In ASI’s most recent Corporate Gift Giving survey of more than 470 companies, there was some alarming news for distributors regarding one particular area of business: customer gifting.

Over the past two years, the percentage of responding firms that engage in this practice has dropped from 42% to 32%. This means that nearly seven in 10 companies are unconvinced that customer gifting adds sufficient value to their sales function, so they choose not to partake.

But with the economy particularly strong right now, distributors certainly should not consider customer gifting programs hopelessly beyond their grasp. If distributors can make the case to their clients that well-conceived, well-timed, customer-gifting programs strengthen business relationships at a reasonable cost, they should find good opportunity in this market segment. Here’s how distributors can make that case, and then fulfill customer-gifting programs in a way that delivers maximum impact.

Getting Back to Yes
It wasn’t that long ago that customer gifting was a widespread practice. “I did a lot more gifting programs before 2009,” says Tia Walker, account executive for BrandAlliance (asi/141964) in Allen, TX. “I think when the cycle was broken by a bad economy, it became tough to get clients back to that mindset.”

“Once companies didn’t do gifting for two or three years and felt it didn’t damage the customer relationship, many of them figured they didn’t have to return to it,” adds Teresa Moisant, president of Moisant Promotional Products (asi/275276) in Oklahoma City, OK. But such a mindset is reactive rather than proactive, and leaves a company vulnerable to being replaced as a preferred vendor. “I don’t see corporate gifting happening as often as I should,” says Bob Croston, principal consultant for RAIN Group, a Boston-based sales consulting firm. “We hear from our clients all the time that it’s getting more competitive in their industry and they need to distinguish themselves. Well, a meaningful gift could make a big difference to a customer.”

“I routinely remind our clients that it’s much easier – and less expensive – to keep an existing customer happy than to get them back once you’ve lost them.”Richard Berger, Th!nk Promotional Group

From a bottom-line perspective, strategic gifting simply makes sense. “The number-one reason companies lose a client isn’t price or product quality,” Walker notes. “You lose a client because of neglect – they don’t feel like they’re important to you.” Richard Berger, owner of Th!nk Promotional Group in Raleigh, NC, says “I routinely remind our clients that it’s much easier – and less expensive – to keep an existing customer happy than to get them back once you’ve lost them, or to find another customer to replace them.”

Even if a distributor persuades some clients that a customer-gifting program is right for them, there might be another hurdle to overcome: convincing clients you’re the right source for those gifts. Doug Chorpenning, founder of Wet Paint Group (asi/225354) in Centennial, CO, specializes in providing gifts for corporate events, both customer-focused and employee-focused, such as incentive travel programs. He notes, “the value proposition we put forth to clients is that we really lean into the creative part of the equation. Distributors might have to emphasize that element, because there are higher expectations for gifts and more pressure for some type of ROI.”

To put it more bluntly: “Maybe some clients don’t think their promotional products supplier is the right one to fulfill a gifting program,” says John Crisci, president of Global Gifting (asi/590330) in San Diego. “Gifts aren’t seen the same way as the products companies use to appeal to the masses for marketing purposes.”

ASI’s Corporate Gift Giving survey found the median cost of a customer gift is $24 (meaning half of customer gifts cost less than that, while half cost more), so it’s clear that gift quality isn’t perceived as simply a function of high price. “A gift that demonstrates a company pays attention to the people it does business with – not just the orders they get from them – is a winner,” says BrandAlliance’s Walker.

Think Differently
One survey result that’s been trending consistently lower since 2015 is the number of companies who spend more on gifts for their larger customers versus their smaller customers. In the most recent ASI gift-giving survey, just 35% of responding firms with gift programs use tiered gifting based on a customer’s business value. (That figure was 45% just two years prior.)

Consider connectivity items like the Nest video doorbell system, or Amazon’s Alexa, says Allyson Krichman, senior director of the product sales group at Brainstorm Logistics (asi/41515). “Trusted brands like LG and Sony are using more Smart technology and sharing in the connectivity craze, so they continue to be among the most desirable brands,” she says. Also, Michael Kors Access watches are the top trend at retail, since they offer the benefits of connectivity with the look of runway fashion, and Motiv offers a fitness and sleep tracker in the form of a stylish ring.”

Food and calendars are historically the most popular gifts for clients and prospects. Desk accessories made big gains in 2017 (a 13% increase compared to the previous year) while electronics have fallen by 11% the past two years. Click here for a larger image of the above graphic.

Distributors who offer different gifts for key customers suggest the strategy can yield substantial business results over time. For example, a percentage increase in business from a large account would represent considerably more revenue to a firm that gives a gift versus that same percentage increase coming from a smaller account. Even simply maintaining the present volume of business coming from large customers partly because of their appreciation for a gift makes tiered gifting a worthwhile endeavor.

For several years, Walker advised on and fulfilled a three-tiered customer-gifting program for a commercial construction company during the holiday season. “In a good year, they would do 150 gifts in total, and in a slow year they would do about 90 gifts,” she recalls. In the first tier, the price point was $12 to $15 per item. “These gifts were intended to touch a lot of people to express appreciation, and keep my client’s name in their minds into the new year,” Walker says. Products included quality drinkware that matched the customers’ lifestyles as well as handy multi-tool kits.

For the middle tier and its $25 to $40 price point, “we would find interesting food items or baskets that could be shared by an entire department,” she notes. “Those gifts create a positive moment in a lot of offices.” One caveat: The accompanying card should be placed inside the packaging and make clear which firm gave the gift, especially at a time of year when various gifts might arrive in an office.

