Corporate gift giving is serious business. As part of a well-considered program, it can help establish or enhance critical relationships and become a cost-effective means of recognizing activities that benefit the business. This article describes the many issues to consider if a corporate gift program is to succeed.
According to numerous surveys, most business gifts are given to major clients. After that comes employees, then prospective clients. Reasons for gift giving range from thanking long-standing customers for their business to recognizing a valued employee for working on a weekend. The basic reason is the same: to affirm relationships and enhance the personal connection between giver and recipient.
Gifts differ from incentives in that they’re offered with no explicit preconditions for performance. They differ from ad specialties in that they don’t contain any blatant imprints or advertising. They differ from recognition in that they’re not part of prescribed programs.
But that doesn’t mean there’s no bottom-line benefit to be derived from corporate gift giving. For some companies, it’s an essential part of their marketing strategy. And just about everyone agrees that, done correctly, gift giving is a cost-effective way to build a sense of partnership with valued associates.
Although there’s some hard evidence relating corporate gift giving to increased business activity, it probably won’t give you the ability to make specific return-on-investment projections in your marketing plan.
Promotional Products Association International (PPAI) has conducted surveys of corporate gift givers and recipients. They have shown that vendors who gave were twice as likely to increase their chances of being contacted by recipients as those that didn’t have a gift program.
Chances are you won’t be expected to come up with any kind of hard data for this type of program, since the relationship-building pluses are pretty obvious, and the costs are relatively low.
To recognize what an effective gift strategy is, it helps to understand what it isn’t. Start by making the distinction between corporate gift giving and incentive programs. Though gifts and incentive awards often involve similar types of recipients, they differ on both a strategic and practical level. Incentives are awards for achieving defined levels of activity, such as sales quotas, safety improvements, or good attendance. In contrast, gifts are more or less spontaneous, not given as part of any defined arrangement between giver and recipient. The gift recipient doesn’t consciously set goals in anticipation of a reward, whereas the incentive recipient does.
It’s tempting to view gift and incentive programs in the same light. After all, you want to know that you’re getting your money’s worth from any business investment, and most givers want to motivate the recipient in one way or another. But be careful: Leaving customers or employees with the impression that they’re being bribed can do more harm than good. Instead, look at gift giving as a subtle, long-term process of relationship-building, following the basic guidelines described in this article so that they remain within tasteful and ethical bounds.
Before giving any gift, you should know if either the giving or receiving company has policies regarding gifts. Some companies – particularly those in the financial services, insurance, retail and medical fields – bar all gifts. More commonplace are restrictions that are placed on the value of a gift or on situations in which gifts may be given. Ask the potential recipient if his or her company publishes an ethics handbook or has any policy on receiving gifts. If so, then follow it to the letter. A few more words of advice:
- Giving gifts during a bidding process is a definite no-no, even if a holiday happens to fall during this time.
- Lavish gifts, such as cars and luxury vacations, are suspect and should be used only after careful consideration. These have become especially dangerous in this era dominated by Sarbanes-Oxley legislation requiring new levels of financial disclosure and justification for any type of expenses at most publicly-traded companies.
- Remember that the IRS now lets companies deduct a business gift valued at up to $75; for many companies this has become a useful benchmark when justifying their budgets for gifts.
- Even when there isn’t a stated restriction, be careful not to create the wrong impression with a gift. Anything that might embarrass your recipient or lead to a reprimand can sabotage a valuable relationship.
Even when not committing egregious errors that may get someone fired, be sure to use finesse if you want to get the most out of your gift program. There is an art to effective giving, so consider the following major issues before you go shopping:
Appropriateness. Care should be taken that the gift is appropriate to the business relationship. This has less to do with the dollar value of business transacted, or even the amount of time one has been doing business with the recipient, than with the closeness of the relationship. If a client seems aloof and excessively businesslike, don’t try to loosen him or her up with baubles. It can backfire. With a new relationship, don’t get too personal or too lavish with the gift. Frequency of giving generally should be restricted to major holidays and special occasions. Again, be sure to avoid the impression that you’re bribing the recipient.
Personality. It’s great when a gift has personality, but the real issue is whether the gift reflects the personality and interests of the recipient. Is she a sports car nut? Does he have an obsessive relationship with his sailboat? What’s her favorite color? Try to find out these kinds of things discreetly, because when you do (and your gift reflects it), the impression is that you care about the person and have taken the time to understand their style and taste.
Timing. The most popular times for giving, of course, are holidays. But the true champions of corporate gift giving know that other times of the year can have a more profound personal impact on the relationship. For instance, birthday gifts are bound to impress, since they show that you’ve bothered to learn a thing or two about the recipient. Important dates, such as the anniversary of a new job or the day you initiated a business relationship, may be good occasions for a gift. You can also mark such events as a promotion, the birth of a child, or completion of an important project. Whether you stick to established holidays and impersonal occasions or get into the personal life of the recipient depends on the nature of the relationship. It may seem slightly presumptuous, or even intrusive, to choose the wrong occasion for a gift.
Presentation. The best gifts are heart-felt and show it. Special care should be taken in preparing the gift. Invest in some nice wrapping paper, and take the time to compose a personal, handwritten card. This can be as important as the gift itself, since your message to the recipient conveys your intentions and sincerity. Then there’s the issue of whether to mail it or present it in person. Mailing can reduce any feelings of obligation on the part of the recipient, and it can provide some unexpected pleasure in a routine work day. If the relationship warrants it, mailing to the person’s home may add a personal touch, particularly when the gift commemorates a personal occasion like a birthday.
Customizing. To logo or not to logo, that is a key question. For many businesses, customized gifts keep the company name in the minds of recipients. When the item is a practical one that’s likely to be used every day – such as a calendar, coffee mug, or tote bag – this amounts to free daily advertising. But there’s a tackiness quotient to consider. These items may make great trade show premiums or leave-behinds, but customized items could never be considered personal, deeply heartfelt gifts. In general, avoid obvious self-promotion when giving expensive gifts or any time you want to leave the impression that the gift is coming personally from you.