDISe IS DeCeNTRALIzeD WIThIN COMPANIeS

Unlike most commodity item purchasing, the procurement of branded merchandise is highly decentralized and spread across an organization with hundreds or thousands of individuals assigned the task of purchasing branded merchandise. Connecting groups of branded merchandise buyers with similar product needs may not seem beneficial at first glance, but in fact, buyers across organizations often have the same product needs without even knowing it. If buyers across departments were aware of their similar needs, purchasing together would enable them to realize a substantial volume discount while still achieving their individual goals.

For example, HR may need t-shirts and pens for employee initiatives, while sales and marketing may also require t-shirts and pens for client leave-behinds or trade shows. Unfortunately, buyers within these respective departments may not know each other, are not connected and do not have an efficient way to communicate and capitalize upon their similar needs.

Individual buyers also have only limited purchasing power that is likely used across a variety of vendors, further decreasing the ability to leverage the supply chain. If those assigned the task of purchasing branded merchandise throughout the organization had visibility into branded merchandise orders that were similar and relevant to their needs, multiple groups could purchase from a single order. Both groups would receive the product they need and the company would benefit from a substantial volume discount.

The pitfalls of individual purchasing:

Individual purchasing costs organizations up to 40% more than volume • purchasing.

Individuals purchasing from multiple vendors leaves procurement unable to leverage •supply chain.

Best practices and ideas cannot be shared across groups and buyers. •

Research from Aberdeen Group has shown that enterprises have been

able to achieve

5-20% cost savings

for each new dollar of spend brought under

management.

Best-in-class enterprises

are managing more than

70%of their total spend.

-Aberdeen Group

SALES

MARKETING

OTHER DIVISIONS

HUMAN RESOURCES

EXECUTIVES

Figure 1: hundreds of buyers of branded merchandise working in silos results in lack of cost and brand control.

DeCeNTRALIzeD BUyeRS

4

Why SPeNDING ON BRANDeD MeRChANDISe IS UNDeReSTIMATeD

We’re back to decentralization and many divisions with multiple buyers, especially in the case of large companies. Often branded merchandise is not a specific line item in a budget, but part of an overall marketing promotion program. Buying branded merchandise is frequently a last-minute deliverable that drives higher prices per unit and high shipping costs. The specific spending is not always accounted for, and reporting is minimal—program managers often use spreadsheets to track departmental spend. This reactive (and typically unmanaged) process makes gaining efficiencies very difficult for the procurement executive and some efforts have been made to centralize procurement of branded merchandise, including the company store approach, but it has largely been doomed to failure and lack of use due to its inherent limitations and inability to fully capture promotional spend.

The COMPANy STORe APPROACh: BROkeN AND OUTDATeD

Back in the early 1990s, there was some innovation in the form of an e-commerce based company store—a place where buyers across the company could purchase and drop-ship pre-approved products. Marketing and procurement gained some centralization, and there remains some use of this approach, but the reality is that it is outdated and only serves a small portion, an estimated 20% or less, of the company’s branded merchandise needs.

The company store only supports quick-turn, low inventory requests, with a finite number of product options. The majority of buyers still purchase outside of the company store, often with their own personal vendor relationships that offer more relevant product choices. As a result, 80% of the promotional spend remains uncontrolled, occurring outside of the company store.

Limitations of a Company Store:

Limited product options in inventory may not be relevant to campaign and •program needs.

No collaboration among buyers means average order sizes are “fixed,” and •supply chain leverage is limited.

Buyers work independently of one another, resulting in high soft costs and •inability to leverage best practices.

Owning store inventory is costly. •

Cost per unit is more expensive via the company store solution. •

State of promotional spend:

20%Company Store

80% UnmanagedAd-hoc, one-off orders are disconnected.

Buyers across organizations often have the same product needs without even knowing it. Connecting buyers around similar product needs produces substantial volume savings.

$550Before GroupBuy

$385After GroupBuy

Buyer #3Marketing

$4,000Before GroupBuy

$2,800After GroupBuy

Buyer #2Sales

$14,000Before GroupBuy

$9,800After GroupBuy

Buyer #1HR

2000 Items 500 Items 50 Items

30%companysavings

5

What Procurement Can Do Now

Boundless Network is the first company to address this opportunity and both challenge and enable companies to bring promotional spend under management.

