October 29, 2024
In part 1 of this series, we discussed the elements of a successful custom merchandise program and covered the differences between cheap swag and free giveaways, contrasting it with the value of custom merchandise and promotional merchandise programs.
Now that you understand some of the nuances and distinction between cheap swag and custom merchandise, it's time to show you how to build a custom merchandise program for your business.
In this guide to building a custom merchandise program you'll learn about:
Buckle up! This resource is lengthy, but it's stuffed with useful information to reference. If you don't have the time to read the full resource now, make sure to save it so you can return to it later. Also feel free to use the table of contents to jump to the part of the custom merchandise guide that calls your attention.
Brands have existed for thousands of years. Brands arose as a way to build quality and signal trust.
During the Industrial Revolution, mass production allowed brands to experience seismic growth.
Today, when we think of brands, organizations with cult followings like Nike, Apple, and Coca-Cola are the first ones that come to mind.
Sales for these behemoths are greater than ever, but in recent years we have experienced a resurgence in the popularity of local brands and small businesses.
This spike can be attributed to a convergence of multiple events including the Covid-19 Pandemic, peoples' desire to go out more often, the craving for a personal connection, and the rise of the influencer economy.
Regardless of the size of your business, there is a strong case for building a robust custom merchandise program now more than ever:
All productive outcomes begin with an effective and intentional strategy. Football games are won by diligently following a playbook, growth in the gym occurs with a structured workout plan, and even a trip to the grocery store involves writing a list of what you plan to buy.
This is especially true in business. Any business activity that you do requires strategic planning, goal setting, execution, and evaluation.
Let's take a look at how an effective and intentional strategy works to build a custom merchandise program. We'll start with a fictional example, Ezra's Pizzeria, a local pizzeria in Gilbert, Arizona.
(Note: Although this example involves a pizzeria, the same steps and process can be applied to any business, including yours).
How to Set Goals and Create a Strategy for Your Custom Merchandise Program
"Success is 20% skills and 80% strategy. You might know how to succeed, but more importantly, what’s your plan to succeed?" - Jim Rohn
Ezra's pizzeria is a staple of downtown Gilbert, Arizona. In the 15 years that it has been in business, Ezra's Pizzeria has experienced steady growth.
Ezra's operation started out at home. From the time he was a kid, Ezra was always interested in cooking. He loved to experiment with new recipes and see the delight in others eyes when he would share one of his meals.
Ezra started experimenting with pizza recipes in 2009. Every weekend he would invite his family and friends over for a dinner party to try his new deep-dish pizza he. Ezra's pizza was always a massive hit with his acquaintances. They gave Ezra frequent compliments about the savory flavor and the chewy crust.
For years, Ezra had wanted to open a restaurant. He felt like he could bring his vision to life with a pizzeria.
In 2009, Ezra's pizzeria was born. Ezra decided to open his pizzeria in the heart of downtown, funding his new operation with his savings and a small business loan.
Ezra quickly learned that nothing about running a business comes easy. His, arduous 65 hour weeks quickly led to a need for additional staff, equipment, and tools. From years one to three, Ezra learned which pizzas were his customers' favorites. He also learned that they were avid sports fans. This insight led him to add a foosball table, corn hole boards, and a TV lounge where his customers could watch their teams play.
As customers spent more time at Ezra's pizzeria, it earned a reputation as a location where avid sports fanatics could go and talk about current events in the NFL, NBA, and MLB. Customers visited and speculate about what would happen in upcoming games, and talk trash with each other. Every week customers placed bets on "the game of the week" for $5. The customer that bet the closest to the actual score would win the entire pot.
It's 2024, and Ezra has heard of custom retail-quality merchandise. In the past, Ezra handed out free custom giveaways or swag items for events that he ordered from print-on-demand companies. When Ezra ordered his custom merchandise from a print-on demand company, he didn't receive guidance. He uploaded his logo to their website, and they shipped him the goods he ordered.
Ezra's custom merchandise wascheap quality, and customers didn't express much interest in them. When customers wore these T-shirts and lanyards, it was usually short-lived. Customers would wear them while doing a project around the house such as painting or mowing the lawn, but these items never became a staple of their wardrobe. Ezra knew that he needed to change his custom merchandise offerings and offer merchandise intentionally in order for them to be successful.
Does this story sound familiar? Like Ezra, you've most likely experienced many of the highs and lows of being a business owner. Over time, you have been able to steadily grow your customer base beyond what you initially imagined. Your business has a distinct, locale feel that is different from your competition.
You want to capitalize on the success of your brand and grow your customer base. In the past, you have handed out swag items, but now that you've heard of custom merchandise programs, what should your strategy be to get started?
"There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market." –Philip Kotler
You have a niche brand, and before you start designing or producing your custom merchandise, you must have a clear understanding of who your target audience is. It's important to do this because the entire purpose of a custom merchandise program is to sell your merchandise with intention. If you don't have an understanding of who your target audience is, your custom merchandise won't be effective.
