The Right Way to Use Promotional Gifts

Many companies have the internal debate of whether to use promotional gifts or not to increase their sales. Beware; promotional gifts are not the same as branded merchandise giveaways, promotions, or sweepstakes using prizes. In promotions, there are usually a number of prizes that can be won by some customers, but not all customers get a prize.

A promotional gift is what is given to any customer who makes a purchase. It’s a simple offer: “Buy this from me, and I’ll give you this in return”. Tit for tat. Quid por quo. This for that. You get the idea.

Accumulated data from over 200 promotional campaigns that we have developed and run for more than 40 customers (yes, the vast majority of our clients are repeat clients) has conclusively proven that promotional gifts have great value for the company that makes the investment in them. If they provide value to the customer, that is a big if.

Before running the first promotional campaign for any client, we’ve found that two very specific challenges have to be addressed. Oddly enough, after that first promotional campaign, those two initial challenges no longer exist. These “so-called” challenges are, in general, very specific:

– It is not clear what goals should and can be achieved with the help of promotional gifts.

– It is unknown how to make good use of these giveaways.

So, we’re going to dissect this in parts.

Goals that Should, and Can, be Achieved With the Help of Promotional Gifts

Double sales, when we have never managed to increase them by more than 15%. No, that’s never going to happen. Promotional gifts help, but it’s not magic. We should expect them to help us grow between 8 and 15 percentage points above what we would have grown in normal situations. That is, if in a special offer or season, where normally our sales grow 10%, we can expect that with the help of the promotional gift, we will grow between 18% and 25%. In the same way, if at a specific time of year our sales fall 10%, we should expect them to fall only 2% or even grow 5%.

It is also important, of course, to consider the value of the promotional gift. For example, last weekend at the supermarket (yes, I do the shopping in the family), I was offered to buy something instead of my regular brand in exchange for… plastic sandals plastered with the “new” brand’s name. Sandals that cost (to me) about $1.50 However, the price difference between the two products was $2.75. So, I would have ended up paying more and then becoming a walking advertisement for the “new” brand. Sorry, but no. Not only that, just to escape getting the sandals, I made sure not to put anything from that brand in my cart.

A Few Examples of Proven Success with Promotional Gifts

Of course, sales are always the most appetizing target, but there are many more ways that a promotional scheme with giveaways helps your bottom line. And sometimes that improvement is more permanent than just a sales boost. Yes, I just said “just a sales boost”. Besides sales, any of these goals are likely to be achieved with the use of promotional gifts:

   – Renew a subscription, just one more year.
   – Stop paying in cash or in a branch and switch to direct debit payment.
   – Recommend / refer 5 friends.
   – Achieve a purchasing or spending goal.
   – Achieve a certain number of transactions in a given period of time.

And many, many, other targets.

5 Pointers on How to Make Good Use of Promotional Gifts

Know the tastes of your customers

Knowing what to give them is one more step to familiarize yourself with their priorities and know first-hand what they really value. On many occasions, testing can give you positive surprises.

Use them to Increase Conversion

Promotional gifts can usually drive-up conversions during a promotional campaign and, at the same time, increase the rate of satisfaction and loyalty of a customer based on their first purchase. These are details that the customer values and should not be overlooked.

Make sure the return on investment is positive

It sounds simple, but you’d be surprised at the number of boo-boos we’ve seen here. If your product costs, say $100 and your margin is $20, you should look for a gift that costs no more than $2. The challenge here is making something that costs $2 look appetizing to someone that will spend in excess of $100 on your product or service.

Perceived value is more important than real value

You should look for options that give you much more perceived value than the cost of the gift. For example, the cost is the same $2, but the value of the gift in your customer’s mind is $100. No, these gifts are not unicorns, they’re out there. We know, we use them. Better said, our clients do, we just find them on their behalf.

And, whatever you do, don’t associate your brand with $1.00 plastic sandals

The first 4 pointers on the use of promotional gifts have been tested on many occasions, by companies from many different sectors and always with 3 common denominators:

– Increased sales.
– Increased customer satisfaction.

The last pointer, well, it just makes sense.

Isn’t it be time your company joins the list of companies that have reached their goals with the use of promotional gifts?

Come on, let’s raise the bar together. Someone has to.

Alberto Alvarez-Morphy