SPeND MANAGeMeNT TeChNOLOGy: RAPID IMPACT, NO hASSLe

A new approach is changing everything. Boundless Network has created an e-procurement and spend management platform that connects buyers within enterprises to leverage their collective purchasing power. The Boundless Network spend management platform gives enterprises a streamlined way to purchase, manage and fulfill branded merchandise. Boundless Network’s background as a branded merchandise company combined with a patented technology solution enables organizations to gain more control over their promotional spend with access to hands-on service needed for effective branding.

The POWeR Of GROUPBUy ILLUSTRATeD

To illustrate, let’s say three individuals in different departments of a company have campaigns that require a branded give-away. They visit the Boundless Portal to find out what recommended products fit the campaign and the demographic. In this case, all three groups have selected USB storage drives that are ideal for their programs. When purchased independently, their collective purchasing power is not leveraged and opportunities for volume discounts are not capitalized upon. As a group purchase dramatic savings are achieved—up to 44% (Figure 3).

Figure 3: Connecting buyers, increasing savings through

group purchasing.

GAIN CONTROLGain more control over

promotional spend.

hANDS-ON

Access hands-on service for effective branding.

Giving individual buyers and departments VISIBILITy into what branded merchandise is being purchased COMPANy-wIDE enables group purchasing around SIMILAR PRODuCT NEEDS and the ability to realize VOLuME DISCOuNTS.

Boundless is truly

making a difference in

the promotional products

industry. Their technology,

best practices and sales

professionals have helped

us optimize our promotional

spend processes across

sales, marketing, purchasing

and HR. From apparel

programs to company

stores to individual orders,

Boundless consistently

delivers impactful solutions

within our budget and

our quality standards.

Boundless is a true full

service promotional product

company.

Alan WongASD Sr. ManagerHitachi America Ltd.

6

The Boundless Network Spend Management Solution

There is no up-front investment to start working with the platform. A simple three-step process puts organizations on the way to connecting buyers and leveraging their group purchasing power to get their promotional spend under management.

Key features of the spend management platform:

Self-service portal personalized for buyers, managers, marketing and •procurement personnel

Ability to purchase approved company branded merchandise via smart search •catalogs

GroupBuy technology that alerts and connects buyers with similar product needs •to produce volume discounts

Brand protection features like the ability to share brand standards, approved •company logos and more

Robust metrics, order approval and reporting •

Find promotional best practices, program ideas, case studies and more •

The Boundless Network customized branded merchandise portal

GroupBuy volume discount offers

7

key BeNefITS By DePARTMeNT

PROCUReMeNT

Significant cost savings (20-60%) •and greater purchasing power

Better Return on Branding and investment •

Increased visibility and reporting •

MARkeTING

Better control of the brand •

Improved Return on Branding while •supporting individual group needs

Reduced impact on marketing budget •

SALeS/hR/exeCUTIVeS/

OTheR GROUPS

Access to highly effective branded •merchandise for target recipients

Lower costs and lower impact on budget •

Higher return on investment •

Sharing of best practices and creative campaign •ideas for more planful, effective campaigns

DO yOU NeeD The SUPPORT Of A SPeND MANAGeMeNT PLATfORM?

Review the following, and if you answer yes to one or more of these questions, your organization could benefit from Boundless Network’s spend management solution:

Is saving time and money a key initiative? F

Is protecting your brand a key initiative? F

Do you have distributed buyers in multiple departments, divisions and locations? F

Does your organization suffer from a lack of reporting and F

visibility on branded merchandise spending?

Do you repeatedly purchase a core group of branded products? F

TOP COMPANIESutilizing Boundless Network’s

promotional spend management platform:

8

GeTTING STARTeD IS eASy: ThRee SIMPLe STePS

There is no up-front investment to start working with the platform. Boundless Network uses a simple three-step process to connect buyers, leverage purchasing power and enable companies to start getting promotional spend under management.

GroupBuy has given

our staff a level of autonomy

that they didn’t have before.

In addition to field staff being

able to purchase the items

they want and that are in their

budget, the development

and marketing office is not

burdened with guessing

what items people will use

or with the responsibility of

maintaining inventory. I would

recommend this process to

anyone who has staff at many

different locations and with

many different needs.