You might think that your target audience is everyone. That is incorrect. You have a niche brand, and you need to be able to define it. One of the greatest mistakes that ambitious business owners make is trying to appeal to everyone. There is a distinction between appealing to as many customers as possible and appealing to everyone:
If Ezra's Pizzeria was trying to identify its target audience, they would would ask themselves the questions listed above. The answers should look something like this:
Ezra's pizzeria is a fictional example, but the key for defining your target market is to get as detailed as possible. The above are just some of the questions that you can ask to identify your target market so that you can sell your merchandise with intention. The more granular that you can get while doing this exercise, the better; it will help you narrow down a specific audience for your custom merchandise solutions.
With the information you gather, you can identify patterns about what makes your brand unique.This will help you form your custom merchandise strategy.
When we considered Ezra's Pizzeria, we identified themes of camaraderie, sports fanaticism, competition, community support for sports, and local connection and gathering. These themes represent multiple facets of Ezra's brand that can be implemented and leveraged in his custom merchandise solutions.
Now that Ezra has identified his target audience, he can use the information he gathered to develop an appealing custom merch program that is executed with intention. However, Ezra can only do this after he sets goals for the program and creates a comprehensive strategy for its scope. Remember, the difference between a custom merchandise program is to sell merchandise with intention as opposed to giving cheap giveaways for free.
Ezra might ask questions such as the following to help him set goals and strategize for his custom merchandise program:
A custom merchandise company will help Ezra review these questions while creating his program.
In essence, the questions that you should ask before setting goals and creating your custom merch are similar to the questions you would ask for any business plan.
Using the example of Ezra's Pizzeria, here is what the numbers will look like. They might look different for your business, but the concept is the same.
The implementation of any program inevitably involves adaptation, adjustments, and breaking down barriers as they arise. This is what makes a brand merch strategy different than buying swag or handing out swag for events. The point of creating a custom merchandise strategy is to have clear goals and an overall vision for what you want your custom merchandise program to become.
"Business is not just doing deals; business is having great products, doing great engineering, and providing tremendous service to customers. Finally, business is a cobweb of human relationships." - Jeff Bezos
You've set goals, created a vision for your custom merchandise program, and you have a strategy to move forward. Now it's time to execute on your plan and make it a reality.
It's time to produce your custom merchandise, so how do you get started?
Once you have created a list of merchandise providers that possess the qualities you are searching for, get in contact with their sales representatives and ask them detailed questions to make sure that you are a good fit. Your merchandise partner will create your merchandise, and when you receive it you are ready to begin selling.
Custom merch won't generate any revenue if it sits in a closet, or the back corner of a shop.
Now that Ezra has a custom merchandise solution that is a powerful representation of his brand and looks awesome, his offering must be properly positioned to sell.
Let's consider two examples:
As mentioned previously Ezra's Pizzeria is heavily involved in the local sports scene. Ezra donates one percent of all of his revenue to support underfunded sports. There is numerous ways that he can incorporate custom merchandise into this strategy to get more people to buy into the cause.
Ezra's pizzeria holds a weekly competition for the NFL or NBA "game of the week". Every participant buys into the competition with a five dollar contribution. After the game has concluded, the pot is distributed in a winner-take-all fashion.
The pizzeria'a weekly competition is a prime opportunity to incorporate custom merchandise. Ezra can do the following:
In addition to receiving the cash pot, the winner of the competition can receive a custom t-shirt and beer glass exclusively available to the winner of the competition. A cool merch idea might include:
We've already covered the importance of time, location, and accessibility when considering merchandise placement.
Another critical consideration of custom merch positioning is which channels you should use to sell your merchandise. Venues include:
Pro tip: Amazon will take a portion of the revenue for each unit sold, so consider this before deciding if this channel is worth it. It will also require an employee that is capable of managing your channel and fulfilling orders (This can be the same person that is in charge of managing your online store). Always consider the costs before starting.
If you don't have the staff or bandwidth to offer online fulfillment for your customers, contact us, we can help.
If this is your first time selling custom merch, it can be hard to position your merchandise in a way that resonates with your customers. How do you do it? A good way to approach this question is to think of how you would want to experience to experience the merchandise if you were a customer.
For example, if you are a winery, it would make the most sense for your custom merch to be displayed at the end of your tour when customers are most excited. This is why when you go to Disneyland, there is always a gift shop at the end of the rides that contain merchandise related to the attraction. It's also why popcorn sells best at the movies, etc.
Grid City Brewery Works, a Brewery in Downtown Salt Lake does a great job of displaying it's custom merchandise. It is prominently displayed for customers to see as soon as they walk in or are ordering merchandise or beer.
Correct pricing is integral to your custom merchandise program:
Imagine there are two small businesses that sell T-Shirts. One is priced at $3 and the other at $40. How would you perceive these two shirts, and how would this perception shape your decision making?
