While it might bring to mind the cheap pens and plastic toys often given away as promotional gifts, merchandising can be a valuable means of connecting with customers, raising awareness of your brand and boosting sales, as Kate Horstead explains
While large corporations such as McDonald's and Kelloggs are well known for giving away free toys and gifts to keep their brand name in customers' minds, small firms can benefit from merchandising, too. You can use it to achieve specific objectives such as encouraging people to visit your shop or office, or to raise awareness about a newly-launched product or service.
"The first thing to think about is a measurable objective," advises Andy Preston, director of sales consultancy Outstanding Results. "For example, do you want customers to sign up to your newsletter and communicate with you more, or to drive new customers to your website and increase online sales?"
Merchandising might seem like an unnecessary cost during the recession, but if you set clear objectives and select the right merchandise for your target audience, it can generate a valuable return on investment.
"One outdoor clothing company produced a compass with the words 'Helping you find your way to the best clothing supplier'," says Preston. "It's thoughtful and develops a loyalty between the customer and the brand."
Another common technique is to capture customers' attention with something unusual but useful, such as a branded map or beer mat. "Choose something creative to arouse their interest," advises Preston.
"Your merchandise communicates a message about your business," he explains. "So if you're in financial services you could portray your reliability with something practical, and if you're in the leisure sector, you should create something fun. For example, a go-kart business could distribute wind-up mini racers."
Weigh up the costs involved before deciding what type of merchandise to produce. The British Promotional Merchandise Association website includes details of accredited suppliers.
"Choose a good supplier who asks what return on investment you want, and what message your merchandise should convey," advises Preston.
Bear in mind that making your most loyal customers feel valued with a carefully selected gift could potentially give you as much of a return as designing, printing and sending out 1,000 impersonal direct mailings or placing a quarter-page advert in the local newspaper - both of which can cost hundreds of pounds.
"The more expensive the merchandise, the more targeted the campaign should be - send it to a small number of people and track the results," emphasises Preston.
Consider handing out merchandise to clients at meetings, conferences or networking events. Distributing it face-to-face will help you decide which contacts it is worth giving it to as genuine business prospects.
Alternatively, you could post gifts to valued customers on your database, leave a pile of merchandise on your counter for customers to pick up, or include it in the packaging of your products as free giveaways.
"Test small quantities of merchandise and see which works the best, by asking customers where they heard of you or why they decided to sign up for your newsletter or buy your new product," says Preston. "Then order more of the item that gives the best return."