Custom branded giveaways are a proven marketing tool that increases sales and revenue for brands. Companies also gain more impressions as more potential customers interact with their brand name or logo in that way. Thus, promotional products practically do the work for you! They increase your company image, are a marketing advantage and create long-lasting repeat exposure.
Studies have also shown that when customers see promotions, they buy more than they demand because the promotion encourages them to believe that they could gain more value than before. Furthermore, a study by Lau et al. (2006) has shown that the buying behaviour of brand switchers is influenced the most by sales promotion.
Below we will discuss the following behavioural principles that make promotional merchandise so effective and loved by the audience
Followed by the conclusion: Freudian Marketing - Why Promotional Freebies and Not Discounts?
The Principle of Reciprocity
When we get something, we should give something back.
Psychologists have already been assisting marketers for a long time in order to understand customers and their behaviour better. The Principle of Reciprocity is an important finding that explains why promotional products work: People give, and others receive. Then these recipients give, and others receive.
This process is essentially trading and has already benefited society in history when scarcity of goods and services existed. Thus, evolution has embedded in our brains that when we get something, we should give something back. This principle is one reason why promotional products are so successful and what makes them an effective technique of advertising: To sum up, they simply attract, engage, and compel consumers to buy!
Reciprocity can work in two different ways here:
On the customer himself that receives the promotional product from your company and,
On the families, friends and network with whom customers share the free product or see him using it
A consumer that receives the promotional freebie, and associates a great experience with it and your brand, could convert into a paying and returning customer that will also keep buying your products in the future.
On the other hand, quality and practicability are to be considered when choosing the right promotional products for your business as the receiver will use the branded gift more, the more applicable the free item is for them. Therefore, other potential customers will also see it more frequently the more they see it being used. In that way, your brand gets long-reaching and lasting exposure. In turn, these people might not only get converted into loyal customers if the promotional gift is of good quality or uses attractive branding, but this also creates trust in your company and product range with them at the same time.
Thus, the principle of reciprocity incorporated into a business' marketing and advertising strategy can increase customer loyalty and boost revenue. That’s based on the fact that we automatically feel indebted to anyone who gives us a gift – even if we didn’t ask for it. This principle applies to any freebies that a business might present to loyal customers and prospective customers – including B2B companies – and when used strategically, promotional product giveaways can also increase brand awareness, generate more qualified leads, and even close more sales.
Sense of Accomplishment & Loyalty
Promotional Products foster a sense of loyalty, which can improve retention.
When you give away free products at events, it provides the recipient with a feeling of accomplishment. They feel like something they have done made them worthy of earning this free product. It makes them feel special, valued and acknowledged. No matter, if you hand these out to participants or visitors, branded corporate gifts, are a good way to show your appreciation and thank them for coming.
This principle also relates to employees. For example, if employees are invited to attend their company’s events and parties, it is most likely that they are not too motivated to stay there. A custom branded item may help the employees feel their time at these events was worthwhile. They can also become a great souvenir here as every time they use that free branded gift afterwards, the employees will recall the memories they formed at the event. Generally speaking, promotional products can be seen as an incentive that helps encourage staff loyalty to the company. They will make your employees feel that their time and effort spent as well as their experience and skills are worthy. Quality and practicability play a role here again as a new mouse mat for example is unlikely to be appreciated.
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Encouraging Empathy & Driving Sales
Empathy is the ability to comprehend other people's emotions. But when it comes to promotional products, empathy can also stimulate the customer by imagining themselves while using a certain product. In that way, marketers try to use customers’ empathy to their benefit in order to achieve their marketing goals. This method is mainly used when marketing employees are giving demonstrations on using the company’s products together with handing out a promotional gift which then functions as a reminder of the demonstration later on. Customers not only get to see people using the company’s product, but a promotional product used as an additional marketing tool will bring everything they saw back into their minds more easily. Their phantasy can then start wandering and imagining themselves using that advertised product which will lead to increased sales for the company eventually.
Freudian Marketing - Why Promotional Freebies and Not Discounts?
Customers consider a free promo item a better deal than a lower price.
Sigmund Freud’s theory states that the decision to purchase a certain product is determined by several unconscious factors: Touch, taste and smell are therefore considered strong promoters and stimulators that often lead to emotional action.
However, this effect cannot be achieved with 2D visuals only. That shows the effectiveness of merchandise as a physical marketing tool.
Sensual experiences achieved through touch, taste and smell are considered controlling senses for generating memories. As a result, the memories generated will produce an emotional response creating a connection to the product even though a buying choice has not been made yet.
In that regard, 73% more hand lotion was sold during a study when the product was supplied together with a free bonus item. This figure was then compared to the sales statistics when the hand lotion was offered at an equal discount. Even though discounts usually benefit customers by making them believe they get more value for a lower price, this also causes a kind of distrust in them. The question about the actual value of the item arises what makes clients sceptical in the end.
That's why research shows that consumers are still more drawn to promotional freebies as a bonus to their purchase than a discounted price.
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