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The ROI on corporate gifting products by Perkal

Promo Products Rule ROI
By Jennifer Vishnevsky, Research by Larry Basinait

February 2011

At a half a cent, advertising specialties are less expensive per impression than most other marketing media. The pass-along rate is similarly exceptional. If you’re looking for ways to prove value to prospects and existing clients, we’ve got exclusive data for you to present.

Promotional products rock – seriously. You already knew about the power of ad specialties, but now we’ve got some solid proof. And what’s better than facts when you’re prospecting?
During July and August of 2010, businesspeople around the world were interviewed regarding promotional products they had received. The results were compiled in the Global Advertising Specialties Impressions Study, a cost analysis of promotional products vs. other media. Information was collected through in-person interviews with businesspeople in U.S., Canadian, Australian and British metros.
The study contains information on specific products, gender and ethnic preferences. If you’re in Los Angeles, for example, you may already have a leg up – respondents in the City of Angels owned the highest average number of promo products, 12.7.
So go ahead, start including these statistics in your marketing and social media campaigns. It’s time to spread the knowledge to your customers and prospects about ways that ad specialties can increase sales and brand exposure.

The Buzzword Is ROI

In the U.S., the cost-per-impression of a promotional product is half a cent ($0.005). To sum it up, promo products are less expensive than TV, national magazines and radio. When you’re pitching to your clients, you should start every conversation with this phrase: half a cent. Most importantly, if you’re looking to make a quick impression, drop the ROI figure to resonate with your potential customer. “The beauty of promotional products is that it’s active branding vs. passive branding. You’re actually interacting with the brand as opposed to reading a magazine or watching TV,” says Jeff Scult, CEO of Golden Goods (asi/57695).
Every customer is looking for ways to get a return on their investment. Now, distributors can show that even small clients can have a great return. For a modest investment, a small company can obtain the type of exposure normally reserved for large companies with significant advertising budgets. “I would tell my prospects that the potential return on investment is significantly higher and the cost of impression is significantly lower. If you’re paying for a Super Bowl commercial, you’re going to hit a lot of people, but you won’t be able to track return like a promo product. You could be spending a lot of money without knowing what your return is,” says Seth Weiner, owner of Sonic Promos (asi/329865).
For Dana Zezzo, vice president of sales at Pro Towels Etc. (asi/79750), one of the ways to prove the ROI of promotional products is to use clean, simple facts. “When a customer asks us why they should buy towels, we provide the answers in the beginning of the sales process. One size fits all,” he says.
For George Ludwig, president/CEO of GLU Consulting, proving the value of promo products is all about asking the right questions. First, he would ask his prospect about their overall promo/marketing strategy and how it’s working. “If they respond that it’s not very good and they are spending a lot of money without seeing any results, I’d follow up by asking what they’re currently doing,” he says. Once the potential customer responds that they’re using TV, magazines or radio, he would provide a different marketing campaign with a much less expensive cost-per-impression. “I’d pull out the statistics to show the data from the study, which would hopefully raise eyebrows. Then, I’d share a story about someone who used TV at a much higher cost-per-impression and eventually switched to promotional products,” he says.

The Message Gets Heard

One of the major roadblocks that salespeople run into is when skeptical clients want to know if their promotional product will get used and remembered. Here’s your response: In the survey, 83% in the U.S. indicated that they could identify the advertiser on the promotional item they owned. The next time your prospect asks about buying an order of pens, you can respond that the end-user will be able to identify the advertiser. “If an item is placed correctly, they will remember your name. Pens receive more than 10 impressions a day. That’s important to explain to your client,” says Weiner.
All marketers want to be able to recognize the people that they give items to, who they are marketing to and who hears the message. This fact clearly shows that recipients get the message loud and clear. “Promo products constantly prove the value of our recommendations. They turn a skeptical person into a client,” says Cathy Lapico, CEO of Group 55 Marketing.
As a follow-up, 60% of U.S. respondents indicated that they have done business with the advertiser after receiving an item. It’s a complete  upside  –  not only is  the  message   getting heard, but you have the residual effect of follow-up business.

They Really Like You

Not only does everyone like freebies, but they also change user opinions. In the study, 41% of U.S. respondents indicated that their opinion of an advertiser was more favorable after receiving a promotional product. Since the benefit is so clear to end-users, they are more aware of the sponsor on the product and they are able to create a positive impression of the sponsor, as they find value in the item each time it is used.
Positive impressions are what makes buying decisions happen. “Statistics are proof positive for clients and it’s what they expect. Anytime we start working with marketing budgets, it takes more convincing to get clients to spend. The more we can supply that positive proof, the more likely we are to sell and upsell,” says Lapico.
If clients are determining what items to use in their marketing campaigns, they want to know that customers appreciate them. People do business with companies that they know and like. This factoid points out that promotional products can help create a positive impression among your customer base.
For Weiner, the positive impression has a lot to do with feeling good about the item. “I went to Quiznos and they had their logoed bag for sale. If you buy the bag, every time you bring it in, there’s a different deal associated with it. People feel good about walking around with that item,” he says.
Where does this figure count the most? Recognition awards, trophies and plaques. Nearly two-thirds of respondents (64%) had a more favorable view of the advertiser/award giver. When you’re working on an incentive campaign, this is a key number to use with your client. If a distributor has sold incentive programs to clients in the past, now they can infiltrate other departments for new business. This strategy would work with consumer-oriented clients, as well. If you have a client looking to garner new business, suggest a customer loyalty program with trophies and awards.