If you are like most people, the higher priced small business shirt would signal higher quality and the lower priced T-Shirt would signal lower quality.
It has been proven in scientific studies on price and perceived value that two identical wines, one priced low and the other priced high were perceived differently. Participants in the study didn't just perceive the expensive wine to be of higher quality, they also reported that it had a premium quality taste compared to the economically priced wine.
This study has massive implications. It shows that there is a direct correlation between pricing, perceived value, and customer experience.
With this knowledge in hand, you shouldn't manipulate customers by artificially setting high prices just for the hell of it, but you should price your merchandise in a way that communicates the value of your merchandise and enables you to be profitable.
Consider the anomaly of an apple priced at $100. A piece of ordinary fruit priced this high will surely turn customers' heads. They will wonder what is so special about the apple that makes it command such a high price. But if customers were to conduct further research on the apple and discover that there was nothing special about it, they wouldn't purchase it, and they would also feel very deceived.
This example demonstrates accurately priced products can lead customers to make an informed buying decision, and communicate value or prestige. But prices that are set artificially high (well beyond the price range of items in a similar category), or set beyond the value of what a customer considers fair will be rejected by customers and may lead to backlash.
In order to offer any product or service, it has to make sense financially. Offering your custom merch at the correct price enables you to do that. By setting a specific price, you can easily determine how much revenue your program will generate, and whether this amount is sufficient to hit your goal.
Pricing has always shaped microeconomic factors of supply and demand. Pricing helps customers determine if a product is in their price range. Pricing also holds the power to influence who your buyers will be and the status of the object under consideration.
Contrary to what you think, most customers won't mind paying for merchandise priced between $30-$80, especially if they love your brand. If anything, this will raise the perceived value of your merchandise, leading to customers wearing your merchandise longer and more frequently.
Custom merchandise is an ideal product because when priced correctly, you can make a considerably larger profit margin than many other products. Let's say that Ezra purchases 72 retail-quality t-shirts of various sizes for $10-$12. Because the shirts that he is selling as part of his program are retail-quality, they can be sold for $30 dollars, or a 58 percent profit margin.
As a custom merchandise company, we provide you with set tiers of pricing for you to sell your custom merch. These competitive prices will enable you to generate high-margin revenue and sell your products. Essentially, all you need to do is use the price that we recommend and watch your sales increase.
In many ways, a custom merchandise program is similar to performing maintenance on a car. The process is mechanical, it doesn't happen organically, but requires constant fine-tuning and evaluation to run optimally.
Always be on the lookout for deficiencies in your operation, but just like your car, don't make any quick changes until you are able to draw a correlation between the issue and its effect.
Using our example above, Ezra might notice after his custom merch program has been running for six months that his embroidered hoodies are the lowest selling item but he is unsure why.
There are a variety of questions that Ezra can ask to research this issue:
This list of tools that you can use to evaluate the effectiveness of your custom merchandise program and make changes when necessary isn't comprehensive, but the following techniques are good starting points.
A/B testing- Think of A/B testing like running a science experiment. You select one variable that you think can be the issue and change it for a period of time while maintaining everything else the same. In our Pizzeria example, if Ezra has doubts about the positioning of his embroidered sweatshirts, he can put them at the front of his display for a few weeks and see if they sell better. If they aren't selling better in a few weeks, then the issue might not be positioning.
A/B testing is great for isolating variables to diagnose an issue. However, its weakness is that there are countless variables to identify when considering human psychology and behavioral economics.
Customer surveys- Customer surveys are a great way to get immediate feedback about an area of concern for your custom merch program, especially if you personally know your customers, or if you have an online store and have data about specific customer purchases. You can use the feedback that customers provide about why they haven't purchased a specific item to make changes.
However, you should take this feedback with a grain of salt. It has been shown that consumers aren't the best at identifying why they make the buying decisions that they do.
A survey also runs the risk of getting a low response rate. The best way to get responses from a survey is to offer an incentive for taking it.
Professional evaluation- A benefits of partnering with a custom company as opposed to just a provider is that a custom merchandise company can perform an audit of your custom merch program and help you troubleshoot the issues that you may be experiencing and implement changes.
A custom merchandise company will work by your side to evaluate and troubleshoot any roadblocks you experience with your program. You can implement their feedback to address any performance issues.
Conclusion
A custom merch program is intentional and strategic; if there's one thing to take away from this post, you should remember that a custom merch program is strategic and intentional. Buying cheap swag that you giveaway doesn't generate revenue, but leveraging custom merchandise does. By following each strategic step outlined above, you will be able to:
As a custom merchandise company, we have helped thousands of companies on their journey towards building effective, high-performing custom merch lines. The merchandise we produce doesn't just look amazing, it produces significant revenue for the brands that we work with. A few of our most noteworthy success stories include:
These are just some of the examples of what we can do, but the possibilities are endless. No matter how large or small your business is, it can benefit from the proper custom merch.
Contact us today, and let's get started!
October 29, 2024
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