By Kathleen Allardyce and Alexandra Loos, SPHR🔹
Giving gifts to clients is a thoughtful way to nurture relationships, express appreciation, and solidify business connections. However, ensuring that your gifts are well-received, appropriate, and in line with your brand's values is crucial to a successful gifting strategy.
Customers who are emotionally connected to your business are the most loyal and they tend to spend more. These customers can add up to 5% to your revenue. Thoughtful gift giving can have a big impact on how emotionally connected your customers become. Here are some strategies to keep in mind.
Set a Gift Giving Budget
It’s fun to think of unusual and expensive gifts, but it’s important to set a budget that aligns with your business’s financial health. You may think of giving gifts only around the holidays, but there are other times when gift giving can be an effective way to grow a relationship. Consider things such as:
Birthdays
Welcome gifts for new customers
Gifts to celebrate anniversaries for long-time customers
Gifts to congratulate customers for winning an award or milestone
Gifts to encourage prospects to become customers, often given after the first meeting with a key decision-maker
Tip: Decide when you will give gifts and to whom and set a budget that you stick to. If you are on a tight budget, keep an eye out for Black Friday or Cyber Monday deals!
Comply with Your Customers’ Policies for Receiving Gifts
Some organizations don’t allow employees to accept gifts from companies they work with. This is especially true for Government employees, and large corporations may have rigid guidelines restricting their employees from accepting gifts that exceed a specific value.
Tip: Check whether your customers can accept gifts before sending something that will put them in an awkward position. If you’d prefer not to ask your customer, human resource departments typically share that type of information.
Know the Tax Implications for Your Business
The IRS allows a deduction of $25 per recipient for business gifts. Therefore, any amount over $25 is not deductible. If you plan to give more valuable gifts, be aware that they won't be fully deductible at tax time.
Tip: Consult your tax accountant if you need guidance.
Personalize Gifts Whenever Possible
If you have a long customer gift list, it may not be possible to personalize each gift. But, whenever you can, consider the recipient's interests, preferences, or needs to make the gift extra special. For example, if your customer is a foodie, a gift certificate to a top restaurant will be well received.
Bad gifts can make the customer resentful rather than appreciative. For example, you’d want to avoid sending a bottle of wine to someone who doesn’t drink, or sweet treats to someone who is trying to watch their diet. If you can’t personalize, make sure to choose gifts that are practical and useful.
Tip: Reviewing a list of the gifts you gave to each client in the past can spark ideas for this year’s gift.
Choosing Expensive Gifts
Many people assume that they need to give expensive gifts because they think their customers will value them more. According to recent research, that isn’t true. What the research found was that givers focused more on the cost of a gift, whereas recipients focused more on the thought. The old adage, “It’s the thought that counts” is really true.
Tip: Select gifts that are practical and useful; don’t get caught up in the theory that expensive is better.
Choosing Practical and Useful Gifts
Don’t assume that there are gifts that everyone will like. For example, gift baskets filled with different types of food can be problematic given that many people won’t find things that support their diet, or their dietary restrictions may make the basket less than welcome.
Think about practical gifts that your customers will use regularly and that will remind them of you. High quality kitchen knives are a luxury many don’t buy for themselves. Or consider a charcuterie board engraved with the customer’s name. A desk clock, unique travel coffee mug, or a tote bag celebrating your city are other examples.
Tip: Practical and useful can be some of the most valued gifts.
Choosing Eco-Friendly Gifts
Selecting eco-friendly gifts is a great way to show that you care about the environment while boosting your brand's reputation. Reusable items like water bottles, bags made from repurposed materials, or sustainable office supplies are environmentally conscious and practical.
Tip: When sending gift baskets to your clients, opt for a company that offers eco-friendly products and uses eco-friendly packaging.
Choosing Gifts That Support Small Businesses
Gifts from your local small businesses can make your gift feel more personal. You might even be able to source gifts from your own customers to further help cement your relationship. In addition, gifts from small businesses often have a lower carbon footprint than those that come from large factories in distant locations. It’s another way to stay eco-friendly.
Start by visiting small businesses that might be providers.
Do you have an oil or spice shop in your area? Do they have gift cards or subscriptions for periodic deliveries of select products?
What about a small coffee shop. You could give a gift card to the shop and a bag of their coffee beans, if you know your customer drinks coffee. You might also need to include a coffee bean grinder in case your customer doesn’t have one.
If you have a favorite dinner or desert spot in the area, give a gift card for both for a great night out to your customers with a sweet tooth. Your customers may thank you for introducing them to locations they’ve never tried.
Local artists are another treasure. They can supply art that represents your area or supply unique home décor.
Tip: Look for gift providers within your customer base. You’ll get the gifts you need and establish closer ties to your provider/customer.
Choosing a Gift that Advertises
The message here is just “don’t do it.” There’s a difference between a gift and an advertisement for your business. If anything, gifts should have your customer’s name on them, not yours. A gift with the recipient’s name on it, such as a cheese board with the name burned into it, will be valued and displayed proudly. If you’re sending to a couple, however, make sure to use first names, or confirm whether the spouses share the same last name!
Tip: Don’t put your company’s logo on gifts. Save that for advertising promotional materials.
Timing Is Everything
As we mentioned, while the holiday season is a popular time for gift-giving, surprising someone with a gift at unexpected moments can make an even greater impression.
Tip: Send out your holiday gifts in early December. This way, your clients will receive your treats first!
Conclusion
When it comes to gifting in business, it's all about nurturing relationships and showing appreciation. Send thoughtful gifts on time, within budget, and in line with your clients' policies. And remember to stay on top of the tax implications for your business!
This article was written in the true Cove collaboration spirit. Alexandra Loos and Kathleen Allardyce worked together to prepare it.
About the Authors
Kathleen Allardyce is a freelance writer who serves forward-thinking companies that want to use effective content marketing to increase leads, convert leads to customers, and grow their business.
Alexandra Loos, SHHR co-founded Cove.eco, an online community for business owners, in 2023. She owns Scalable Business Hub and provides virtual accounting and business solutions to small businesses and startups.
