Is ROI overrated?
In a business environment that is consumed with tracking, measuring, A/B testing and finding metrics for every metric, there remain business investments that are made simply because it’s the right way to run a company.
Corporate gifting is one of those. We sounded out dozens of business leaders for this report and, while all agreed that corporate gifting is an important long-term strategy for companies, not one claimed to have a formula for measuring the return on investment.
“For us, gifting is less about immediate ROI, and more about reinforcing long-term loyalty,” said David Wurst, owner of WebCitz, a digital marketing agency. “A well-timed gift, whether it’s a cheese and sausage box or a branded coaster, keeps our company top-of-mind during the quieter months when other companies may not be reaching out.”
“I don’t look at corporate gifting as something that can be measured in terms of ROI,” added Rose Molz, co-founder and president of EZ Office Products. “We do it because we want to give customers a surprise that day.”
EZ Office Products is headquartered in Madison, Wisconsin. The company has 14 employees, six of whom deliver products by truck every day to customers throughout Wisconsin.
Customers range from mom-and-pop businesses to national and international corporations.
This summer, Molz purchased 300 ears of corn from a local farm, bagged four each in burlap sacks, and had her delivery drivers hand them out as they made their runs. When they were gone, they were gone. Last summer, she did the same with soft pretzels that were sourced from a favorite Philadelphia vendor in homage to her husband’s hometown. (He doubles as her business partner.)
What’s the long game? For starters, Molz said she simply likes sweet corn and soft pretzels (with yellow mustard), and she thought her customers would, too. She trusts there is a business return to her gifting, but she’s not overly concerned about measuring it. Molz said positive feedback from customers rolls in from the delivery drivers at the end of the day.
And speaking of trust, Molz doesn’t handpick which customers her delivery drivers should give the gifts to. Whoever is on the route on the day she hands over the gifts will be the lucky recipients. “Every customer is valuable to us,” she explained.
Huge and Getting Huger
Despite its nebulous ROI, the annual spend on corporate gifting is massive. Estimates put it at more than $765 billion annually worldwide and over $300 billion in the U.S. The category includes everything from low-cost, branded swag like pens, tablets and T-shirts, to high-end food baskets, tickets to live entertainment and even travel.
To put that expenditure in perspective, it’s estimated that U.S. companies invested $109 billion in 2024 on AI, $212 billion on cybersecurity and $325 billion on digital advertising.
Reasons for corporate gifting include building brand image, boosting employee morale and loyalty, nurturing customer relationships, opening doors with prospects, and expressing thanks for business. A sizable percentage of corporate gifting has always been done at the holidays and end of the year, but many companies are pivoting from that practice so their efforts are not lost in the clutter.
This summer, a global insurance company reached out to Cultivate, a Boulder, Colorado-based company that provides an online gifting platform, with a desire to give 11,000 of its independent insurance agents a thank-you gift. Tom Romine, founder and CEO of Cultivate, said the company previously gave these reps a gift card to the insurance company’s branded merchandise store, where they could select apparel, office products or other goods with the insurance company’s logo on it.
An executive at the client company told Romine they wanted to do something different, namely, recognize these reps’ efforts with a gift that each recipient truly wanted. The budget was about $50 per recipient plus shipping and taxes.
Selecting a single gift for 11,000 sales reps would undoubtedly miss the mark with many of them. Using Cultivate’s online platform, each recipient was able to select an item from a collection of about 50 options that the Cultivate team had created specifically for this client’s program.
The gifting program for 11,000 independent reps was developed and launched within a week. Response, Romine said, was immediate. Cultivate’s platform invites recipients to respond instantly with a thank-you to the gift-giver. Romine said about 80% do, often sharing what they selected and how grateful they are to have been able to choose it.
Making It Personal
Choosing the right gift for a sibling, friend or child’s birthday can be stressful and seemingly a crapshoot. Imagine, then, choosing a gift for hundreds or thousands of employees, customers or other business associates.
Gift cards are a popular corporate gift option — as they are for people’s personal gifting occasions — because they provide the recipient more choice. Also, gift cards are easy to deliver to multiple recipients, can be sourced on short notice and, when purchased in bulk, often come at a discount to their stored value. The Incentive Research Foundation estimates more than
$24 billion is spent annually on corporate gift cards.
No matter the gift, experts emphasize personalizing in some fashion is essential to make a lasting impact.
“Companies are looking for a competitive advantage; being the sender of a gift that has the recipient’s name, logo and personalized message is going to stand out a lot more than a generic gift card,” said Gavin Paye, head of marketing at Virginia Hayward Ltd., a UK-based company specializing in creating luxury food and wine hampers. “I still remember the handwritten note attached to a bottle of whisky I received from a supplier 24 years ago — and I still buy from them.”
Closely tied to personalization is presentation. Jerina Vincent, founder of JNJ Gifts and More, a corporate gifts supplier, said investing a little extra in packaging produces a big payoff on first impression and memorability. JNJ Gifts works with a custom packaging company to tailor make boxes that fit the gift.
“It’s not just the taste or the quality. Presentation is what makes our company unique. It all plays a part in gifting. That’s how recipients remember getting something for a long time,” Vincent said.
Designate a ‘CGO’ – Chief Gifting Officer
Business endeavors that get similar-sized budgets as corporate gifting receives at many companies typically designate someone to oversee how the budget is spent and what results that expense is producing. While it’s true it can be challenging to measure the real return on business gifting, it’s also true that any endeavor that receives that sort of budget should be highly scrutinized.
Gifting should be done methodically and led by an individual or a team that understands best practices, helps shape an overall objective, and develops some means of measuring success.
“No one we speak with has a title of ‘chief gifting officer’ or ‘head of gifts,’ or even ‘gift manager,’” said Cultivate’s Tom Romine. “There’s a great opportunity for companies to take the dollars they already spend [on gifts] and pause to ask, ‘What am I trying to do here? What are the net results? Do I want to make an impact with this?’ If you do that, you’re going to end up in a good place. If you’re just trying to solve for ease and speed, that’s where you’re going to get into trouble.”
Romine said his company often works with sales managers because gifts are frequently used with clients or sales reps. HR professionals are another common position that Cultivate reps work with. Romine said it’s unlikely that a full-time employee will ever be devoted to developing corporate gifting strategies, but the role shouldn’t be handed off willy-nilly each time a gift program is initiated.
The head of gifting at a company should keep copious notes regarding each program’s objectives, structure, outside partners assisting with the program, and how success is measured.
Recording these aspects clarifies what to monitor and measure. If the program is deemed successful, having the strategy in writing makes it easier to repeat the steps with future gifting efforts.
Molz said she has three key rules when creating a gifting moment for her EZ Office Products customers: Give something unexpected (like four ears of corn), don’t expect anything in return and, whenever possible, buy local — it helps you steer clear of the cliché and often makes the gift more meaningful.
Molz trains her team to ask, “If I were the customer…” as a guide before sending emails, making good on a misstep or taking almost any other action. It works wonderfully as a corporate gifting guidepost, she said.
