You may have seen them before. As a consumer, you may have been given one and probably even have it still lying around at home—a pen, notebook, tote bag, umbrella, or any such object that bears a company’s name and logo. Sometimes, you may even see them given out as a prize for a first- or third-party contest. Regardless of what they are or how they’re distributed, there is no doubt that product giveaways are a great way to get customers to know and talk about your brand, and have a more noticeable return compared to advertisements spread through less tangible means, like TV commercials, radio broadcasts, social media campaigns, or print ads.

But let’s say you’re planning to start a marketing campaign using product giveaways. As a business owner, you will have to invest a sizable amount of cash to produce and distribute your giveaways. Will your investment be worth it? How will you know how effective your marketing campaign will be? As it turns out, finding out the ROI of your product giveaways is not so hard, and here’s how you can do just that.

What is ROI?

ROI can be used in two different ways, depending on the desired outcome of your advertising campaign. The first meaning is Return on Investment, which refers to the monetary efficiency of a certain investment. In other words, it measures how much profit an advertising campaign managed to turn over. The other meaning is called Return on Impressions, which measures how large of an impression you made and how many customers your campaign managed to reach. Therefore, there are two ways for you to calculate the ROI of your product giveaways.

Return on Investment

To figure out the ROI on your product giveaway, you will need to have a record of all of the units of products or company merchandise you’ve given away, as well as how much they cost to produce. Next, you will need to figure out how far your promotion reached. Since product giveaways are physical objects, you will need to make a manual record of how many of these products you’ve given away.

After that, you will need to figure out how much revenue you generated from your marketing campaign. This part might be a little tricky since you will need to find out how many products you sold as a result of your campaign and separate that from the sales you gathered normally. To help with the tracking, you can try to collect data from your customers by having them fill out a survey after handing out a product.

Once you have all of the requisite information, you can now break out the calculators and start finding the ROI percentage. First subtract the cost of your campaign (that includes the cost of producing the giveaway products and the cost of distribution) from the profits you earned from the campaign, then divide that by the cost of the campaign. The result will be a small value, like 0.35 or 0.50; to get the ROI percentage, just multiply this number by 100. For example, if you made $500 in profits from a $300 campaign, the result will be 0.67, or a 67% return of investment.

Return on Impressions

Unfortunately, return on impressions cannot be as easily quantified as return on investment. However, figuring it out will still be useful for providing you with insights on how many customers your product giveaways are reaching. To do this, you will have to collect data from your customers, which can be done in various ways. For starters, you can hand out anonymous surveys the same way as with calculating return on investment. You can also scout out social media networks for mentions or talks of your products or services.

Effectiveness of Promotional Product Giveaways

Without a doubt, product giveaways are a particularly effective way to promote your brand. But how effective is it compared to other advertising methods, and how would you know if going the giveaway route is the best move for your business? Let’s take a look at some of its benefits.

First off, promotional product giveaways stick. Using your products or functional, branded merchandise tend to leave a lasting impact on your customers, as more often than not they will find some use for them in their everyday lives. For example, they may end up using pens and notepads you gave away for instant note-taking if they have nothing else on hand. Other merchandise like tumblers, clothing, or other items will also likely make their way into your customers’ list of things they use every day.

Second, promotional products spread. Anyone who uses and is seen using your giveaway products in the open will easily recognize your brand. In essence, the customers you hand giveaways to become walking advertisements for your company, as with people using company-branded umbrellas on rainy days, your coffee mugs at work, or a hand fan on a hot afternoon. And even if it doesn’t net you more sales, your giveaways still serve the valuable purpose of getting new, potential customers to recognize your company.

And finally, promotional product giveaways sell. Although there is a chance that you won’t get increased sales from your giveaways, it doesn’t mean that they never will. Like all other marketing campaigns, promotional product giveaways are designed to entice people to buy your products or use your services. As such, your efforts will not go in vain, and at the very least, you will manage to convince a few people to become your customers.

So, is the product giveaway a good option for your company’s next marketing campaign? It mostly depends on what you’re selling, how you’re distributing the giveaways, and how much you’re willing to invest into the campaign. If your business offers a service like a bank or insurance company, company-branded merchandise is a great option to have as giveaways. You will not need to produce that many units, and you can simply give them away to your customers after a successful deal. Otherwise, if your company sells a particular product, your product itself can be a pretty good giveaway option on its own, especially when distributed through a contest or a similar promotion. In the end, the effectiveness of any marketing campaign really depends on how well you know your target demographic and how well you know how to reach them.

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Gary Maserow
Gary Maserow is a Managing Partner at Monograma, suppliers of promotional products and corporate branded items throughout Australia. They help businesses create a lasting impression on their clients through strategic promotional product marketing campaigns.

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