The Art and Science of Corporate Gifting

• Definition
• Reasons and Timing for Gifting
• Return on Investment
• Gifts Vs. Incentives and Recognition
• The Importance of Strategy 
• The Ethics of Gift-Giving
• The Etiquette of Giving
• What to Give
• Where to Buy
• Corporate Gift Applications

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Definition

Reasons and Timing for Gifting

• The employees who do the toughest, most menial jobs, who get the least credit and who appreciate more than anyone a thoughtful and meaningful express of thanks. To people of little financial means, but really to anyone, a pat on the back and a merry thanks is always appreciated, but after long periods it rings hollow, especially when it comes to business relationships.
• Customers in both B to B and B to C and who support your organization’s efforts year after year, and the best timing for that is not at the holidays but at business or their anniversaries that demonstrate your relationship. 
• Event gifting, including room and table gifts, as well as event-gifting experiences. 
• Board members who often give up a lot of time with no expectation of anything in return. 

Return on Investment 

Gifts Vs. Incentives and Recognition

The Importance of Strategy

The Ethics of Giving

• Giving gifts during a bidding process is a definite no-no. If a holiday happens to fall during this time, great care should be given as to if and how it would be presented on a case-by-case situation.
• Remember that the IRS lets companies deduct a business gift valued at up to $25 plus incidental customization and personalization fees; 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.
• The use of “customer councils,” which might include travel to a desirable destination that includes memorable experiences, is discussed below. Tax treatment of gifts related to travel to meetings are governed by a different set of rules related to the primary purpose of the event. Knowledgeable tax advisors should be consulted.

The Etiquette of Giving

What to Give

• Food items are very popular as corporate gifts. They tie in well to many holidays and can be taken home and enjoyed with friends and family. But sometimes gourmet baskets take on a generic aspect. Many of them get no farther than the receptionist, to be picked apart by various office personnel passing through. If you want to win hearts and minds through the stomach, try to be creative and thoughtful. It’s all very well to consider giving those tender mail-order filet mignons; just make sure your recipient isn’t a vegetarian.
• Liquor and wine are old favorites, but hard liquor has lost some of its popularity. Despite the stigma associated with liquor in the business world, however, it’s essential to keep things in perspective. After all, if your client’s pride and joy is her wine cellar or his whiskey collection, what better gift than a fine cabernet or a single malt? Also in the sin department: cigars. A box of the right stogies can make you look impressive in the eyes of a cigar aficionado.
• Office-related items, such as pen sets and desk blotters, are safe bets that reflect practicality and good taste. Be careful, though: A good fountain pen is quite expensive, and a cheap one is tacky. Use caution when considering art prints and other decorative items because taste in office decor is a personal and, for many, strategic consideration.
• Tickets to sporting events and live entertainment often make great gifts. Scarce seats for popular shows and events provide a thrill and can make you a hero in the eyes of a client. Still, you should be sure of your client’s preferences. Just because he mumbles a response when you say, “How ‘bout them Mets!” don’t automatically assume he wants to sit through an afternoon at Citifield. Apart from that, anyone in the financial services or medical professions should be aware of a growing number of government and industry-governed regulations and policies aimed to curtail lavish entertainment and that all entertainment should generally be a byproduct of education and networking and not the other way around.
• Customer councils invite customers and/or distribution partners generally to a desirable destination, with or without significant others, for several days of business and pleasure, with the goal of building more powerful relationships. Generally, to escape tax treatment and perception that the trip is a gift, the on-site program must be at least 50% of business nature and, from a perception point of view, as well.  The best of these programs run for the purposes intended to benefit from an off-site experience, with a clear agenda to create a mutually beneficial learning opportunity for all involved with the goal of improving business practices going forward. 
• Gift cards have much appeal if you want to take much of the guesswork out of giving. They’re available from a wide variety of brands, they offer the recipient freedom of choice and they can be given to all types of people. A big benefit is that some of these cards can be reloadable for long-term wallet power; and both e-cards and card carriers can be easily customized. The only problem is that in most cases the dollar amount is printed on the face, which, for some people, detracts from the feeling that this is a gift with some thought behind it. Some cards do come with points only redemption.
• Word of warning about cash: Unlike with personal gifting, cash is a no-no as a corporate gift, period. It’s uncreative, raises ethical questions and looks like a bribe, no matter what.

