Promotional products are one of those impossible to gauge yet impossible to abandon marketing techniques. They run the gamut of cheesy, nearly broken immediately out-of-the-box items like cheap flashlights and plastic bag clips to highly coveted jersey fabric t-shirts and on-the-go power juice boxes.
Marketing professionals and sales executives have a love-hate relationship with them—in theory they provide a lasting, meaningful connection with the company brand but in practice that doesn’t always work out.
While it is virtually undeniable that promotional products aren’t going away any time soon, figuring out whether your promotional products have positive ROI (return on investment) can be a difficult task. From allocating budget to connecting brand identity, your choice of promotional products will vary widely based on your needs and goals. But regardless of your particular circumstances, learning how to think about promotional product ROI will ultimately help guide you to make the right decisions.
Promotional Product ROI by Conversion
Your promotional product decisions are going to vary largely based on your intended audience—but the reasons may surprise you. Yes, of course you need to consider the number of items you need within your given budget. But then you need to consider the value that your prospective audience might bring your company if your promotional product is well received. If you’ve spent the past years thinking there was no formula to this—it might be time to reevaluate your premise.
As an example, imagine your audience is at the higher end of your client spectrum—perhaps a targeted industry event where you know the average attendee falls on the high end of your target market. While the audience is varied and includes competition or unrelated parties, you know that approximately 50% of the audience is likely customers. But your formula doesn’t stop there.
Assuming that every person will take a promotional item, but only half will be potential customers, the cost of the promotional item will double when related to potential ROI. Factoring in your average immediate conversion rate—for example’s sake, let’s say 5%–and applying it to cost of promotional products for the entire audience, you will have a basic baseline for understanding the cost per converted customer.
In order to appropriately budget for this, you would back into the cost per item by beginning with the approximate amount you would spent to acquire a new customer. This will vary based on your profit margins. Assuming you have a profit margin of $200, an event conversion rate of 5%, and an event with 1,000 attendees, half of which are potential customers—then you know you have average expectations of converting 25 attendees, creating a $5000 profit.
Of course if you were paying attention, you just realized that you’re not buying promotional items for only the 25 attendees—or even the 500 attendees that are potential customers. You’re buying to make sure you have enough items for every attendee.
Even if you spent your entire profit—which you wouldn’t in any other marketing strategy—that would limit the cost per promotional item to $5. Plus, you have to take into account the additional costs of taking part in the event—from the booth costs to travel and entertainment. Once you add all of them up you might actually start questioning why you’re doing this at all.
The Big Picture for Promotional Products
Before you cancel your upcoming events, remember that you:
- need to plug in your own numbers (you may very well have much larger profit margins, conversion rates or potential customers) and
- your brand presence extends further than the immediate conversions. And, shockingly, herein lies the case for bigger sticker promotional items.
The reality of promotional products is they probably had little or no influence on your immediate conversions. Point in fact—no one bought your pricey (but worth it!) SaaS solution within a few weeks of the event because you gave away a free branded car charger converter for an iPhone.
No, the point of the promotional products was to do the work of advertising. During the event, it was to encourage additional foot traffic (see our previous post for other ways to make your booth more effective). After the event it was to create a memory and positive association with your brand. Simply put—your promotional product needs to stand the test of time—and travel.
You want attendees to willingly take your product home with them, use it, keep it and show it to their friends—intentionally or as a by-product of use. You want to create positive brand associations—your logo on quality, worthwhile products—and enable extended networks to create the same associations through exposure. And you need it to be accommodated by a plane, train or automobile!
How to Measure Extended Promotional Product Exposure
We wish we had a better answer—but you probably have to let it go a little here. Unless you install a tracking device on your high-end pens, you probably will never really know how far the reach extended into your eventual new customer base. However, there are a few things you can do to ensure more positive exposure.
First and foremost, connect the promotional product you choose with your brand and services. Just because a promotional product is exciting and well received doesn’t mean it drives home a connected brand message. You need to find promotional products that resonate with your audience and carry your message through brand association.
For example, a moving company would benefit from giving away branded markers, packing tape and measuring tapes. A repair company may benefit from giving away branded tools. A makeup company many benefit from giving away branded makeup bags or cosmetic cases.
This may sound obvious, but all too often companies find themselves distracted by a shiny, sought after promotional product that doesn’t resonate with their brand messaging. Or conversely, companies find themselves choosing from budget items that have no relation to the value proposition of the company but are “affordable” in mass quantities.
However, decoupling the relationship between brand relevance, customer interest and cost is a problem. None should stand alone when determining which promotional item to use—in fact, the perfect promotional item with the largest ROI will inevitably be one that takes into account brand messaging, costs constraints and customer interest equally to make the appropriate product decision. And while it may never be simple to define the promotional product ROI, a general uptick in conversions and sales should help to support your decision.
Do you have any general rules or guidelines for selecting promotional items? Tell us in the comments below!