More Than First Impressions

Impressions are calculated by multiplying the number of times an item is used by the number of people that see the item. Bags have the highest number of impressions in a month – over 1,000. Wearables as a group generates the highest number of impressions in the U.S.
One person who knows about the reach of wearables is Connie Mandula, owner of CM Promotions (asi/154919). Mandula’s spin-off company, Silver Wings Merchandise, offers trendy apparel styles for clients in the country-music industry. When she heard that T-shirts are the second-most commonly owned promo product in the U.S., she wasn’t surprised.
“There’s nothing better than great T-shirts. We’re trying to design shirts that will become somebody’s favorite,” Mandula says. “Before, most of the shirts at concerts were ones I’d wear to the gym or sleep in. Now we can provide more of a fashionable, retail look.”
A high number of impressions is also a key factor in upselling. The study shows that shirts get 344 impressions in a month and are kept for at least six months, so your clients have a reason to go with better quality and more expensive items. “Distributors understand what categories seem to resonate with clients in terms of getting a sense of impressions. One of the powerful aspects of wearables is there’s no more powerful brand endorsement than a walking billboard,” says Scult.
Writing instruments are another favorite among recipients, with 437 impressions per month. When you’re pitching a small order to a new client, be sure to address how one pen can generate thousands of impressions as it’s passed around the office or used in a restaurant. When it comes to spreading a message, your clients will be able to maximize their investment and get their message seen by more than just one person. “Clients should be putting their dollars into something that will put their brand identity out there. If their message is on a bag or a hat, you’ve got people that are using these items, and they’re walking billboards,” says Kathleen Watts, founder and president of The Brandmarket Inc.
When you’re working with your best clients, provide them with information on which items provide the most impressions. If they have recurring programs or annual marketing plans, come up with new ideas and different items to use in 2011. Since you know that bags provide the most impressions, you can arm your clients with this piece of key information. “This data helps frame the discussion around what products to focus on and provides a sense of what the lifespan of a products might be,” says Scult.
Here’s another idea you can steal: Scult recalls one savvy distributor who presented his products under a cost-per-wear analysis. “The client was in the mindset of spending $5 on T-shirts. Once they heard the analysis, they decided to pay a bit more and deliver someone’s favorite go-to fashion apparel vs. something that is off-brand and will get tossed,” he says.

Pass-Along Profits

The pass-along rate really shines a light on the importance of promotional products. If there’s an item the recipient doesn’t plan to keep, nearly 62% of respondents in the U.S. indicated that they give the item to someone else. Far fewer respondents (22%) said they throw it away. Therefore, the value continues after the initial giveaway. “A promotional product is not something that you would consider disposable. People feel bad throwing something tangible or useful away. It always makes more sense that if you’re going to spend $1 on a plastic bag, you could spend the same on a nonwoven bag. The perceived value is higher, so there’s less of a chance that they’re going to throw it away,” says Weiner.
For Zezzo, part of the pass-along rate has to do with ROI. “When we’re in front of audiences at education sessions, we call and ask someone, ‘When was the last time you threw away a beach towel?’ The answer is never. So what’s the ROI on never?” he says.

Be the Consultant
A major part of the study comes down to gender, ethnic and regional preferences. The best way to utilize this information is to be a consultant to your client. Your client can make more-targeted marketing efforts by choosing the correct items. “You will never be able to fully consult with clients unless you ask the necessary questions. If somebody says, ‘I’m looking for a pen,’ the majority of distributors will ask, ‘What color? How many?’ I’m going to ask what the target audience is,” says Weiner. By asking that question, he’s able to point the client in a more fruitful direction.
For instance, 36% of those with incomes under $50,000 have promotional bags, while 68% of those with incomes between $50,000 and $99,999 have writing instruments. When you’re developing a sales pitch, you can ask about who the client’s desired audience is to receive the marketing message. If your client is targeting a demographic earning $30,000, you can use this information to suggest a bag promotion. If your client gives the target audience the products they want most, then the end-user will have the most favorable impression of the advertiser.
For Watts, one of the survey’s effects is that sales reps will be better able to educate their clients. “Clients need us to be their creative agency. They are looking for us to step up to the plate and know what the best items are for them to get their message out there,” she says.

This article was published on Saturday 05 October, 2013.

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