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PLEASE NOTE: The article below was submitted as part of a recent online competition we ran, inviting our clients and others to share their thoughts and experiences about using promotional products. For that reason the articles are written at a very general level only, and are far from ‘expert’ in any sense! It goes without saying though that if you now could like more detailed help or advice, please do not hesitate to contact us on 1800 519 071, or just send us an email. We would love to be of service to you.. that’s why we are here!
When can promotional products be considered cost effective?
What are some general indicators that you might need to lower overall marketing costs, especially around promotional items?
Marketing costs generally are an area that should be managed carefully. This is based on the needs and current status of the economy and the company. You might need to lower overall marketing costs for three reasons:
- when facing a recession or significant economic decline,
- when your company does not choose to pursue growth any longer and feels comfortable with its current customer base’s loyalty and expected continued business, or
- when your company needs to scale back in the budget of all its departments.
How can promotional products be more cost effective than other forms of marketing?
Promotional products are usually more cost effective than other forms of marketing. They have a more direct unit to value provided ratio. If distributed carefully, you can ensure only potentially interested people will receive your product. What does this mean for your business? Each promotional product you produce and distribute possesses significant marketing value, and as such you will obtain returns on your investment in the product. While you can never guarantee sales, you will have spread your brand exposure appropriately. Advertising through other marketing mediums, such as TV or radio spots, usually only appeals to a small subset of people. Alone, it can be considered more cost inefficient than promotional products.
Are some promotional products more cost effective than others?
Some promotional products are certainly more cost effective than others. While there is no overall rule for this, there are ways to try and quantify the cost effectiveness of your products with regards to returns on your investment in promotional products.
How can promotional product cost effectiveness be measured in terms of direct business benefit?
Promotional product cost effectiveness can be measured with direct business benefit by trying to quantify the successful sales made to new/existing customers that were driven or aided by the provision of promotional products. This is not easy nor is it going to be completely foolproof. However, it is a valid way to track usefulness and cost effectiveness of certain promotional products. Calculate the revenue brought in from “sales aided or driven by promotional products,” and compare it with the cost of the distributed promotional products only. If you find that the difference is a satisfactory profit margin, then your promo products are cost effective.
How best can I transition from utilising low cost effective promo products to promo products with high cost effectiveness?
If you perform the above calculations and determine that your promo products are not cost effective enough, evaluate the current state of your business. Are you still looking for growth? Do you think promotional products will help keep customers loyal? Are promotional products a key ingredient in successful sales for you? If you believe that the answers to these questions are yes, re-consider the choice of promotional product that is being distributed. Try and find products with similar innate characteristics, if not explicit characteristics.
For example, while customised, fancy pens and regular cheap pens both essentially serve the same function, you will be doing a disservice to your promotional product effectiveness because the connotation of that product changes significantly. If you determine that customised pens are too expensive for continued distribution, consider taking that key INNATE characteristics (i.e. customisation implies a relationship), and apply it to a cheaper product such as a T-shirt. By doing this, you are retaining the values of the product and maximising its cost effectiveness.