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

The power of "free" is undeniable. For proof, attendany trade show. Although you'll see traffic at boothsexhibiting the latest products, there's even more traffic atbooths giving away free stuff. The same can be said for businesseswith well-thought-out incentive programs. You're sure to senseheightened morale and productivity in offices that reward employeesfor jobs well-done.

But while recipients of both promotional products and employeeincentives view the items as free stuff, such freebies are distinctfrom each other. Promotional items are hot products used asgiveaways to your customers or potential customers. Anything yourlogo will fit on is fair game-mousepads, coffee mugs, Frisbees,etc. No matter how practical or creative you are when choosing theitem, all promotional products serve the same purpose: to generatename recognition and customer goodwill.

Employee incentives are used internally rather than externally.Instead of presenting gifts to your customers to encourage theirbusiness, you use incentives to reward your employees for workinghard and achieving their goals. Employee incentives are usuallymore extravagant than promotional products and are meant to showappreciation for your employees' efforts. Can the two ever bethe same? Sometimes. While you'd never hand your employeesstress balls after the successful completion of a project, it'snot that uncommon to give them sweatshirts boasting a companylogo.

Why Promotional Items?

More technically known as promotional marketing products or adspecialty items, they're often referred to as tchotchkes(pronounced chotch-keys). And there are no rules to what youchoose-just find something that will successfully get yourcompany's name and mission into the heads of customers.

If you own a financial service, a good fit might be pocket-sizedsolar calculators. Or, if you have a car-repair shop, you couldgive away tire pressure gauges imprinted with your logo and phonenumber. A popular choice for Internet-related businesses ismousepads with a logo and URL. Seasonal tchotchkes include fleecevests and beach towels.

Why Incentives?

Incentives are designed to promote a positive message withinyour business. Managed properly, they boost morale and productivityby giving your employees tangible goals to aim for within theparameters of their jobs. The right incentive can motivate anydepartment in your business, from accounting to customerservice.

Your options are extensive, and creativity counts. Don'tlimit rewards to traditional recognition symbols like trophies orplaques. Consider merchandise, trips, gift certificates-eventime off. You can also offer group incentives or a menu of choicesto fit the differing tastes and interests of your employees.

Choosing the right incentive isn't as simple as flippingthrough a catalog. In fact, your first decision is more important:what type of program to set up and how it will be structured.Although it's easy to think of incentives in terms of an annualprogram, it's sometimes better to reward more frequently.

The incentive should match the effort exerted. Rewardingquarterly or based on targets (like hitting certain sales figuresor meeting certain deadlines) makes just as much sense as an annualprogram and can be just as effective. Of course, quarterly rewardsdon't have to be as lavish as incentives awarded annually.

Keep in mind that incentives need to reflect your employees'tastes and interests as well as the effort put forth. Plus, youdon't want to offer gifts that aren't availableimmediately. Don't make your marketing team work extra hoursone week to make a deadline, only to offer rewards that they'llreceive weeks down the road. That can be discouraging and can evenaffect their future efforts negatively. Most gifts, with a fewexceptions (like trips), should be available in less than 72 hours.That way, it's easy to make the connection between the gift andwhat it's rewarding. Cash is often looked down on as anincentive. Employees might view cash rewards as part of salaryrather than a reward. Or they may come to expect them, so use cashrewards judiciously. But avoid offering promotional products asincentives; doing so seems tacky. You have the chance to show yourappreciation for your employees' dedication with an appropriatereward, so don't use incentives as a marketing tool. Ifit's obvious that you didn't put any thought into theincentives, your employees won't appreciate them, and yourprogram will backfire.

Working With A Vendor

When selecting a vendor, choose one who will collaborate withyou and not just throw you a catalog of products to look through.Reputable and useful vendors will want to discuss the best productfor your situation and should have creative suggestions.

Promotional product vendors will manage the production processfor you. They generally act as brokers, receiving the merchandisefrom a third party. As you work with your chosen vendor, payspecial attention to the visual appearance and quality of yourpromotional marketing item, including its look or your logo.Samples should be readily available for you to inspect firsthandbefore you finalize your decision. Some vendors offer a limitedselection of gifts or an array of products from third-partyvendors. If your vendor deals with third parties, make sure theyaren't charging above retail for their products. You can alsowork with a service that will manage the program and supply therewards.

Pricing

Most companies that offer logo merchandise require a setup feeof at least $35 to prepare your artwork, as well as a minimum order(usually a few hundred of the smallest items, less of largerones).

Pricing varies depending on quality and quantity; you could payanywhere from $5 to $20 per T-shirt, for example, depending onwhether you go with brand names and how many you order. As with anybulk order, your per-item price gets lower as your quantity rises.Whatever you decide, make sure you're getting the most for yourdollar while not resorting to shoddy materials.

After all, the final product will be a tangible symbol of yourcompany's message. And you want to make it one worth hangingonto. (Visit my Web site here to shop around for promotional products.)

With incentives, how you buy and how much you spend all dependson the type of program you're running. If you'reoutsourcing to an incentives service, you could pay a lump sum oron a point system that the company administers; and your employeescan choose rewards from its online catalog. Use these figures forbenchmarking: For a sales incentive, the value of the award shouldbe between 3 and 5 percent of the participant's annual income;in a nonsales program, that number could well be as low as 1percent. But remember that you know your employees-and yourbudget-best.

Promotional products and incentives have proved to be quiteeffective in promoting businesses both inside and outside companywalls. The toughest part about incorporating them into yourbusiness is deciding on the products and ideas that best suit yourcompany and your budget. But spend the time to make a smartdecision on what to offer-you'll reap the benefitsmultifold.

Most Popular Promotional Items

* Most vendors require a minimum order; webased our prices on a minimum order of 100. Pricing for products isfigured before any printing. Expect to pay $35-$75 per order forsetup charge. (The range reflects the different methods of logoprinting.)

Mie-Yun Lee is the founder and editorial director ofBuyerZone.com, a premiere online marketplace for growingbusinesses. Diane O'Brien contributed to this article.