What is the ROI on Branded Merch? 5 Interesting Facts

In today's modern world of marketing, brands are easy-come, easy-go. Digital-only brands spring up and collapse in a matter of weeks, leaving little more than a pile of sponsored content, broken links, and a parked domain.

For a brand to have a more enduring appearance, they often need to step into the physical space. Even brands that produce solely digital offerings can make use of physical marketing with branded merchandise. And, of course, more traditional brands are always looking for ways to make use of branded merchandise for marketing, outreach, awareness, and engagement.

One of the biggest difficulties with branded merchandise is how difficult it is to pin down the results of your merchandise marketing. When you pay for a display ad and get some trackable number of visitors, it's easy to attribute sales to those visitors and calculate a return on investment. It's much more difficult when you're paying for stationary, t-shirts, or other branded merch.

Fortunately, there's a lot of data out there to validate the choice to use branded merchandise, and it's not as hard as it seems to calculate a valid ROI.

The Benefits of Branded Merch

First, let's get started with talking about the benefits of branded merch in terms of returns on investment.

Branded Merch Promotes Brand Recall and Visibility

One of the biggest benefits of branded merchandise is the fact that it turns anyone using it into a walking, talking advertisement for your brand. Someone using a glass that has your logo on it is repping your brand. Someone wearing a t-shirt with your logo on it is repping your brand. Someone using a canvas tote with your logo on it is repping your brand. See the pattern?

If you're thinking to yourself "yeah, but I don't really consider it advertising" or "sure, but I don't remember all the brands I see on products around me", those are true. You might not make a mental note of all of the logos on shirts around you, or the iconography on the totes, or the messaging emblazoned on the stationary.

Fun fact #1: It doesn't really matter if you're consciously paying attention to the branding or not.

A brand that has a physical presence saturating the area is going to have more brand recall and recognition, if not familiarity, than a brand that stays solely on digital advertising or even traditional advertising methods like billboards, mailers, TV, and radio.

In fact, studies have shown that brands with branded merchandise have as much as 80% more brand recall compared to other brands. People might not know why they recognize the brand, but they know they've seen it before, and when you're given a choice between a brand you've never heard of and one you have, you're a lot more likely to go with the one you have.

Branded Merch is Cost-Effective Marketing

Another great benefit to using branded merchandise is that it is, surprisingly, very cost-effective for what you get.

Generally, you can compare branded merch to more traditional awareness campaign marketing. That is, the result you're paying for isn't specific conversions or actions like newsletter sign-ups but rather just getting eyes on your branding and your name on their minds.

Remember, awareness marketing isn't just about telling people who don't know you about who you are. It's about reminding people you exist at a time when they're thinking about the problem you solve. There's probably no one in the world who doesn't know about Coca-Cola, but they still spend millions on advertising. Why? Because the next time you're thirsty and you see a Coke ad, maybe that's the time you choose to buy a Coke instead of a Pepsi.

Awareness campaigns can be surprisingly expensive. Consider the average cost per impression on various platforms:

• Social media cost per impression can range from $2 to $5, depending on the site.
• Search engine advertising CPI can be as much as $3 to $6.
• Display networks can be anywhere from $1.50 to $5, depending on the network.

Fun fact #2: branded merchandise cost per impression can be extremely low.

For example, something as simple as a branded pen can have a functional cost per impression of less than a tenth of a cent. Orders of magnitude lower than online advertising! Other channels can get an immense number of views for a fixed price, but those prices can be high, and it's all balanced out. Buying a box of 1,000 branded pens and handing them out like candy, meanwhile, can saturate a market faster than you might imagine.

Branded Merch Increases Customer Loyalty

Another surprising benefit of branded merchandise is that it can increase, foster, and boost customer loyalty and engagement. By producing items that are unique to your brand – whether it's something truly unique, like the statues of figures from a video game, or something generic, like a shirt with a unique print only available from your brand – you can hand these out as gifts and added benefits.

Branded merchandise can be used as an added bonus to foster loyalty or as a reward for loyalty. While these sound similar, they're a little different in functionality. A company like LEGO produces "GWPs" or Gifts With Purchase, which are added micro-sets that customers can get when purchasing directly from LEGO; these foster loyalty from those who aren't already loyal.

Conversely, you have examples like Arby's, who recently sent influencer ProZD a branded outfit because of a popular video he made where he tried and reviewed every menu item they offer, thus giving them immense visibility. For the low cost of a single custom outfit, they foster loyalty with an influencer.

Fun fact #3: up to 85% of customers who receive branded merchandise go on to do business with the brand.

