Promotional Products: Are They Right for Your Small Business?

by | Last updated Oct 31, 2023

Take your small business marketing strategy one step further with promotional product branding. Learn how to use promotional products to advertise your small businesses.

What Are Promotional Products?

Promotional products are items branded with your small business’ logo or slogan that you give to people for very little to no cost. This branded merchandise is a physical advertisement for your business. Here are common promotional product examples:

  • Personalized pens
  • Branded notebooks
  • Custom bottle openers
  • Branded mugs
  • Promotional bags
  • Branded umbrellas
  • Promotional water bottles

Why Your Business Should Use Promotional Products

Not every business will find that promotional merchandise is the right choice—like luxury brands, businesses that sell digital products, or companies with a small target audience—but there are many benefits of promotional items for most small business owners. If you’re a self-employed lawyer, chiropractor, realtor, restauranteur, or another local profession, you should consider using free promotional products for the reasons below.

Brand Recognition

People need to see a brand at least seven times before making a purchase, so by giving potential customers tangible items with your logo on it, you’re repeatedly putting your name in front of them so that they’re 85% more likely to seek out your business when they finally need your product or services.

Cost-Effective Marketing

Promotional product marketing has a cost per impression (CPI) as low as 1/10 of a cent, whereas digital marketing has an average CPI of $3 to $10. And, on average, promotional merchandise stays in customer households for over eight months–meaning you’re collecting impressions longer than more traditional marketing methods like billboards or paid ad campaigns.

Customer Loyalty

Promotional gifts don’t only have to be for new customers. Giving out free swag is a great way to show appreciation to existing clients and encourage repeat sales. In fact, three out of four people will choose a company that gives them a promotional product over an equally recognizable brand that does not offer promotional items.

Lead Generation

If you set up a booth at a trade show, business conference, or a local event, how will you draw people in? Laying out free promotional items (or “free” in exchange for contact information) on your table can attract more visitors, letting you start more conversations with potential customers and generate more leads.

More Versatility

Promotional items are most effective when they’re made for everyday use—like personalized pens and notebooks at work or branded mugs and koozies for after-work relaxation. Where most marketing platforms only serve customer needs in the moment, promotional products can be there on the daily.

Norm of Reciprocity

The norm of reciprocity is the idea that when a business does something nice for customers–like give them a free branded product–they’ll feel obligated to repay the business. Repayment could be a purchase, subscription, or recommendation, all of which help add to your customer base and get more business.

Social Media Engagement

If you gift branded items as part of a social media giveaway, your posts can get more engagement. Instagram contests with winnable products get 64 times as many comments and 3.5 times as many likes as regular posts.

Wider Reach

Custom promotional products put your logo in front of the customer who initially received your item, along with everyone else who sees that product as it is being used. As more people see the items, they could look up your business online, giving your website more traffic.

How to Create Promotional Items for Small Businesses

Like any marketing strategy, it’s important that you do the proper research and preparation before diving headfirst into the world of promotional products. Here are the steps you should follow to effectively create and share your branded merchandise.

Define Your Target Audience

Who will use your promotional marketing products? The target audience you’ve already identified for your other marketing initiatives will guide this, but not everyone in that group will want the same promotional items, so you’ll need to segment your audience further.

Take a small business that sells handmade jewelry as an example. The company’s target audience might be women aged 25-45. However, this group can be segmented into two main audiences:

  1. Primary: Those with a higher income who are interested in high-end jewelry for special occasions
  2. Secondary: Those with a moderate income who are interested in affordable, everyday jewelry

Since the primary audience expects a higher price point, they might respond better to high-quality and personalized promotional products like branded jewelry boxes or custom velvet pouches, while a polishing cloth or branded cleaning solution might be a better fit for the local business’ secondary audience.

Set Your Budget

Your budget for promotional products should come from your small business marketing budget (which could be anywhere from 3% to 10% of your total revenue). Because the price of promotional products will vary greatly depending on the type of products and level of customization you choose, you’ll need to do an assessment to see how much of this budget you can allocate for promotional merchandise. Your available budget will also dictate the number of products you can buy, and may even influence the types of products you can afford.

