How to Measure the ROI of Branded Bags
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1 How to Measure the ROI of Branded Bags Brand Impact - How to Measure the ROI of Branded Bags YOUR LOGO
2 Contents Introduction Why Branded Bags? Utility Longevity/Lifespan Practicality Reusability Visibility How to Measure ROI Goodwill Recall Website Conversions Customer Acquisition Increased Market Share Summary
3 Introduction Branded promotional products remain one of the best ways to improve your branding efforts. We at Brand Impact pride ourselves for resourcefulness, expertise and valuable industry experience. The research outlined within this e-book provides an insightful analysis of a question essential to any Brand Manager- How to evaluate the influence of their promotional marketing strategy on ROI. Our clients are primarily Brand Managers for reputable companies, in various industries. We understand the importance of being able to access up to date market research, in order to achieve a successful brand strategy. The findings of this e-book are based on the Global Advertising Specialties Impressions Study Report and up to date information carried out by our team. It provides a foundation to allow Brand Managers to make informed decisions in the best interest of the business. Whilst we try to give as accurate an overview of this area as we possibly can, it is important to remember that branded merchandise is a vast area and many decisions are industry dependent and therefore will differ depending on individual needs and requirements. 3
4 Why Branded Bags? In essence, any promotional item you can think of; caps, writing instruments, t-shirts, etc. promises some return on the investment. However, bags stand out for 5 primary reasons; Utility 1. Utility 2. Longevity/Lifespan 3. Practicality 4. Reusability 5. Visibility Consumers want products that are, first and foremost, useful to them and bags score very highly in this area. When asked which promotional products they find most useful, 87% of respondents specified bags as being useful to them. Of course, people also love attractive products. But given the choice, they d pick something that will have a significant impact on their lives - and that s exactly what bags do. This also explains why writing instruments and USB device are also rated very highly. However, you also realize that only the right kind of bag would truly benefit whoever receives it. In other words, you must match the type of bag you give to the personality of the recipient. Otherwise, you may not impact that person s life in the way you intended, which may in turn cost you the opportunity to cement your position in their minds. For example, laptop bags should only be given to people who own laptops, gym bags should be given to sportspersons, purses should be given to ladies, and school bags should be given to parent with school-going children. The good news is that you have so many types of bags to choose from depending on the target audience. 4
5 Longevity/Lifespan First, it s important to note that people who receive branded promotional bags keep such products for 7 months on average. That s better than t-shirts (6 months) which is also the most popular promotional item. Some people will even keep the bag for more than a year. The other thing is that even after they re done with the bag, very few people throw them away. In fact, 63% of Americans say they d rather pass along the bag to a friend or loved one rather than store (17%) or throw it away (20%). These numbers are even higher in other countries with 67% of Londoners saying they prefer to pass along bags that they re finished with. Looking at demographics, older people are more likely to pass along a used bag than younger people. Recipients aged 55+ give away such products 70% of the time while those aged give them away 68% of the time. Recipients aged 35 or under only pass along their bags 57% of the time. In short, anytime you give away a branded promotional bag to two people, at the very least, one of them will pass it along. This should be a major motivation for brands to further invest in branded promotional bags. Imagine a situation where after keeping the bag for a whole year, the recipient then goes ahead to pass it on to a daughter who may then keep it for a further one year! That s a solid two years of free brand advertisement. 5 5
6 Practicality Bags are also held in very high regard by people who receive them because they are practical. Something is said to be practical if it can be used in real life. Bags can be used to carry items from the grocery store, some are used when traveling, others are used to carry folders and files to the office, and so forth. Hats, t-shirts, pens, and calendars can also be used in real life. However, bags are the best pick because of the immediate and lasting impact they can have on the recipient s life. People who receive t-shirts, for example, can only wear it maybe once a week. But the same can t be said about a person who needs to carry his or her files to work. If the bag is really cool (which is what you should aim for), this person is likely to carry the files in this bag almost every day whenever he or she goes to work. Only until it is worn out will they consider finding a replacement. Now, that s a practical product. Among the many types of bags, cotton shoppers are considered the most practical. A majority of people enjoy carrying them when going shopping and these bags can also be used to carry folders, books, and files when going to the office. As a rule of thumb, if you re giving away a bag to be used for shopping, then a large, open one would work perfectly. However, if the recipient will be using it for office work, choose a bag with pockets and compartments that allows for separation and easy location of items. For travel bags, padded pockets for tablets and other electronic devices, and outside pockets for carrying a water bottle would make it more practical. 6
