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Sunday, November 18, 2007


Should we have a seasonal gift-giving program?

This question came up at a recent staff meeting. Chase proposed we obtain gifts for our contract advertisers. We briefly discussed costs; it looks like the expense would be $1,000 or so, obviously not a business-breaker; but (as it certainly is not in our annual planning budget) more than an impulse "yes". I deflected the decision on the matter, noting that we had never given significant gifts on the client side, and I wanted to be careful and thoughtful about it, and not rush the decision. Chase accepted the decision, but said he would use his own resources to purchase gifts for his key clients.

I've been thinking of this some more, as the Christmas Holiday season approaches. The more I think of it, the more challenging the issue becomes. The reason is that conventional one size-fits-all gifts are not necessarily effective, the wrong gift can do much more harm than good, and that you will have trouble finding empirical evidence of the value of gift giving.

But, ahh, the situation inverts when you consider the importance of reciprocity and the influential effect of a truly well thought and creative gift -- especially where one isn't expected.

For example, multi-millionaire Seymour Schulich describes in his book how he managed to obtain scarce library resources as a university student.

"The solution was to get the reading list ahead of time and reserve the books before everyone else, but how,?" he writes in Get Smarter: Life and Business Lessons. "I hatched a plan with my then classmate Lawrence Bloomberg, a serious, persistent fellow (who grew to become my best friend.) We went to the Laura Secords store and bought the biggest box of fine chocolate we could find -- $5 for five pounds (the same box would probably cost about $50 today). We gave it to Miss Sears, the intimidating, no nonsense woman who ran the library.

"Now we didn't know what was going to be on the next MBA reading list, but Miss Sears sure did. So when the herd of nerds next appeared, they were told the books were reserved for Schulich and Bloomberg. Our classmates could never figure out how we always seemed to have our names at the top of the waiting list. . . .

"This small anecdote illustrates one of the most important concepts for a young person to learn, in business and in life: reciprocity. In simple terms, reciprocity is the idea that people have a very hard time saying no to someone who has done something even a small favour, for them."
Fair enough. And a good argument, you may say, for an effective gift-giving program. But here is the problem I'm having in implementing it. I'm simply not sure that a small business can effectively define what gift is right, to who, when the real element of gift giving -- and its true effectiveness -- is based on individual and intuitive decision-making.

For example, Schulich and Bloomberg appreciated that the often-unrecognized librarian would appreciate the gift but its scale and scope were not so excessive as to be seen as a bribe. (Gifts to school teachers can have a similar effect; Vivian says the small gifts she sends on behalf of Eric seem to do something positive in the way the teachers respond/return to her calls.)

Cultural sensitivities are challenging, a gift that is right to one person can be downright offensive to another. Bribery and 'influence peddling' rules also creep into the picture, especially if the gift is going to someone in the public sector where you are hoping to win further work. Gifts with promotional logos or messages on them may be appropriate (and of course the promotional gifts business is huge) but the payback from such unpersonalized gifts is debatable and I think hard to measure effectively.

So, what should we do? One of my good friends in business said he inverted the rules of gift giving and always made special efforts to be generous to his suppliers, not his clients. He said the inversion worked like a charm. My late father, at his drugstore, always took a more conventional approach. Bottles of perfume, chocolates, and other stuff were wrapped each year and distributed to nearby medical offices -- clearly a rational move for a pharmacy (even wiser, he provided low rent space to at least one medical group in a building he owned near the drugstore -- clearly this is an extreme but highly effective way to combine reciprocity and geography effectively.)

I have made it company policy that our sales reps should send out individualized thank you cards to clients (we of course pay for the cards and postage). Obviously it gets a whole lot more complicated however in setting a policy -- and budget -- for gifts. The reason may be that this issue defies centralized policy-setting. Effective gift-giving really works; but you need to be both thoughtful and careful in your decisions (and maybe a little spontaneous.)

Here are a few articles on the Web dealing with this topic.


Sonny Lykos said...

"I'm simply not sure that a small business can effectively define what gift is right, to who, when the real element of gift giving -- and its true effectiveness -- is based on individual and intuitive decision-making."

I don't believe the first part of that sentence is true. In fact, it's pretty easy to determine what type of gift to give to whom. Furthermore, why give a gift only during special occasions like Christmas. In my opinion, gifts have more impact if given randomly, and on no specific date. I used to do that for my wife, and now that I'm typing about it, I'm reminded to start doing it again. Too often we take people we love for granted.

Example: I dropped off several vases of flowers for the women that work in various positions at a large property management company for which I do a lot of work for the condo associations they represent and serve. I told them I appreciated their help in the past and the flowers were just one way I wanted to show my appreciation. I dropped them off on a Monday, the worse day for most of these ladies. Besides, they looked at the flowers for the rest of the day, mentioning to other visitors who gave them to them.

I became the primary vendor, have problems solved almost instantly, calls returned promptly, and am treated like a prince. I drop off those flowers 2-3 times annually. So who gets and is appreciated more, me or my competitors, who do nothing for these ladies except complain.

As for other people, I make a point of knowing their religion, hobbies, likes and dislikes, preferred restaurants and retailers, etc. If possible what their children do for a living. I learned that tactic from a book by Harvey Mackay: "Swim With the Sharks Without Being Eaten Alive." Know your customers, vendors, and staff, and know them well.

Every single one of us likes to be shown that we exist, and are appreciated.

Construction Marketing Ideas said...

Excellent points, Sonny.
I suppose the thing I'm trying to get at is that the 'corporation' is not the best definer of an appropriate gift -- you need to be close to the client or influencer, and the thing needs in my opinion to be truly personalized. Hopefully, I'll lead/guide and encourage our sales team (and other employees) to define and select appropriate gifts -- and with feedback and input, we'll have a system and policies that are both sustainable and effective. I just am not sure I want to whip out a checkbook, go to some promotional company, and buy a 'pile' of gifts for our clients.

Sonny Lykos said...

Mark, when I used to work for a large corporation, a retailer in Chicago with 13 stores - large stores. Their warehouse was rectangular in which on end (the short side) was set up with a train track that could accommodate 13 train cars.

Anyway, when I wanted to give a gift to someone at the corporate office or who worked at one of the other stores, I contacted someone who worked with the person. Those people generally know that persons likes, dislikes, hobbies, kids, etc.

Worked out great. So what I'm saying it to think "local". Continually shrink the company to reach the department/person to whom you want to give the gift. People who work with each other know each other's "druthers', as they say here in south Florida.