Promotional products have been a popular marketing tool for businesses for decades. They offer a unique way to promote a brand or product to a wide audience while also providing a tangible item that recipients can use and keep. However, like any marketing effort, it’s important to measure the return on investment (ROI) of promotional products to ensure that the cost of producing and distributing them is worth it. In this article, we’ll outline step-by-step procedures on how to measure the ROI of promotional products and provide statistics on their ROI compared to other traditional advertising choices.
Step 1: Set Your Goals and Objectives
The first step in measuring the ROI of promotional products is to define your goals and objectives. What do you hope to achieve through your promotional product campaign? Is it increased brand awareness, lead generation, or sales? Once you have a clear understanding of your objectives, you can determine the metrics you’ll use to measure ROI.
GOAL: I would like 20 New Customers that spend $5,000 each with my company = $100,000 in new business in the next month.
Step 2: Determine the Cost of the Promotional Products
Next, you’ll need to calculate the total cost of your promotional product campaign. This includes the cost of the products themselves, any customization or personalization, and the cost of distribution.
COST: Sending out a promotional marketing kit based on a marketing campaign will cost $50 per kit with shipping and products. I will need to buy a minimum of 250 kits to be at this price point = $12,500. Your goal is $100,000, but your break even point is now $12,500.
Step 3: Track Distribution and Usage
It’s important to track the distribution of your promotional products to ensure they are reaching your intended audience. You should also track how recipients are using the products, whether it’s wearing a branded t-shirt or using a branded pen. This information will help you understand the impact your promotional products are having on your target audience.
TRACK: Put a QR Code, promotion specific email address or phone number, or a specific coupon code that can only be found if they receive the marketing kit. This way, you know that any new business from that specific code, phone number, etc. was a direct result of your promotional marketing campaign.
Step 4: Measure the Impact
To measure the impact of your promotional products, you’ll need to track the metrics you identified in step one. For example, if your goal was increased brand awareness, you might track social media mentions or website traffic. If your goal was lead generation, you might track the number of leads generated from your promotional product campaign.
MEASURE: Calculate the total in sales from the above tracking. New Sales = $97,500.
Step 5: Calculate ROI
Finally, you can calculate the ROI of your promotional product campaign. To do this, subtract the total cost of the campaign from the total revenue generated as a result of the campaign. Divide the result by the total cost of the campaign and multiply by 100 to get a percentage.
ROI: $97,500 – $12,500 = $85,00 = 680% Return On Investment.
Promotional Products vs. Other Traditional Advertising Choices
So, how does the ROI of promotional products compare to other traditional advertising choices like print advertising, direct mail, and television or radio campaigns? Let’s take a look at some statistics:
- According to a survey conducted by the Advertising Specialty Institute, promotional products have a lower cost per impression than traditional advertising. For example, a branded pen has a cost per impression of 1/10th of a cent, while a prime-time television ad has a cost per impression of 2.5 cents.
- A study conducted by the Promotional Products Association International found that 83% of consumers are more likely to do business with a brand after receiving a promotional product.
- Direct mail campaigns have an average response rate of 4.9%, while promotional products have an average response rate of 6.6%, according to the Direct Marketing Association.
- Finally, a study conducted by the Advertising Specialty Institute found that promotional products are the most effective form of advertising in terms of recall. 83% of consumers could recall the advertiser on a promotional product they received in the last year, compared to 45% for print ads and 33% for online ads.
Promotional products can be a highly effective marketing tool for businesses, with a lower cost per impression and higher recall rates than traditional advertising choices. By following the step-by-step procedures outlined above, businesses can measure the ROI of their promotional product campaigns and ensure that they are getting a positive return on their investment.