Promo Power

A little freebie goes a long way toward promoting customer and employee loyalty.

The power of "free" is undeniable. For proof, attend any trade show. Although you'll see traffic at booths exhibiting the latest products, there's even more traffic at booths giving away free stuff. The same can be said for businesses with well-thought-out incentive programs. You're sure to sense heightened morale and productivity in offices that reward employees for jobs well-done.

But while recipients of both promotional products and employee incentives view the items as free stuff, such freebies are distinct from each other. Promotional items are hot products used as giveaways to your customers or potential customers. Anything your logo will fit on is fair game-mousepads, coffee mugs, Frisbees, etc. No matter how practical or creative you are when choosing the item, all promotional products serve the same purpose: to generate name recognition and customer goodwill.

Employee incentives are used internally rather than externally. Instead of presenting gifts to your customers to encourage their business, you use incentives to reward your employees for working hard and achieving their goals. Employee incentives are usually more extravagant than promotional products and are meant to show appreciation for your employees' efforts. Can the two ever be the same? Sometimes. While you'd never hand your employees stress balls after the successful completion of a project, it's not that uncommon to give them sweatshirts boasting a company logo.

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This article was originally published in the November 2000 print edition of Entrepreneur with the headline: Promo Power.

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