Scott Kooken of Links Unlimited: How the IRR Industry Set Itself Back and What Can Be Done About it
Scott Kooken, President of Links Unlimited, knows a thing or two about the incentive, rewards, and recognition business. Starting the company in 1996, the company has grown to be among the largest master fulfillment companies specializing in the world of incentives, rewards, and recognition (IRR).What Went Wrong
“Treat Us Like Retail”
The Roadmap for Opportunity
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Scott Kooken is passionate about the opportunities he sees brands leaving on the table in the incentive, rewards, recognition, and loyalty business, and he believes the industry shares part of the blame. His five-year business plan, he says, includes re-educating brands on the significant value offered by this marketplace. That means treating master fulfillment companies such as Links Unlimited the same way it does valued retail partners. To do that, he says, the industry must restore its own brand integrity and act like valued retail partners as well.
Editors’ note: See RRN: Will Big Brands Rediscover the IRR Marketplace for a recent feature on why brands have backed away from the IRR marketplace over the last two decades. Kooken adds a point of view overlooked by that report.Given the complete breakdown in traditional retail distribution and the focus on omni-channel marketing, “This industry is a complete natural for almost any brand with appeal at retail. For many, it can produce 10% or more of sales. And, many of the people who redeem points for a desired brand afterward buy more with their own money, providing a multiplier effect. Being featured in incentive, recognition, and loyalty catalogs can generate millions of eyeballs for free or at a very tiny cost to a great demographic group of working Americans and consumers with a clear ROI. It’s a significant revenue source many brands never even look at while at the same time many are spending large sums to develop much smaller channels.”
He points out that addressing the corporate market is a natural “because a good percentage of their customers work for or own businesses that could be using their products or services for incentives, recognition, loyalty, events, and amenities, even their own employees and channel partners. They are just sending all those customers to retailers who have no idea how to support the use of brands for business purposes. If one believes the $176 billion market estimate for the US incentive market provided by the Incentive Federation, that could be $100 billion of business being underserved by people with no experience.”
The very few brands that put a link to corporate gifts on their home page quickly discover the potential, he says, but then the question becomes, where to direct these people, because no brands have any more expertise or capability than consumer retailers to design, management, and implement any type of IRR or gifting program with impact.”
What Went Wrong
Kooken does not discount the role played by the Great Recession in the mass pullback by brands from the industry, but he says the IRR industry has played a role as well. “With little ability to make significant upfront purchases or even to reliably forecast sales, and with often long and unpredictable sales lead times, many in our industry were asking brands to make exceptions on how they should allocate inventory or drop-ship merchandise.” The industry sounded good on paper, but often did not deliver, he adds.
Even worse, “There have been enough unscrupulous operators in this field that many a brand has gotten burned by one way or another with forecasts that never materialized, merchandise diverted into unauthorized channels or sold offshore, mis-appropriated co-op dollars, slow payments or worse, along with a general sense that there were too many exceptions and time involved to warrant the investment.” He underlines, “Once executives feel burned by a channel, it’s a memory they take with them wherever they go.” He observes that just mentioning the IRR marketplace to a senior marketing executive at leading brands, if they have even heard of the channel, can generate a “I’ve been there, done that” response.
Beyond Kooken’s observation that most in the IRR field have at least the same general level of ethical standards as in most industries, he believes the old distrust of the IRR field is obsolete.
"Treat Us Like Retail”
“Just treat us like retailers is all we ask,” says Kooken. “Send us the exact same terms as you do your best retailers in terms of pricing, promotions, rebates, marketing support, special offers, close-outs, or whatever. In fact, when we sit down at the table, we hope brands will see that we’re top-tier distribution partners because of the incremental sales and marketing eyeballs they actually get paid for instead of paying for, and because we can work with performance-based incentives that reward us for success in a way that helps us sell more for them.”
This is where he believes company’s like his can add value that retailers or even many of his competitors cannot. “We are already in the business of supporting our channel partners in every part of this industry, loyalty, incentives, event gifting, brand decoration, and promotional products. In fact, we provide 3PL (third-party logistics) for leading brands covering all their distribution channels. So, we and our channel partners can for each of these facets of the field create value for the end-customer that would be impossible for consumer retailers and brands to replicate inhouse.”
When properly rewarded for volume, Kooken points out, “We reinvest those marketing dollars into supporting our channel partners in educating their customers on the value they can create by designing and implementing effective programs.”
The New Roadmap to Opportunity
To be treated like a valued retail channel partner, Kooken emphasizes, a master fulfillment company must deliver like one. That means purchasing inventory to meet customer delivery expectations instead of solely relying on drop-shipping; handling all billing; having people with expertise to support channel partners in each of the key industry segments; setting and focusing on transparent standards for delivery, pricing, and world-class customer service, and wisely using brand co-op dollars support to increase sales.
Does this model give large companies like Links an advantage that threatens the smaller master fulfillment companies unable to provide these end-to-end services? Ironically, he believes companies like his could create new opportunities for the dozens or more smaller fulfillment companies focused on brands and the many more in the promotional products business located throughout the US having face-to-face relationships with organizations that can benefit from engaging their stakeholders. “Frankly speaking, unless a fulfillment company is in a unique niche, the advantage for value creation in terms of fulfillment and technology goes to the large companies like ours with scale. But when it comes to the value created by local businesspeople designing, managing, and measuring effective programs, that comes down to our channel partners in the field. Our services, combined with technology and AI, will enable the people with the ability to build relationships and design great programs to make even more money with less stress. We know it, because it’s already happening.”
Kooken believes that industry associations could help address the industry’s brand issue as well. In addition to promoting the industry’s education and certification on effective program design, implementation, and measurement to all the incentive, promotional marketing, recognition, loyalty, and event companies that are running these programs, the industry could also promote ethical standards to reassure brands of the industry’s commitment to integrity.
Click here for a complete guide for brands on the incentive, rewards, and recognition market, including loyalty, events and gifting.
For More Information
Links Unlimited
Corporate Sales
866-465-4657
corporatesales@linksunlimited.com
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