Where to Buy

• Retail catalogs or stores provide a good starting point for the small-scale gift-giver but be careful if you’re buying in bulk and need some of the services mentioned above. Many retail gift services aren’t designed for the corporate market. A growing number of department stores and retail catalog companies, however, have corporate departments that offer extensive services and discounts for bulk purchase, so if you plan to buy from one of these companies make sure you deal with the corporate sales department. If you hate to shop but still want to give interesting items, some of the finer department stores have personal shopping services. Many major catalog companies also have gift card and online programs. Recipients receive their cards along with a catalog and Web address in the same mailing. If you go this route, make sure the company has a high-quality 24-hour customer service operation. Test it before making a purchase so your customers don’t run into trouble. Also, remember that the retailer now has a relationship with your customer as well, and that in most cases the redemption process will be at retail, not a site or experience customized with your brand. 
• Direct from the manufacturer. Many large and small manufacturers have Special Markets departments that sell their products to corporations prepared to buy in volume. Almost all these companies belong to the Incentive Marketing Association, which publishes a directory at Incentivemarketing.org.
• Incentive representatives. If your company operates large gift-giving programs, it can buy brand-name items through incentive representatives of leading manufacturers in the business market. These representatives can offer high-volume customers lower prices and help them arrange for fulfillment in bulk or drop-shipped. For a list of incentive representatives in your area, contact the Incentive Manufacturers Representatives Association at Incentivemarketing.org.
• Promotional products distributors. Don’t let the name fool you. Many of these companies can provide a selection of corporate gifts for even the smallest customer. You may pay a little more than if you attempted to buy directly from a brand-name supplier, but a good distributor can provide turnkey services that take most of the headaches out of your program. For a list of distributors, go to PPAI.org or ASICentral.com.  Look for a company that can demonstrate expertise in gift programs.
• Online merchants. The Internet makes it easy to send out customized gift messages and online certificates. Online merchants let you send out e-mail customizable gift certificates and messaging to recipients that they can redeem on their own.
• Incentive companies. Some incentive companies have catalogs that can be used for gift-giving programs. They put merchandise in price categories rather than specifying a specific price. Certificates or cards allow people to redeem at a certain level without knowing the actual price. Caution: You may not get much service if you plan to give only a few gifts. Be honest about your order size when making your inquiries. 

Corporate Gift Applications

• Employee recognition. Many companies don’t use incentives with certain categories of employees for fear of igniting harmful competition within their ranks or because they’re unable to single out an individual’s incremental performance in a clearly measurable way. Instead, companies often give managers a discretionary budget that may be spent on gifts to recognize employees for exceptional behavior. Actions worthy of special recognition include going “above and beyond” to please a customer, taking an exemplary action supportive of the brand, putting in long hours to complete a project on time, making a cost-saving or productivity-enhancing suggestion, or completing a big sale. Some executives would argue that such actions are expected as part of an employee’s job and should be rewarded at performance-review time. Yet, the evidence suggests that carefully timed and appropriate gifts not only make people feel appreciated for their performance, they also increase the chances people will feel good about going the extra mile in the future. When giving gifts for special performance, make sure the gift is appropriate to the employee receiving it, the person and colleagues know why, and the presentation is made in a personal and, if possible, public forum, or publicized on the organization’s communications platform. The recipient and his or her colleagues must know why the gift is being presented. Publicity in the company newsletter, or even an announcement in the lunchroom, ensures that people know the types of behaviors the organization wishes to promote. Gifts are also typically awarded to employees for years of service, as well, although most of these programs need to be recalibrated with the recognition that most employees leave long before five years and older ones certainly do not remain to achieve those milestones. 
• Customers. With today’s increased emphasis on corporate ethics, you need to scrutinize not only the gift and the recipients, but the nature of the presentation. After you’ve determined which clients can accept gifts, think carefully about the gift and how it’s going to be given. If you ship gifts to recipients, you miss an invaluable opportunity to reinforce the relationship between your employees and your customers. On the other, imagine the surprise when your customer gets a surprise gift from a customer service representative that even reflects a personal understanding of who he or she is. 
• Consumers. Merchandise or non-cash awards given to consumers usually fall under the category of premiums or awards associated with sweepstakes and games. The idea is to spur behavior by making an offer. In contrast, gifts reward consumers after the fact, and the aim is to surprise the customer and build long-term loyalty precisely because there is no expectation of doing so through the gift. Thus, the key to using consumer gifts is to have a specific strategy and target customers whose volume you can track over time and to not only expect such loyalty. Example: A supermarket chain wants to increase usage of its preferred-customer card so it can track its customers’ purchase patterns more precisely. It has offered incentives to get people to sign up and use the card, but usage has begun to trail off. As part of its effort to keep up interest in the card, the supermarket sends out a surprise gift with a thank-you letter from the president to all shoppers who have used the card to purchase more than $500 in groceries in a given month.
• Vendors. During the heyday of the total-quality craze in the 1990s, companies recognized the importance of building close relationships with suppliers. The trend continues today, as manufacturers and retailers alike depend upon just-in-time deliveries and companies of all types demand the best service for the lowest price. Despite these concerns, surveys generally show that vendors are among the least likely businesspeople to receive gifts. If your company depends on excellent service from a few vendors, you may be surprised by the long-term impact of sending a few gifts – not only to your customer service representative, but, if possible, to the people who do the work. Trade show contractors have long known the value of providing gifts to the convention center labor teams before the event, which conveys faith that they will do a great job. 
• The media. Most daily newspapers and many consumer magazines have strict policies about giving gifts to editors and reporters, but they’re often overlooked if the gift is simple, tasteful and appropriately timed so it doesn’t look like a bribe. A very small, imaginative gift related to your message sent with a press release will increase the chances of your message being read, and that could translate into coverage if the story is right. Be wary of sending gifts to consumer journalists whom you or your public relations people do not know personally. The gift could backfire by creating the wrong impression.
• Government officials. Many businesses depend upon good working relations with government regulatory bodies or town officials. When regulatory officials or politicians are involved, proceed with caution! However, when it’s a question of municipal workers who perform services such as trash pickup for your business, a special gift at holiday time often earns a year’s worth of more attentive service.