How to budget your yearly employee merchandise spend

Investing in employee merchandise is becoming a popular way for companies to boost engagement, build loyalty, and create brand ambassadors. However, structuring a yearly budget for swag can often feel challenging. How much should you spend? What should you focus on? How do you maintain a balanced yet impactful merchandise strategy?

example of an employee merchandise strategy plan

In this guide, we'll walk you through how to budget your employee merchandise efficiently, focusing on key moments and activations, and managing it in a structured way to maximize return on investment.

1. Understand your baseline budget per employee

One of the first steps in budgeting for employee merchandise is understanding how much to allocate per employee. While the specific amount can vary depending on your industry, company size, and goals, here are three general spending ranges:

• Low-end (75€/employee/year): Ideal for companies with a limited budget, this allows for a few key activations like onboarding or end-of-year gifts.
• Mid-range (150€/employee/year): A recommended budget for companies looking to integrate merchandise into their culture, allowing for 4-5 meaningful activations.
• High-end (250€/employee/year): For companies where merchandise plays a key role in employee engagement and brand building. This budget allows for regular activations throughout the year, from onboarding to special events.

Although some companies may want to segment budgets for different levels of employees, we advise keeping merchandise equal across the board to foster unity. However, specific events like executive retreats or management gatherings can have additional merchandise, allowing for a little flexibility without creating unfairness.

2. Focus on the core moments: always-on campaigns

The foundation of any merchandise strategy should be your always-on campaigns—those key moments that should be celebrated year after year. These two moments are the most crucial for any employee merchandise program:

Onboarding is your company's first opportunity to make a great impression. A well-thought-out welcome kit not only helps new employees feel like part of the team but also reinforces your brand identity from day one. It's an important investment in retention and engagement right from the start. We also wrote a complete guide on starting with employee welcome kits.

employee welcome kit example

Anniversaries and tenure milestones are just as vital. Recognizing employees who stay with your company shows appreciation for their loyalty and contribution. Whether it's an annual celebration or for specific milestones like 3, 5, or 10 years, these moments should be well-executed, with thoughtful gifts that convey value and recognition.

an anniversary fleece blanket

These two core moments should be the backbone of your merchandise budget. If you compromise on these activations, you risk undermining employee engagement. Providing quality, thoughtful gifts during these milestones is essential for long-term success.

3. Build around strategic campaigns and events

Once you've established your always-on campaigns, it's time to plan for additional activations. These might include seasonal activations, such as holiday or summer gifts, or company-wide events like team-building exercises.

For instance, many companies choose to send out holiday gifts that reflect the season, such as cozy blankets or personalized apparel. Similarly, summer activations—like beach towels, sunglasses, or water bottles—can create positive associations as employees head off for vacation. Click here to download our free employee Christmas campaign playbook.

If your company has a team-building event or sports program, adding branded merchandise like athletic gear or event-specific items can boost morale and increase participation. The budget for these events can vary based on the scale, but the key is to ensure they align with your company's goals and culture.

Not every event needs the same budget, but having a year-long calendar of planned activations will help you manage resources efficiently, ensuring engagement throughout the year without overloading employees with too many items.

4. Efficient deployment and logistics

Managing employee merchandise doesn't stop at selecting products; it involves managing sizes, customization, logistics, and distribution. For companies with remote or international employees, this can become overwhelming.

That's where platforms the Sunday Wardrobe come in. We handle every aspect of the logistics, from warehousing to global shipping and customs management. Our platform also allows you to store employee sizes and preferences for smooth order fulfillment. You can run redeem campaigns, automate onboarding and anniversary gifts, and even give employees more options through a coin-based system, allowing them to choose their preferred items.

Internal employee merchandise shop

This approach takes the hassle out of managing merchandise, making it easy for HR managers to focus on what matters most: keeping employees engaged and connected.

5. Measuring ROI and employee engagement

Tracking the impact of your employee merchandise program is essential to ensure that your investment is delivering results. There are a few key metrics to consider when evaluating the effectiveness of your swag program.

Comparison of employee engagement after a merchandise campaign (scientific study with University of Brussels and NMBS)

The employee net promoter score (eNPS) is a valuable metric, as it measures how likely your employees are to recommend your company. Merchandise has a direct impact on eNPS by fostering a sense of belonging and brand ambassadorship. Wearability is another important measure—tracking how often employees wear or use the items you give them provides insight into the success of your merchandise choices. Items like hoodies, t-shirts, and other wearable items often have the highest ROI as they help create a visible connection between the employee and the company.

You can also gather feedback from employees about the quality and usefulness of the items they receive. This data helps refine your merchandise selections and ensures that each year's activations are more aligned with employee preferences. By integrating this feedback into your strategy, you can make your merchandise program not just a cost but a key driver of employee engagement and loyalty.

Conclusion

Budgeting for employee merchandise is about more than just picking a few products each year. By focusing on key moments like onboarding and anniversaries, and building a thoughtful, structured plan around seasonal activations and events, you can create a merchandise strategy that not only engages employees but also supports your company's long-term goals.

By using a partner like Sunday, you can streamline the logistics and ensure that your merchandise program is efficient and impactful. And with clear measurement strategies in place, you'll be able to show leadership how this investment contributes to greater employee engagement, satisfaction, and brand ambassadorship. Contact our team now to setup a free consultation call.