Is promotional merchandise worth the money?

Well all know about promotional items, be it the branded pen, a USB drive, coffee mugs, or note pads. These are the items that carry your company name, logo, and call to action that you gift to clients as part of your marketing. It’s a great way to get your business name out there, but is it worth the expense of doing it? We’ll look at the concept and give you the tools to decide if it’s worth it for your business,

There is a lot of overlap between business branded resources and promotional merchandise. I’ve always said that ‘no bit of paper leaves your business without your company details on it’, so quotes written on notepads must have your company details on them. Likewise if you hand out lots of paperwork to a customer, then presenting it in a branded presentation folder adds a level of professionalism to your business. If you work on a job site, then getting your logo screen printed on to teeshirts or safety gear makes you stand out from others working around you. These examples are not promotional items. They are promoting your business but they are part of your day to day operations.

Promotional merchandise are items which serve a marketing role but do not directly advertise your business. A flyer promotes details of the services or products you offer. A branded pen simply puts your business name out there reminding that person of it. The marketing industry term for it is ‘impressions’ which is simply a person seeing that branding and reinforcing it in their minds. According to some research I have read, depending on the item you could get over 6000 of these impressions and the recipient may hold onto it for more than 10 years. But that is the extreme end, the average most of these items is more than a year and has 1-2000 impressions and are thrown out within a 5 year period. ^[1] 

Of course these numbers are to be taken with a large grain of salt as I’ve been unable to find any research that is independent of the promotional products industry. It must still be considered to be effective as according to the Australasian Promotional Products Association (APPA) the industry had turnover NZ$144m in New Zealand 2014. APPA states the effectiveness of promotional merchandise is demonstrated by their research which shows that 52% of recipients of promotional merchandise say their impression of a company is more positive after receiving a promotional product, 76% recall the name advertised on the product, 55% keep the item for more than one year, nearly 50% of recipients use them daily and 52% of people do business with a company after receiving a promotional product.^[2]

So why do businesses use promotional merchandise? The reasons fall broadly into the following reasons according to the various articles covering this subject.

• Brand Awareness & Recognition
• Corporate Culture & Identity
• Customer Appreciation & Retention
• Employee Appreciation & Retention
• Incentive Programs & Behavior Modification
• Product Awareness & Recognition
• Public & Investor Relations
• Sales & Referral Generation

Now a lot of this falls under the needs of larger businesses with hundreds of employees, not the owner-operator or employs-a-few-people that make up the majority of enterprises in New Zealand. For the most part, when a small to medium sized enterprise (SME) invests in promotional merchandise, it’s for product/service awareness & recognition, sales & referral generation, and brand awareness & recognition. We will examine these situations in more detail

Brand Awareness & Recognition
Like all other forms of marketing the point of using branded gifts is to promote your business’s name and to get retention of it. So when people think of that type of business, it’s your name they think of. As stated before, you want to get the most impressions you can out of your marketing efforts and a pen that someone uses for many months is going to have more than a flyer that is read once and chucked into the bin. That being said, a well designed flyer that has an integrated incentive for people to hold on to it for when they need can be equally as effective.

Product Awareness & Recognition
One of the biggest issues that all SME businesses have is the ‘I didn’t know you did that’ statement. In other words, potential customers not associating your business with a product or service that is found within that area of the market. Many larger companies will do aggressive promotions of new products by giving away useful items promoting both the product and their company, often giving away the promotional merchandise as a reward for money spent which overlaps the ‘Sales and Referral Generation’ reason. For a SME business I would more treat this as a simple advertising tool, giving away a low cost item that promotes the under utilized product or service. You can make it even broader by offering something that list the full range of the business, for example a notepad that lists the range of services on offer.

Sales & Referral Generation
Lastly is the most obvious one, giving away a piece of merchandise as a ‘reward’ for purchasing a product.  We’ve seen this time and again. At the time of writing this I spotted such an example in the supermarket where a beer brewing kit company was giving a set of brewers tools for each kit purchased. A month earlier it was a tea company giving away a tea pot if you brought two boxes from their new loose leaf tea range. Referral generation is less common as these days most business do a cash back / credit / voucher reward for referrals, but depending on the type of business a promotional gift is still effective

So what can you choose for your promotional merchandise? In this age it can be anything. It goes far beyond simple notepads and pens, clothing, key chains or torches, tote bags and drink bottles, usb drives and bluetooth speakers. Pretty much anything you can name could have your business’s information screen printed on it. It’s also interesting to note that many of the firms selling promotional merchandise list business cards as promotional items. If you already have these then you’ve got some promotional material (We can make it even more effective by making it a useful tool for people to hold on to, give us a call to find out more.) But what to choose for your business?  There’s no simple answers but here’s a few questions to ask yourself to help narrow down your choices

• General purpose vrs specialized item? A pen has more use than a serving tray, so more impressions which matters in this style of marketing. Conversely a pen might last six months before it’s used up or lost where the tray will be held on to for years so over its life the tray will have more impact.
• Does the item have a shelf life and how soon will you use them all? Food is a common marketing gift but it has a shelf before it’s no longer safe to eat. A calendar is only useful for a year.
• How many do you need? Because it takes time and resources to set production runs up, all suppliers of these products will have a minimum order quantity. If you can’t give out that minimum run before it’s no longer relevant or hits its expiry date then you’ve wasted money.
• Does it fit the ‘theme’ of your business? If you’re a web design firm, a screen cleaning microfiber cloth or a USB flash drive fits. If you’re a catering supplies company, the first two items don’t fit but a wine corkscrew or cheese board set does.
• Where will you be giving it out? This situation allows you some latitude in the item. You could give out sunscreen or hand sanitiser at an outdoor event. At a conference, things like tote bags, stress balls, and spill safe drink containers will be popular.
• How valuable is the recipient to you? A client worth thousands of dollars is worth a ‘$200’ gift, where in a trade show you can only afford a few hundred dollars in total for all the visitors to your booth during the event.
• Can you justify the setup cost? All branded items require a setup cost to start a production run, the more complex the item the higher the setup cost.
• How many do you need to order before you hit the sweet spot for the cost? Following on from the setup cost is actual cost per unit. Remember the suppliers of these will generally list the cheapest price on the product page which is often for 1000’s of units. You might find that when you are in the lower quantities the cost per unit can be as high as 4 times the price of the minimum listed price.

Having said all of this, while the cost of promotional merchandise is steep for SME, it’s not out of reach. I would look at doing things that have a good general purpose use and a lower volume and setup costs. There’s also options which are generic and cheap but let you personalize it yourself. For example here at Copy Express we can source magnetic note pads that come with a top adhesive section that lets you attach your business card to it. At a trade show bottles of water are always popular so pick up the slabs of the mini bottle and apply labels that have your banding to them. If you want to invest in more specialized items, then make the marketing on it more generic so you can use it in more situations. A branded pen that is just your company details is going to be used in more situations for longer, that one that promotes a product that might have to discontinue in a year’s time. If you aren’t sure about what you should get then talk to your customers / clients and ask them what might fit your company’s image.

This has been an overview on promotional merchandise and its suitability for small and medium businesses here in New Zealand. There is a lot more we could cover but what you need to know depends on your business, so why not make time to talk to us at Copy Express and we can help you narrow down the choices and save you time and money in the long run.

• [1] What Are Promotional Products? Plus, How to Use Them – American Marketing Association 🔗
• [2] Australian Promotional Products Industry Stats 🔗