Going for Gold
by Andy Braithwaite
It doesn’t seem like a year already since the German brand marketing initiative Office Gold Club scooped the Editor’s Choice award at the European Office Products Awards at Paperworld 2008
OPI catches up with General Manager Thomas Heine to find out more about this unique co-operation between vendors.
OPI: Thomas, can you just remind us of the aims of Office Gold Club?
Thomas Heine: The background is that around three or four years ago we were facing a difficult situation in Germany. The economy was depressed, buyers were reducing the volume of purchases, cost savings were important and the catchphrase "Geiz ist geil" (thrift is cool) was popular. All these factors led to an increase in sales of no name or private label products and to a reduction in the sales of branded articles as consumers did not see the added value in them.
A number of companies who were members of another brands association, Altenaer Kreis, formed the concept of Office Gold Club and then a total of 18 companies were involved in setting up the entity. The main goal is to promote the use of branded products over private label products by direct communications with end users.
OPI: How is it organised?
Thomas Heine: Well, for a start, Office Gold Club is a GmbH, a limited liability company, that is owned in equal share by the 18 founding members who each paid r2,000 to set up the company. As General Manager I am legally responsible for the company and then there is a board consisting of five members.
OPI: Membership has increased to 24. Are you looking to build upon this even more?
Thomas Heine: In fact we have 24 members for our German roadshow, 26 in Austria and 28 in Switzerland. Growing the membership is not something we are actively pursuing, but it is actually out of our hands to a certain extent. Let me explain – one of the important aspects of Office Gold Club and one of the keys to its success is the fact that we have direct competitors as members and cooperating with each other, for example Leitz and Elba. When we started the business we contacted the anti-trust agency in Germany to check that it was legal to set up such an organisation because there could have been problems about us forming a cartel. The anti-trust authorities agreed to the establishment of Office Gold Club, but declared that if any other company wanted to join, then we had to accept their membership.
This means that we are not allowed to reject an applicant. To provide ourselves with some kind of control and to ensure that membership consists of only strong and high quality brands, we have introduced a one-off membership fee of r25,000. This is in addition to the annual fee of r50,000 that covers participation at the six German roadshows and all other marketing activities that we carry out. In fact, if you look at what we provide and compare it to the cost of attending major trade shows, it actually represents very good value.
OPI: How many employees do you have?
Thomas Heine: We don’t have any! All the work is carried out by an agency. The Office Gold Club company itself is only responsible for collecting the fees from its members and assigning duties to the agency which is responsible for all the day-to-day work.
OPI: You’ve said you that reaching end users is a priority for Office Gold Club. How do you achieve this?
Thomas Heine: Primarily we are targeting companies which employ over 100 office workers and the people we are looking to communicate with are the stationery purchasers of these companies and secretaries. Generally, these companies will be service related, such as banks and insurance companies or local authorities. As our name suggests, we are trying to create a ‘club’ atmosphere, whereby each member feels part of an exclusive group – each attendee at our shows receives a gold membership card, for example. The word ‘gold’ in our name also conveys the idea of prestige. The focus is very much on quality not quantity and by doing this we have been able to achieve a high level of loyalty from our end user members.
We also cooperate with large German dealers and, in fact, we actually act as an interface between the dealer and their customers. We work with about 60 large dealers and around ten of them are present at each roadshow. The dealers give us the contact details of their customers and we invite them to attend the roadshow on behalf of the dealers. This then allows the dealers to meet a number of their customers at one go during the day. Let’s not forget that we are also encouraging dealers to sell more branded products in our fight against private label!
OPI: Your flagship activity is your annual roadshow. Tell us about that.
Thomas Heine: We have eight roadshow events that take place in March and April – six in Germany and then one each in Austria and Switzerland. The events are held in prestigious venues and the number of attendees ranges from 200 to 400, with Munich and Berlin traditionally being the shows with the highest attendance.
It’s important to point out that the roadshows are not sales events. The suppliers’ stands are relatively small and they only have enough space to show a small selection of products. The main goal is to show the attendees the benefits of using our brands versus private label products. From the suppliers, the people attending are involved in marketing or product development, not sales. And there are usually six to eight general managers at event so that they can have direct contact with their customers’ customers. It really is a high level of face-to-face contact.
We physically show the attendees the differences between branded products and private label. For example, with tape, that the branded tape is more robust than the private label tape and that, even though the initial purchase price may be higher, it represents better value for money.
OPI: Apart from the roadshow, what are your other activities?
Thomas Heine: We cooperate with German buying associations, invite buyers to visit our companies and we are involved in charitable and social projects – for every visitor to the roadshow we spend r5 for social actions, such as helping underprivileged children. We also run our own website and for the end user members we publish a bi-monthly newsletter.
OPI: How do you gauge success for Office Gold Club?
Thomas Heine: We have seen a reversal in sales trends recently and a recovery for established brands. From a Leitz point of view we had a 5 percent growth in our branded business in 2008. I’m not suggesting that this is solely due to Office Gold Club, but it is one part of a major push by suppliers to connect to end users and focus on brands. Again, from an Esselte perspective, we have shifted from 80 percent dealer marketing to 80 percent end user marketing and it is a strategy which is paying dividends.
As far as Office Gold Club is concerned, we conduct feedback with the roadshow attendees and the results from the 2006 and 2007 events show that 92 percent of visitors found the event ‘very good’ or ‘good’.
We also have strong evidence that we are developing a loyal base of members. More than 50 percent of roadshow visitors in 2009 will be returning for the second or third time, and in a recent targeted sampling campaign 70 percent of those who received a product sample from us completed and sent back a questionnaire. It shows that Office Gold Club is becoming known by the end users, they trust us and what we are doing is relevant to them.
For our suppliers, the payback is there. For example, we have smaller member companies for whom r50,000 represents a lot of money, but they say that the contact with the more than 1,500 end users that we meet at the roadshows and have the chance to visit afterwards generates sales and profits from these sales that are higher than their investment.
Interestingly, we have seen some tenders including more branded products than before. I believe that we’ve been able to convince buyers to shift from private label products back towards branded products.
OPI: What is next for Office Gold Club?
Thomas Heine: We have our 2009 roadshows coming up and then we will assess if it is prudent to expand the concept to other countries – Benelux and France are possibilities, but we will take things step-by-step and proceed according to our German obsession for quality!