Lastly, for the upper tier and its $50 to $70 range, Walker was instructed to target specific decision-makers among the firm’s best accounts. One year, she used coolers that were packed with food and tailgating/grilling accessories; another year she used steak-knife sets; and another year she used leather padfolios along with a tech item like a power bank or wireless speakers.

For all the gifts in the construction company’s program, though, Walker made sure the branding elements were subtle. “Creating classy presentation elements for gifts in any tier makes a big difference in impact,” she says. For this client, “we didn’t just sell our client the items – we created higher-end retail packaging along with romance cards, and drop-shipped to each customer.”

Krichman says personalization can drive sales as well. “Think about the needs of the recipients,” she says. “If you have the ability to provide something that suits their preferences, or better yet, a choice of options, it will make a bigger impact. Find products or items that someone would aspire to want that can be gifted. They’ll resonate long after they’ve been received.”

Remember, decision-makers can change, and it’s best to build connections before that happens. For example, with certain clients, Moisant gives custom gifts not only to the decision-maker she deals with, but also to the other employees in that department. “When I worked for Revlon many years ago, they made me write in my reports the name of at least one other person I met on each sales call, and they would add that person to their gift list,” she says. “With my major accounts, I do personalized pens for everyone in marketing because I don’t know which person might be promoted if my buyer leaves. I’ve recently seen a few of my longtime contacts retire, and my peripheral contacts in those firms have taken over the buying duties, and I’m already a known and reputable entity with them.”

“I don’t see corporate gifting happening as often as I should.”Bob Croston, RAIN Group

A client’s most important customers should be earmarked for the upper-tier gifts, though it doesn’t have to be a standard item, says Global Gifting’s Crisci. “Rather than give a common tech toy many recipients might already have, a $75 or $100 gift card to Starbucks or similar outlet would likely be appreciated more,” he says. “The recipient will use it more than once, and maybe use it to treat other people, too. This type of gift might not seem as impactful, but it definitely can be if the accompanying message is relevant to the recipient.”

In fact, messaging could turn out to be the most influential element of a gifting program, which is why distributors need to ask about the connection points that exist between giver and recipient. “Wherever there’s a shared experience or situational knowledge of a customer, we encourage our client to focus on that to deepen the impression,” says Croston of RAIN Group. “Even a fruit basket can be meaningful if you connect the message to something specific you know about that customer.” Crisci adds, “If nothing else, the message accompanying a gift should connect to the client’s mission, or their customers’ missions.”

One mission that resonates with many businesses is corporate social responsibility (CSR), and this element can be leveraged through gifts in two ways. First: “A lot of brands we use have a built-in charitable-giveback component,” Chorpenning says. For instance, Revo sunglasses contributes a percentage of revenue from every unit purchased to pay for eye exams in developing nations. “If you put a hang tag or a card in each gift box that mentions such a program,” says Chorpenning, “it’s going to add impact to the gift.”

Second, the client could make donations to charitable organizations in the name of specific customers, and send those customers a card explaining the cause that will benefit. Knowing in advance which cause each customer presently supports would strengthen the impression of such a gift. “It proves you are listening to them,” Chorpenning says.

Another way a company can maximize the impression it makes with customer gifts is to send them at a time other than the holiday season. In fact, Moisant’s company does that – though they do send their primary contact at each client firm a Christmas/holiday card that expresses appreciation for their business, and includes a teaser announcement regarding a gift that will come a few weeks after the holidays. “When it’s the dead of winter and there’s nothing going on, a gift that comes to an office is definitely remembered more,” she says. Other opportunities for unexpected gifting include St. Patrick’s Day, Cinco de Mayo, Independence Day and even less formal observances such as Groundhog Day and National Doughnut Day (the first Friday in June).

Chorpenning once got a head start on other companies who send gifts in the holiday season by using Halloween as a gifting moment. He and his staff carved 15 medium-sized pumpkins and filled them with candy, including several items from Hammond’s, a high-end candy company near his Colorado office. He then shipped the pumpkins via FedEx to the firm’s top clients. “We wanted to show a bit of creativity and boldness in order to stand out,” he notes. It worked. “You would not believe how many calls I got once those things arrived.”

Besides demonstrating a company’s appreciation for and understanding of a customer, additional customer interactions make up much of the ROI component for a strategic gifting program. “I don’t know if you can measure exactly in dollars and cents the return you’ll get, but gift programs provide more opportunities for customers to make contact, or for a company to follow up with customers,” says Walker. “It could accelerate the sales cycle, or at least ensure customers will take your call.”

A Program That Keeps On Gifting

When one of his clients sought a way to generate more frequent engagement with their customers, Richard Berger, owner of Th!nk Promotional Group in Raleigh, NC, developed an ongoing gifting program based on customer behaviors other than just purchasing.

First, Berger produced custom poker chips for the client to distribute as currency to its customers. “The client then sent each customer an initial allotment of chips, and sends more out for reasons such as purchases, referrals and other actions, and even as a bonus for different holidays,” he says. The tokens can be exchanged for high-end custom items such as Yeti coolers and Bose speakers from Th!nk’s fulfillment center. The firm produces a digital catalog that goes to all clients each month so they can see the available products and decide whether to exchange their present stash for a gift, or continue saving their chips.

“Our client loves how the simple act of sending the chips encourages regular dialogue with customers and prospects,” Berger says. “They also appreciate the fact that their customers keep the chips at their desk for several months at a time. It gives customers incentive to earn more chips for items they want while keeping our client top of mind, especially when the digital catalog arrives each month.” The result: “The client has already gotten a lot of mileage out of the program, and the final gifts still haven’t been given yet.”

Rob Carey is a contributing writer for Advantages.