Gifts can go a long way toward building better business relationships. However, there is a double-edged sword to corporate gift-giving. If you select the wrong gift, it’s forgettable at best and, at worst, damaging to your reputation or harmful to a client’s sense of your good judgment.
A well-executed corporate gifting campaign reinforces to recipients — whether they are clients, a company’s employees, third-party partners or something else — the gratitude the gift- giver feels toward the recipient. A misstep in a corporate gifting effort can leave a recipient feeling they are misunderstood by the gift-giver or not authentically appreciated.
An astounding amount is spent on corporate gifts. One study estimates businesses will spend over $300 billion this year on gifts. Yet so many corporate gifts barely make an impression.
If a food basket falls into a company waste bin after going uneaten and unappreciated, does anybody hear? Does anybody care? Is the gift-giver even aware of its fate?
The answer is likely no to all those questions.
Appreciating Appreciation
Tom Romine is on a mission to help companies make a lasting impression with their gift recipients, and thereby increase the return on investment they reap from their significant spending. Romine is founder and CEO of Cultivate, a Boulder, Colorado- based provider of online and onsite gifting services that, he said, is driven to “help our clients appreciate appreciation.”
Romine said more business leaders are waking up to the vast amount of money that is wasted on corporate gifts that leave no positive impression or, worse, have recipients scratching their heads in disbelief or even disappointment. The website Business.com states research that it conducted shows that 54% of corporate gift recipients have thrown away at least one gift without using it.
Tackling a company’s holiday gifting effort is often a task that gets handed off to an administrative assistant or junior colleague who is juggling a long list of other responsibilities. It gets a “check the box” approach and a modest budget to match.
Many companies simply repeat whatever was done the previous year.
According to Romine, forward-thinking companies are reassessing why they gift in the first place and are adopting gifting strategies that better align with their reimagined goals. Here are some shifts that Romine and others in the corporate gifting world are observing as companies pursue a more measurable ROI from their gifting efforts.
Reevaluate Your Recipient List
A common gifting strategy is to send something — the same thing — to every customer or every employee. An egalitarian approach, while ostensibly safe, is also a primary reason why so many corporate gifts are yawn-inducing losers.
Companies looking to make more of an impression — and that’s the whole point of gifting, right? — are singling out the most important companies or the most important individuals at a client company or channel partner and sending gifts that are tailored to their interests. Gift-givers are sending higher-value gifts to fewer companies (say the top 20% of customers by revenue) or to fewer individuals at a recipient company.
Personalize by Providing Choice
How do you decide between a box of chocolates or a fruit basket? Is there a right choice? Let recipients choose their gift instead. Cultivate and similar corporate gifting fulfillment companies provide clients with an easy way for gift recipients to select a gift from an assortment of merchandise in a certain price range. Recipients of a Cultivate gift, for example, have as many as 60 items to select from on an online platform, including sporting goods, housewares, electronics and fashion items.
Gift cards are another way to provide recipients with choice. Tango, a division of the gift card behemoth Blackhawk Network, offers a platform to send gift recipients an e-gift card or a catalog of gift cards to select from.
Think Outside the Holiday Season
Aside from milestone anniversaries, the year-end holiday season is the most common time to send gifts to clients, business partners and employees. Gift-givers can stand out, however, if they choose another time of year to send a gift. A company can give a gift to mark the anniversary of a partnership beginning, for example, or on the anniversary of the gift-giver’s founding. (“We’re celebrating a birthday, and we wouldn’t be here without partners like you!”)
“We’re trying to switch the thinking from something you have to do out of obligation to something you want to do,” Romine said. “Instead of treating it as an expense, look at it as more of an investment. If you do it that way, you won’t always choose the holidays to gift.”
Create Multiple Gifting Touchpoints
Cultivate has introduced a service that offers multiple gifting touchpoints to the same recipient throughout the year. The initial gift is a higher price point item and subsequent, less- expensive gifts are sent that tie into the primary gift the recipient selected. If a gift recipient selects a cappuccino maker, for example, they may receive a selection of coffee three months later, a set of cappuccino cups on another date, and accessories for coffee aficionados later in the year. “It’s a neat way to strengthen and increase the connectivity with that person,” Romine said.
A similar approach can be taken when companies provide gifts at corporate functions such as an annual incentive travel event. Companies are increasingly making a significant take- home gift part of these celebrations. By tying a subsequent gift to the original one six months later, a program sponsor extends the ROI of the event itself and can also encourage continued stellar performance so the recipient qualifies for the next trip.
Establish Some System to Measure ROI
The ultimate purpose of corporate gifting is to strengthen business relationships to reap financial gains in the medium and long term. The approach, however, is more subtle. It’s certainly not transactional. Thus, measuring ROI of corporate gifting can be challenging.
In a 2021 research completed by Coresight Research discovered that companies that use corporate gifts identified the top three benefits as improving the relationship with a customer or employee; making the recipient feel valued; and improving employee productivity. Each of those is difficult to measure as a direct result of giving a gift, but Romine said some assessment of a gift’s impact is possible.
“We’re not there yet in terms of pulling hard data on ROI. Companies should be thoughtful and try to measure where the relationships are in six months,” he said. “If you’re giving gifts in a quality-over-quantity way — in a thoughtful vs. a check-the-box way — I think you can lean into assessing how those relationships are going.”
Each of these tips should help companies reach their objectives for investing in corporate gifts. Some objectives may be measurable, but others are more intangible. The most important rule of corporate gift-giving may be akin to the Hippocratic oath: First, do no harm.
There are horror stories of companies displaying cultural insensitivity through their gift choice. This reinforces the importance of knowing as much as possible about your recipients. Blunders often occur when a company takes a lazy, one-size-fits-all approach to gift-giving.
In a post-COVID world with fewer in-person meetings, fewer telephone conversations and less personal contact in general, corporate gifts can play a vital role in maintaining a human element to business relationships. Many of your competitors most likely also do it. The best value comes from doing it better than them.
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