Melissa SimonDirector of DevelopmentCommunities in Schools

STeP 1: IDENTIFY CORE

PRODUCTS

Identify commonly used branded merchandise across the entire organization.

STeP 2: DESIGN AND

LAUNCH

Following a quick buyer survey regarding use of core products, Boundless Network designs a program for optimal savings and launches the program to your organization.

STeP 3: USE AND OPTIMIzE

As more buyers participate in the program, savings increases across the organization. Visibility into spend and product performance serves as a foundation for optimizing the program.

123

CONTACT BOuNDLESS NETwORK TODAyReady to get your promotional spend under management?For more information on what the Boundless Network spend management

platform can do for your organization, please visit:

www.boundlessnetwork.com/groupbuy or e-mail groupbuy@boundlessnetwork.com.

9

Case Studies

Leading enterprises such as Loews Hotels and Super Suppers rely on Boundless Network

to align marketing and procurement, protect their brands and dramatically reduce costs.

Loews HotelsLoews is a leading boutique hotel chain that operates 18 luxury hotels across North America, specializing in corporate travel and meetings. Their goal was to launch a new Loews Loves Teens loyalty program.

They faced several challenges, including:

Difficulty centralizing promotional marketing programs •

Lack of brand and messaging consistency •

Independent and distributed buyers •

Inefficient order processes •

Lack of visibility and predictability •

The Boundless Network solution was to connect buyers and do the following:

Identify unique products based on teen demographics •

Product: 2 song music download card •

Implement a quarterly GroupBuy campaign for hotel buyers •

Negotiate special price with supplier to further reduce costs •

Program results:

Loews had 22 buyers participate and over 50K music download cards were ordered. •

The groups had autonomy to participate, but the spend •management platform provided more visibility and control.

The company realized savings of $20,900. •

Loews established a consistent, efficient process for the future. •

Boundless Network saved

Loews hotels more than

$20Kthrough buyer collaboration.

27%savings

$78,730Before GroupBuy:

$57,830After GroupBuy:

10

Super Suppers

Super Suppers is a leading meal assembly brand and franchise. They have geographically dispersed buyers and over 300 locations. To help with cost savings, they implemented an inventory program to help with small orders, which resulted in high product costs. The franchises not only had problems with the high costs, but also the static, limited product selections for branded merchandise and the limited capacity for product personalization and localization. They needed a better alternative. The solution was to work with Boundless Network to connect buyers and increase flexibility.

The franchises had problems with:

High product costs •

Limited product selections for branded merchandise •

Limited ability for product personalization and localization •

Their approach was to:

Identify most popular products among the franchisees •

Implement GroupBuy campaign for top products •

Provide branding customization for each independent franchise •

Provide independent billing and shipping for each order •

Program results:

Super Suppers had over 40 franchises participate, with measurable results. •

They saved 40-51% on their orders. •

The franchisees were thrilled with the flexibility, results and the ease of the program. •

Additionally, they connected with other franchisees to collaborate and •share ideas and best practices that work for their business.

Volume

SavingsPrice

10% savings

20% savings

30% savings

40% savings

50% savings

Price with GroupBuy

Price with One Order

1 Franchise Multiple Franchisees

“This group buying stuff

is great! So glad someone

finally got this set up! Placing

my order right now!”

“These are great bags - get in

your orders so we can all get

the best price possible!”

- Super Suppers employees

Super Suppers saved

40-51%using Boundless Network’s GroupBuy technology.

11

About Boundless Network Venture-backed Boundless Network is transforming the $20 billion promotional marketing industry through a highly trained, professional sales organization and proprietary technology that empowers companies to proactively manage their promotional spend. Our patent-pending technology platform connects buyers across organizations to create efficiencies of scale and reduce the cost of branded merchandise by as much as 40 percent. BoundlessNetwork’s award-winning professional development and training opportunities help the company to attract the top 1 percent of sales professionals. Headquartered in Austin, Texas, Boundless Network is one of the fastest growing companies in the promotional marketing industry.

To learn more about Boundless Network, visit boundlessnetwork.com/groupbuy or send an e-mail to groupbuy@boundlessnetwork.com.

Contact Us : Tell a Friend

CONTACT US : TELL A FRIEND

CONTACT uS

200 E. 6th St. Ste 300Austin, TX 78701

p 512.472.9200f 512.472.9204

boundlessnetwork.com