7 Reusability People are becoming more environment conscious. They are eager to play their role in keeping the environment clean to minimize the many effects of pollution. One way of doing this is to recycle or reuse the items they already have. And today, one of the most reused items in the UK is bags. In fact, legislation now means that stores providing free plastic bags is now a thing of the past and each plastic bag costs 5p to purchase. However, even these plastic bags can be reused over and over again. Consumers can use them as plastic bags on road trips. When packing, some people also use them to keep shoes from soiling clothes. For cotton shoppers, you ll find a lot of people carrying them back to the store to haul another load of groceries home. For the other types of bags such as backpacks and travel bags, the less said, the better. These ones are often reused until they wear out! This reusability is another factor that makes bags a very attractive promotional product. People who receive a sturdy tote bag, for example, can enjoy the moment knowing that they will be able to use it on several shopping trips. 7
8 Visibility According to the recent Impressions study, a majority of people who receive promotional items are quite thrilled with the items. Asked to state in one word how they felt about an item they received, a majority of respondents said they felt; happy, good, awesome, grateful or thankful. It shows that people truly appreciate these items. Consequently, after receiving a promotional product, people don t just keep them at home. Recipients of caps, for example, are happy to wear them as they go about their day-to-day duties. They ll wear them when going shopping, when taking a walk around town, and even when traveling. The same applies to those who receive t-shirts and polo shorts. In fact, it has been found that 90% of people who receive branded promotional products use these products at least once a week. Recipient of promotional bags are even prouder of the items. Step out into the streets today and you ll see thousands of them with branded bags on their backs or hanging from their shoulders. This helps to boost visibility. As the recipient returns home with the bag, everyone on the streets who happens to take a glance will learn about your brand. When they arrive home, the neighbours will take notice. Once inside, the family will also be exposed to your brand. Over the several coming weeks or months, as they carry the bag to the office, grocery stores, travels, and so on, a lot more people will learn about your brand. And it doesn t stop there. In this age of social media, people are always taking selfies and group photos to post them on social networks. If the branded bag appears in a photo and the logo is clearly visible, imagine how many people will see your brand! Before you know it, millions of people may have learned about your business. 8
9 How to Measure ROI? When it comes to measuring the Return on Investment (ROI) of branded bags, a lot of wisdom is needed. This is because gauging the ROI of promotional products can be very difficult. There are many reasons for this, the main one being that the effects of promotional products can take a long time to be felt. It is nearly impossible to pinpoint instances where a branded bag directly or indirectly leads to a conversion. Although many people have been exposed to the brand over an extended period, the challenge is in determining whether or not it is indeed this exposure that finally caused them to purchase from that brand? Maybe there was also an ad on TV on the same brand which might have triggered the action. Here are the five aspects of ROI you ll need to focus on. 1. Goodwill 2. Recall 3. Website Conversions 4. Customer Acquisition 5. Increased Market Share This, however, doesn t mean that you can t measure the ROI of your promotional products. You just need to approach it differently. 9
10 Goodwill There are two definitions of goodwill. First, it is defined as the difference between the fair market value of a company s asset and the market price of that product. In other words, it is the amount in excess of a product s valuation that a consumer is willing to pay to acquire that item. If other brands in the market are selling a similar product for $5 and you charge $6 and people are still willing to buy it, the $1 difference is what is called goodwill. For those seeking hard figures as proof of ROI for a promotional product campaign, this is one of the best ways to get these figures. Goodwill also refers to the feeling of friendliness, helpfulness, and cooperativeness towards a person or entity. This second dimension is more difficult to measure. But it is also far more important for brands. When consumers form positive feelings about your brand, that s probably the best thing you can get from them. It s even better than a customer who jumps right in to make a purchase. Look at brands such as Apple and Starbucks. Consumers are in love with them. Whenever someone thinks about getting a new phone, they think about Apple. If it s a new PC, they ll think about Mac. And, if it s a cup of coffee, the first name that comes to mind is Starbucks. This is goodwill at its best