Whether its regular people getting an added bonus, influencers getting special merchandise, or loyalty programs rewarding the most engaged users, branded merchandise can go a long way towards benefitting your brand for a low investment.

Branded Merch Increases Revenue and Sales

One of the biggest benefits of branded merchandise is the simple fact that it can lead to an increase in sales. After all, even if every single person in the world knows about your brand, your campaign doesn't matter if none of them put money on it, right?

Fun fact #4: companies who ran branded merchandise campaigns saw as much as a 15% boost in sales after the implementation of the campaign.

When you're finally getting down to the point where you're tracking the one metric that really matters – the money, the sales, the revenue – you can attribute a tangible boost to the use of branded merchandise.

It is, however, difficult to track. Since branded merchandise is very difficult to accurately track and attribute an effect to, it can be hard to tell what is simple statistical variation, what is seasonal shifts and changes, what comes from other sources, and what can be attributed to branded merch.

First, you have to have your baseline sales numbers. Then, you have to know the assumed behavior of your customers in the future and segment an audience for your branded merchandise campaign. Implementing the campaign, you have to do anything you can to track who receives branded merchandise and how. Sometimes, for example, the context in which they receive the merchandise can be important. Something like a trade show assumes a higher baseline level of engagement than a door-to-door gift or mailer.

From there, you can track sales, including not just the number of sales or the raw revenue but also the number of items, the type of items, and other metrics, all of which can be influenced by the engagement of the customer. Those who received branded merch may purchase slightly more, or may opt for more expensive packages, or may simply shop more frequently. These are all beneficial effects of a branded merchandise campaign.

Branded Merchandise Improves Employee Retention

Until now, we've mostly talked about branded merchandise from the perspective of the customer. Putting branded merchandise out into the world, using it for brand awareness and indirect marketing, and benefiting from it as a business are all the most common use cases, but not the only use cases.

Another common use of branded merchandise is as a special reward for your employees. Consider options such as:

• Career milestone celebrations with branded merchandise personalized to the employee who reaches the milestone.
• Project completion rewards for the team that successfully meets their deadlines and produces a product that launches properly.
• Employee of the Month or other individual recognition rewards.

These kinds of rewards can make an employee feel like they're valued, and that they're part of a team. It builds engagement with the team and with the business as a whole. Since retaining employees is universally cheaper than hiring and training new ones to replace the ones you've lost, this can be an important source of value to a business.

Fun fact #5: Retaining employees with branded merchandise can save as much as $10,000 per employee.

One significant word of caution, though: branded merchandise can only do so much. In fact, it can even backfire. Think about during the height of the COVID pandemic, when healthcare workers who worked long hours at thankless tasks in a hostile environment were sporadically rewarded with "care packages" full of $10 worth of branded merch and a pizza party. Given the context, it was insulting; not only did it not boost retention, it had the opposite effect, and many workers simply quit rather than toil unrecognized.

Get your house in order, and when all of the baselines are met, branded rewards can be a force multiplier to help keep those employees engaged and loyal. If you're worried that merch might fall flat, look for other options first, like bonuses, raises, benefits, and workload balancing. Only then can you focus on improving loyalty with something like merchandise.

Making Use of Branded Merchandise

So, when it comes to making use of branded merchandise, what do you need to do?

Step 1 is to figure out what your use case is going to be. Are you going to hand out merchandise to all of your customers for a limited time? Hand them out to customers who meet a minimum threshold of new purchases? Give away random merchandise to people for no reason, or to influencers who engage with your brand? Use branded merchandise for employee rewards and recognition incentives?

The truth is, you can do any and all of these, but you need to make them separate somehow. Giving an employee a t-shirt in recognition only works if that t-shirt isn't also available for $10 on your store or as a gift with any purchase over $100. Different use cases should have different merch, and the higher the value you want to recognize with the merch, the more valuable the merch should be.

The second thing to do is find a supplier for your merchandise. Fortunately, you've already done that part, whether you know it or not. Here at Ethix, we maintain a large shop with hundreds of different kinds of items, from shirts and jackets to pins and totes, from mugs and bottles to earbuds and USB drives, and much more. All of it can be custom-branded for your business to suit whatever needs and purposes you may have.

More importantly, we make sure that every item in our shop is as ethically produced as possible. That might mean union-made products manufactured in the USA. It might mean entirely green production from "dirt to shirt" as they say. We're entirely transparent with it all, so you know you're getting nothing but the best.

Once you've chosen the right kinds of merchandise, all that's left is to start fulfillment. Make your order, receive it, and start handing it out. As you do, track your metrics and watch how your engagement numbers, recognition, and sales go up. Attributing specific data can be difficult, but seeing how well a comparatively small investment in branded merchandise can work, you won't want to stop.