It's that time of year when many companies put a little something under the tree for their clients – a seasonal gesture of thanks for their patronage in the past year.
Even in an economy that's still recovering from the last recession, businesses continue to treat their customers to the occasional gift. In a survey last year by Incentive magazine, a publication that tracks incentive programs, more than 70 per cent of U.S. companies said they were giving gifts to customers – about 5 per cent higher than survey results from the previous year.
"A gift to a client is really a tangible way of expressing your gratitude for their involvement and assistance," says Linda Allan, a business etiquette and management consultant in Toronto
For small businesses with relatively limited budgets and little time to devote to holiday shopping, the idea of giving gifts to clients can turn into a game of 20 Questions. Should they buy presents for all or just some clients? What should they give? How much should they spend? Is it appropriate to put a logo on gifts?
Is this whole client gifting thing even a good idea in the first place?
"It can be overwhelming when you start to look at all these different considerations," says Cathy DeSerranno, shopping consultant at First Canadian Place, a retail and commercial tower in the heart of Toronto's financial district. "I think that's why many of the small business owners I've helped over the years are usually quite anxious about getting gifts for their clients."
Gift-giving doesn't have to be overwhelming, however. In fact, with fewer clients and closer business relationships, small operations have an advantage when it comes to figuring out what presents will appeal to their customers and stand out from the branded coffee mugs or water bottles, says Ms. DeSerrano.
The disadvantage? Small enterprises also have less money to spend on gifts. Jody Steinhauer, founder of Bargains Group, a Toronto-based national promotional products company and clothing wholesaler, says her small business customers typically have a Christmas holiday client gift budget of between $500 to $1,000. Mid-sized companies, by comparison, spend about $3,000 on December presents for clients.
"But you don't have to spend a lot to wow and stand out," she says. "Get something personal and practical and package it nicely."
As an example, Ms. Steinhauer points to a hot item this year among shoppers looking for a corporate gift: a European scarf that retails for about $50 but is going for $6 at Bargains Group.
"Put a ribbon around it and, for under two bucks, get a really cute tote bag to put it into," she says. "For under 10 bucks you can give a client an amazing gift."
And should this amazing gift be emblazoned with the company logo? Ms. Steinhauer recommends keeping the company brand off. If you must, put it somewhere on the packaging, like the ribbon or the carrying bag. But keep it small and discreetly placed.
"Or go with a tone-on-tone logo so it's not jumping out," suggests Juliette Sale, creative director at Idea Incentives Inc., a Vancouver company that specializes in made-in-Canada gifts. "You can also put your logo on the card you're enclosing with your gift, that way they'll remember it's from you."
When it comes to figuring out how much to spend on each gift, Ms. Sale says she always asks her small business clients to set a budget and then decide how many clients will receive a gift.
"This narrows their choices right away," she says.
While there's no perfect formula for determining which clients get a gift and which get a card, following the 10 per cent rule can help keep the number of gift recipients to a reasonable limit, says Ms. Allan in Toronto. Simply explained, if you have 100 clients, buy gifts for 10 of them.
Businesses can also turn to hard data to take a more measured and methodical approach gift buying for clients. Lori Bieda, executive lead for customer intelligence at data analytics firm SAS Americas, suggests analyzing customer and financial data to identify their value, based on such metrics as how much revenue, profit and referrals each client has brought to the business, and how much more they're likely to bring in the future.
This information makes it easier for small businesses to decide which clients to put on their gift list, and how much to spend based on each client's value to the company. An analysis of customer preferences and buying behaviour might even provide clues about what to buy for certain clients, says Ms. Bieda.
"It's not uncommon in business-to-business databases to have notes about customers' preferences – for example, there might be a note about one client being a foodie, or liking golf," she says. "The more you apply this information in the context of gift giving, the more relevant your gift will be, and the more your clients will be delighted by your gift."
Ms. Allan cautions small business owners – or any corporate gift giver for that matter – to be mindful of whether or not their gift might be seen as an attempt to buy future business from their clients, or might contravene the recipient company's rules on receiving gifts.
Many large companies today don't allow employees to receive gifts worth more than around $150 a year. Most government departments don't allow any gifts at all, including lunches or dinners.
"Always do your due diligence, so you don't end up over giving and putting your client in an awkward position," says Ms. Allan. "Check online for the company's code of conduct, or ask someone – such as an executive assistant – what the guidelines are for gift giving and receiving in the company."
For clients who can't take gifts, Ms. Steinhauer at Bargains Group suggests a donation to charity, with a card sent to clients telling them you've made the charitable gift in their name.
Absolutely no marketing or sales pitch with your gift, says Ms. Allan.
"The goal of your gift to your client should not be to retain that customer or to get more business," she says. "You should be doing your marketing and treating your client well all year around."
The do's and don'ts of giving gifts to your clients
- Check rules for receiving gifts.
- Include a hand written card with your present.
- Deliver your present in person – but don’t ask for a meeting, just drop it off.
- Find out about dietary or lifestyle restrictions, such as gluten allergies or alcohol avoidance.
- Stamp conspicuous logos on your gift.
- Give gifts of different values to various people in the same company.
- Deliver a marketing pitch along with your gift.
- Give something that requires special care, such as plants or fish in a bowl.
- Expect something in return.