11 Recall Brand recall is the extent to which a brand name can be correctly generated and retrieved in the consumer s memory. Together with brand recognition, they form brand awareness the degree to which consumers are familiar with the distinguishing qualities of a particular brand. To measure brand recall, you need to measure three metrics; reach, engagement, and volume of mentions. There are three ways of measuring these metrics, the preferred method among most marketers being surveys. Here, you pose questions through telephone, , or your website asking prospects/customers how they learned about your brand and which of your products they can correctly recall. Other than surveys, you can also measure brand recall through social listening, observing your site traffic, and looking at your search volume data. Brand Awareness at Exhibitions For an immediate example of branded bags increasing brand awareness consider the impact of thousands of branded bags being carried by exhibitor attendees. Cotton shoppers remain one of the most popular giveaways at corporate exhibitions and for good reason. The brand awareness and recall driven by branded bags here extends beyond the exhibition halls 11
12 Website Conversions Another way of determining the ROI of your branded bags is to track your website conversions. A conversion happens when a site visitor eventually makes a purchase. With the bags in their sight for the better part of the day, recipients of these items are likely to search for your website a lot on search engines. If you have an online store, they will be eager to browse through the products you sell as a way of further familiarizing themselves with your brand. Gradually, you ll start seeing an increase in conversions. It might not be a sharp rise but you ll record more sales. Alongside your other campaigns, this will be your branded bags doing their work. The good news is that measuring conversions is quite easy. Simply set up Google Analytics free of charge and use it to track the conversion figures. 12
13 Customer Acquisition Customer acquisition is the process of persuading a customer to purchase a company s goods or services. The main element of customer acquisition usually measured is cost how much do you spend for every customer you acquire? The lower this cost is, the better off you are. Branded promotional bags can significantly lower your customer acquisition cost (CAC). By increasing the visibility of your brand and boosting awareness among customers and prospects, you ll have a consumer base that is already highly conversant with your offers. If these people are happy with what they know, they will already be in favor of buying from you. So, you don t have to spend a lot of money to further convince them to pick your brand. In a nutshell, if your CAC is steadily decreasing, then your branded bags are doing their job. 13
14 Increased Market Share Finally, you can also measure the ROI of banded bags by tracking your market share the portion of market you control. The easiest way to determine your market share is to ask yourself: What percentage of the total purchases of the product do I control? In other words, if you sell TVs and in that year one million TVs were sold in your market, if 100,000 of the TVs were bought from your company, then your market share is 10 percent. However, there are a number of factors you ll need to keep in mind. For instance, you can only realistically calculate your market share based on the number of similar purchases in your market. If you only sell Sony TVs, then you need to leave out all other TV brands. 14
15 Summary As both factors in question; ROI and branded merchandise are dependent on the client s needs and circumstances, measuring their relationship is complicated. The research in this report is an attempt to breakdown the potential value of branded merchandise (bags in this case) can have for the business and 5 different ways of how companies would primarily calculate their ROI. Our team has a vast industry experience and can provide valuable consultation to brand managers about what promotional product can best suit their requirements for them to reap maximum possible ROI. We value our partnership with clients and work hard to our full potential to help them achieve their marketing goals. 15
16 About Brand Impact Ross MacCallum MD Brand Impact Sourcing from a trusted database of over 95,000 ethically sourced promotional products, we offer competitive pricing on quality products. We deliver on brand, on budget, on time! Our team also manage corporate schemes including stock management, storage, fulfilment and distribution of promotional merchandise supported by our bespoke client portal, ideal for those forward thinking clients with more complex promotional merchandising requirements. Unit 9, West Gorgie Park, Hutchison Road, Edinburgh EH14 1UT theteam@brandimpact365.com 16
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