

ROI on T-shirts - bretthardin
http://blog.sourceninja.com/roi-t-shirts/

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frankdenbow
Great analysis! I've been working on a startup merchandising site
(StartupThreads) so I think about this a good deal. A few tips from working
with companies:

1) Make it interesting - Tie your design into the ethos of what your customers
care about. This can compelling beyond just your logo/brand (An Example by
CloudMine: <http://on.fb.me/MD9E0W> and AngelHack <http://on.fb.me/Mmn8CM>)

2) Fit & Quality Matters - Spend the extra few dollars to get a decent
American Apparel shirt, as it will fit better and stand out amongst the
bargain bin shirts that most startups hand out (order womens sizes, guys).
Increases the likelihood that they will wear it more than average shirt.

3) Make It Exclusive - There are varying strategies on this, but it is my
observation that giving it out to those who really care about your company is
the best way to go. You don't want the receiver to feel like you are bribing
them to try their service/product. It works better if you are thanking them
for their loyalty, as you help to solidify that relationship.

4) Reduce Your Colors - Most t-shirts that you are going to put out are screen
printed and the cost varies based on the amount of colors used in the design.
You can get great results with a one color shirt (see stripe:
<http://on.fb.me/MHG7Hp> or foursquare:
<http://foursquarestore.com/shop/product/SH_MayorCrown>). Even if you have a
multicolor logo, there are likely ways to represent it with less colors and
still communicate the same things.

5) Ask If The Printers Save Screens - If you are screen printing, have your
printer save the screens they use, as it is a fixed cost that can save you
money on subsequent runs

6) Vector Artwork (!!!) - Make sure your designer creates vector versions of
your logo for print (bonus points if they do different versions for varying
amounts of colors). You do not want your logo to look jagged when printed, so
the best bet is to play it safe with a vector version of all artwork. (I spend
most of my time dealing with this, actually)

Working on a full post on this, will get it out soon!

~~~
atopiler
Awesome complementary wisdom to a great post. Thanks Frank.

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bstpierre
It's an interesting methodology. Some thoughts:

(1) 12 times is way too low for number of wears. I'm probably extreme, but
I've got tech shirts that could apply for a drivers license; I've easily worn
some of them hundreds of times -- let's say every other week for the last 500+
weeks. (The older shirts are too worn thin/ragged to wear in public any more
though.)

(2) I'm not sure CTR is going to be as high as an explicit ad. Clicking a link
is a fairly low barrier, and still only gets a 0.14% conversion. CPC is
probably the wrong model to apply; you might want to look at it as traditional
advertising and apply a CPM. For what it's worth, I'd bet that your conversion
rate would be higher than average since the visitor has already qualified
themselves somewhat more than just a casual clickthrough.

(3) For all of the times I've worn those tech shirts, I can only recall a
couple of times when someone has actually talked to me about one of the
shirts. Once (a nice polo shirt with embroidered logo) I was asked if I worked
for the company (which was somewhat well known) -- the answer was no. The
other time was when a fan of the by-then defunct company mentioned on the
shirt remarked that it was too bad the company had imploded.

(4) I've gotten free t-shirts that required very little engagement on my part
with the company. E.g. rackspace sent me a shirt several years ago I think
just for answering a survey; I've never been a customer. Definitely consider
giving shirts to people who can actually talk about you if someone _does_ ask
about your company. IOW, the CPM on a "talking billboard" is worth more than
on a static billboard.

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JoshTriplett
> (1) 12 times is way too low for number of wears. I'm probably extreme, but
> I've got tech shirts that could apply for a drivers license; I've easily
> worn some of them hundreds of times -- let's say every other week for the
> last 500+ weeks. (The older shirts are too worn thin/ragged to wear in
> public any more though.)

Depends greatly on the quality of the shirt. I have shirts that have held up
like you describe, and I have shirts that became unwearable after a half-dozen
times. If you want to provide shirts, don't use the lowest bidder.

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bretthardin
We did some ROI calculations on purchasing and distributing t-shirts. Do you
guys think that we missed anything, or made the wrong assumptions?

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loumf
Aside from it not being ROI, I thought it was as good as any guess. What I was
hoping for was a clever way of measuring some of the things you assumed.

I think what you calculated is called customer acquisition cost. ROI is how
much you made from your investment in a given time, usually as a multiple of
the investment -- sometimes it's quoted in time to breakeven.

~~~
bretthardin
Once I read this comment, I think it clicked. The result of what we calculated
is customer acquisition cost. But, we were trying to figure out if T-shirts
were worth the upfront cost. I am not a marketer, so I am 100% sure I am
confused by the terminology.

~~~
loumf
To get ROI, you need to also know the value of a customer. If each customer
pays 2 x Customer Acquisition cost in the first month, then the ROI is 2 in
the first month. If it's a subscription, and 100% stay for a year, then it's
24 (or 2400%) in the first year.

Pro-ROI calculations take into account the time-value of money and taxes.

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maxko87
I think this is a cool calculation, and the numbers seem pretty reasonable.
One benefit from tshirts that isn't taken into account here is simple exposure
-- even if someone who sees the shirt doesn't follow up on the company
themselves, let alone become a user, they are at least more likely to remember
and recall the name. (Coming from MIT, it seems like Palantir and Dropbox had
a lot of success getting good word-of-mouth campaigns going because of their
stylish shirts).

Also, quality does matter. An extra couple of dollars per shirt can make a
disproportionately large increase in the number of times the shirt is worn.

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objclxt
Given we both just posted within two minutes of each other about how great the
Dropbox t-shirts are I think we can conclude it was quite the investment for
them!

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loumf
Is this it? [http://stream.mcohen.me/entry/dropbox-t-shirt---
back-22-173....](http://stream.mcohen.me/entry/dropbox-t-shirt---
back-22-173.html) \-- this is great because it almost begs anyone who sees it
to ask you what it means.

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aqme28
Why use Click-Through Rate to calculate return? Cost Per Impression would make
a lot more sense to me, since it is closer to how traditional advertising is
measured.

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bretthardin
Excellent point. We aren't traditional marketers and some of the terms are
still newish to us. I will revisit the terminology of the article and update
it.

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simulate
The formula you are using looks correct, but the value estimations are mostly
wild-ass guesses, particularly the CTR. My own guess is that CTR for t-shirts
would be much lower than traditional online ads, but who knows?

Suggestion: create a unique URL on the t-shirts so that you can test
effectiveness-- a landing page for the t-shirt. That way you could even test
alternative t-shirt designs, if you wanted to.

~~~
alanfang
To me the CTR seems reasonable, if anything I would guess that 0.14% is a low
estimate. The conversion rate on the other hand is sky high. Even for a free
software product expecting a 7% conversion rate on fairly untargeted traffic
is unreasonable.

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majke
T-Shirts are boring. That's why we give away embroidered socks! (with
embroidered sock of course)

<http://pic.twitter.com/1M6w281b>

