We have exciting news to share! Earlier this month, we were mentioned in Forbes for our recent business findings. Our founder, Laura Jennings, shared key insights from Knack’s 2019 Business Gift Satisfaction Report.
To no surprise, knowing what business gifts to give and how much to spend can support – or hurt – business growth.
We decided to publish these findings to not only better our own practices, but to help like-minded individuals that are planning to give this holiday season. Read the full article below to discover the intricacies of business gifting.
It’s that time of year when every man and woman starts to think about gifts to give, and in the case of children, gifts to receive. It’s the same for people in business. They know the value of business gifting, as fellow Forbes.com contributor Ian Altman makes clear, “It’s always a good idea to show clients your gratitude.”
A new study from Knack, a bespoke gifting company based in Seattle, goes deep into the strategy of business gifting based upon a survey of more than 1,000 people who received a business gift from a business partner or employer within the last year.
The “Miss Manners” of business gifting, Knack founder Laura Jennings says there is an etiquette of business gifting, which her company discovered by surveying the people that really matter – the recipients.
“While there are many places to find information about what companies plan to give as gifts, no one was looking at this enormous $125 billion market through the eyes of the recipients of those gifts,” she states. “Only through understanding the attitudes, expectations and experiences of the recipients would it be possible to maximize the experience for business gift recipients, while advancing the objectives of the companies sending all those gifts,” she adds.
This study, the Business Gift Satisfaction Survey, fills the gap and shows that knowing what business gifts to give and how much to spend can support – or hurt – business growth. Specifically, some 57% of respondents said that “gifts can impact their opinion of a business partner both positively and negatively,” so every business needs to focus on the former and avoid the later.
Of note, this study focuses specifically on business gifts given to clients, partners and non-employees. Knack will follow with a study of employee gifting.
The Ends Justify the Means
The market for non-cash business gifts is estimated to total $125 billion, the report reveals. That is a staggering number, comparable to the state of Arkansas’ GDP in 2017 and bigger than 16 other states’ GDP as well.
Detailing the return-on-investment for a business gift, Jennings reveals that C-suite executives are especially impacted by a gift that tells a story and facilitates a deeper personal connection, which 94% of top executives believe is important to business success. Over 80% of C-suite executives believe that business gifts generate measurable positive ROI in addition to intangible benefits. “Gifts humanize business,” said a survey respondent. “It pays for itself two fold,” said another.
How Much is Enough?
When it comes to setting a budget for business gifts, the survey finds that the right amount to spend per gift is between $50 to $150, with gifts intended for C-suite, VPs and one’s most valuable clients skewing toward the higher end of the spectrum and those for others trending toward the lower end.
Jennings notes that with the exception of gift cards – which she thinks are not a good choice – people can only estimate the value of a business gift, but the proper range for a gift depends on their organizational level and importance of the business relationship.
“This is why is it important to think about quality rather than quantity when selecting business gifts,” she adds. “Whatever you give, make it the best example of its kind. People associate gifts with a level of luxury they might not ordinarily splurge on for themselves.”
Chefs know that people taste with their eyes first, so that dictates how artfully they present their creations on the plate. So too with a gift. A beautifully wrapped and packaged gift gets the business gift recipient’s juices flowing. “The quality of the unboxing experience sends a strong signal to the recipient about the value of the items within,” Jennings stresses.
“Don’t skimp on this essential part of the gifting process because doing so will devalue the items contained within,” she says.
Say “No” to Logos
A meaningful or—more appropriately—a meaning-filled business gift can have a profound influence on the recipient’s feelings about the gifter and the gifter’s company, either positively or negatively.
Gifts that include company logos are the least desired of business gifts, making recipients feel less than appreciated and resulting in lower levels of satisfaction. One respondent said, “I enjoy buying & giving business gifts. I enjoy getting them, too. Having said that, I have far too many pieces of (#$($* with my employer’s logo on them.”
Jennings explains, “The era of sending company-logo’ed business gifts is waning as recipients perceive items with logos as marketing collateral, not gifts. Companies may feel compelled to put their logo on gifts so that the recipients ‘will remember them,’ but ironically the data shows just the opposite.” A logo gift screams “Think about me and my company,” not “How much I think about you,” which is what a good business gift should communicate.
That is also why a gift card is not a particularly good gift choice either.
While it remains a gift choice that 71% of recipients appreciate, it fails in being memorable and personal. “Gift cards continue to be a safe choice for almost everyone, but they no longer generate the memorability that strengthens personal connections,” Jennings explains and adds, “the data shows that gift cards are quickly forgotten by recipients.”
Make the Business Gift Memorable
The gap that the Knack study uncovers between the business gifts given and how they are received is too many are not memorable .
Business gift recipients tend to be highly satisfied with the gifts they receive, but satisfaction is a far cry from delight and that is what business gift givers should aim for. “It’s memorability that drives the connectedness and loyalty that create ROI,” Jennings explains.
What makes a business gift memorable drills down to three qualities: A gift selected just for the recipient; one that includes a personal message; and a gift that is personalized with one’s name or initials on it.
Other qualities that increase the desirability and memorability of a business gift include what is described as “value attributes” such as made-in-U.S.A. certification, a gift that gives back, one that is handmade/artisan, sustainable and from a small business, woman-owned and minority-owned business. For example, C-suite executives were more likely to be influenced by social movements and to prefer gifts with other added “value attributes.”
While it may be dangerous to venture too far into polarizing causes in business gifts, increasingly Jennings predicts business gifting decisions will be influenced by social movements, sustainability and responsibility.
Of note, the study looked specifically at the political affiliation of business gifters, e.g. agree or disagree with President Trump, and how strongly that impacted gifting to various social movements, such as #MakeAmericaGreatAgain, #StrongerTogether, #MeToo, #FamiliesBelongTogether and #BlackLivesMatter.
Put Gifting to Work to Build Business Connections
“Business gifting is an important tool in retaining clients,” Jennings stresses and so should be undertaken with as much thought as other growth strategies that businesses use. Yet over two-thirds of business gifters reporting being less than confident when it comes to selecting and giving business gifts.
For those in a quandary about what to give, Jennings concludes with this checklist for fail-safe business gifting:
- Give a useful item, something practical and that everyone can use.
- Surround the useful item with shareable gourmet food: Think quality over quantity but make it themed, for example pair a cheeseboard with crackers and jam or a travel backpack with jerky and trail mix or coffee tumbler with high-quality coffee beans.
- Give items made in the U.S. Specific causes might be polarizing but Made in USA is universally favored as a top values attribute in this study.
- Spend between $50-$150, with Junior level business partners in the $50-$65 range, most clients and manager/director level associates at $75-$100 and for C-suite execs, VPs and most valued clients up to $140-$160.
- Write a personally-addressed note – a no brainer! “This is without a doubt the single most powerful – and cheapest – thing you can do to create a lasting personal connection with your gift,” Jennings says.
If you feel overwhelmed by gifting, you’re not alone. A surprising amount of respondents say that they would like to give more personalized gifts but it’s difficult to do so. We’re here to help. We offer a free personal concierge service to help companies like yours create a gifting plan that will accomplish your goals and meet your budget. No strings attached, so let us know how we can help.
*This article was originally published by Forbes and is used with permission.