Narrow Down Your Options

Once you have information about your audience, as well as a budget, it’s time to figure out which promotional products will give you the best results. The most important tip for promotional marketing is to make your products convenient and useful. After all, the more customers can actually use these branded products in everyday life, the more exposure you get for your brand.

For small businesses that cater to a more general audience like realtors, plumbers, or electricians, you’ll likely find success giving away promotional products like branded pens, mugs, and other office supplies or general-use items that are universally liked. For specialized brands—like an outdoor recreation company, for instance—you might find more success giving out items that cater to your audience’s specialized interest, like carabiner clips, a utility knife, or sports apparel and bags.

Choose a Production Partner

There are a variety of companies that produce promotional products for businesses. Some can help you with the design process, while others deliver a variety of products. The best promotional product company for your small business will depend on which features you need. If you’re looking for free samples and multiple product types, you might like companies like Vistaprint, Positive Promotions, or If you need to prioritize quick shipping, Zazzle or DiscountMugs could be your choice. Or, if you want help with design, consider a production partner like Customon.

Design & Order Your Items

Designing custom promotional products is relatively simple–you want the main focus to be on your brand, so put your logo and brand colors front and center. Make sure text is well-sized so that it’s still readable if you’re ordering smaller promotional products like pens. For larger branded items like bags and apparel, a more detailed, eye-catching design is best.

In this step, you’ll also need to know how far in advance to order your promotional items. Check the average shipping times for your production partner site, and always allow extra time in case of shipping delays. A good rule of thumb is to place your orders one to two months in advance to allow time for quality checks once you receive the order and do any troubleshooting if needed.

Where to Distribute Promotional Products

You have your promotional items created, now where do you give them out? Here’s where you might use your promotional merchandise.

Holiday Gifts

From the Fourth of July to Small Business Saturday, you can make any holiday more special with free marketing materials. Create a successful holiday marketing campaign by giving out holiday-themed promotional products. Make sure the products you give out are relevant to the occasion and your company, while still being useful to your customers.

Here are a few ideas for end-of-the-year, holiday-themed promotional products that small businesses could give out:

  • Bakeries: Gingerbread cookies, candy canes, holiday-themed aprons or oven mitts
  • Restaurants: Peppermint bark, holiday-themed placemats, or napkins
  • Retail stores: Holiday-themed shopping bags, gift wrap, gift tags
  • Salons and spas: Holiday-themed bath products or gift baskets
  • Service businesses: Holiday-themed calendars, pens or pencils, and notebooks

Local Events

Whether your business is attending a trade show, industry conference, or a local market where your business has a booth set up, local events are some of the best places to share your promotional products. These can even be central to your in-person marketing strategy by providing an incentive for customers to approach your table.

Have your items in an easily visible spot, and consider adding an “Ask us about our free products!” sign. You could even have a drawing or reward wheel that people spin to get a prize. To take it a step further, require an email signup before allowing someone to spin or enter the drawing.

Rewards Program

Show some appreciation for your loyal customers on the anniversary of them joining your rewards program with free products! Your customers will feel special, and their perception of your business will improve. Plus, customers that aren’t a part of your rewards program yet will see this as an added reason to sign up.

Social Media

Social media (specifically visual platforms like Instagram, Facebook, and Tiktok) is a great place to hold a contest or giveaway for promotional merchandise.

Have your audience follow your account, then like and comment on the post with details about the contest to enter. You can even allow multiple entries with multiple comments if you’d like! Choose a few random users as your winners and message them for their information to send them prizes.

*Data from Advertising Specialty Institute’s (ASI) 2019 Ad Impression Study

Stefanie Vanderbeek

Stefanie Vanderbeek

Stefanie Vanderbeek is a content strategist and writer who specializes in long-form digital content and website SEO optimization. Stefanie earned her Bachelor of Journalism from the University of Nebraska-Lincoln in Advertising and Public Relations in 2021. In her free time, you can find Stefanie reading, deep diving into video game lore, singing in her professional vocal group, or traveling the world!

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