Feature Article - July/August 2020

Strengthening Ties

Business Gifting, As Strong a Tool as Ever

By Rick Dandes

As America continues to grapple with the COVID-19 pandemic, some best practices in reward and incentive programs are well positioned to strengthen B2B and B2C connections that might have weakened during the shutdown and ensuing economic hardships.

Prior to the business downturn, said Rick Low, CPIM, managing partner at Atlantic Incentives LLC and RLL Advisory Services, business gifts may have become an expectation by the customer: "What did I get this year?"

But because of the pandemic, in 2020, for companies that can afford to send gifts, the budgets are most likely going to be reduced, Low said. "The customers that do receive them will hopefully know their business is really appreciated."

That's exactly the point, said Matt Osborn, CEO, Premco Associates, Centennial, Colo. "Business gifts can be a way of saying 'Thanks for sticking with us. We are still here to serve you.' It can serve as a reminder that we were there with you during the pandemic, and we want to be with you going forward, as the economy and businesses bounce back."

In the short term, the pandemic has definitely increased the use of appreciation gifts to front-line workers and other employees who have been working hard and also those who are financially stressed, added Ira Ozer, CEO of Engagement Partners, based in Chappaqua, N.Y. "The gifts given are typically gift cards for 'needs' vs. 'wants,' such as supermarket, pharmacy and gas cards. Long-term, these types of stress gifts will likely be reduced, but there may be an increase on gifting programs that are oriented to remote workers."

Many companies have been giving "surprise and delight" gifts to their B2B and B2C customers, Ozer explained, as a simple gesture of thank you for their loyalty. "These programs will likely continue for various audiences as an addition to traditional points programs."

Companies can also use this time to evaluate and recalibrate their programs based on new metrics, Low suggested.

Like a well-designed incentive program, where presentation is key, how the gift is presented to the customer is more important now than ever, he said. One-on-one may not be feasible or allowed. Personalizing the presentation will overcome the physical separation and create a long-lasting impression. Hand-written thank you notes should be the norm, not the exception. "A brief and legible hand-written note expressing appreciation for their current and future business or patronage can be delivered with the gift or sent separately ahead of time alerting them to a future delivery," Low said.

Meanwhile, from a supplier perspective, the pandemic has certainly been a challenge, said Corey Wolfe, director of sales, Links Unlimited, which is based in Cincinnati. Asked if he thinks the pandemic will have any long-term effects on what you do as a corporate channel supplier and fulfillment center, he said, "As a supplier I do believe we will see a hit to our customers' businesses that manage loyalty, recognition and reward programs.

"Most of these programs use points as a currency, and with business travel/expenses being shut off, point banks in these programs are naturally going to shrink, hurting merchandise redemptions overall," Wolfe said. However, he added, "As a fulfillment center I believe we will be busier than ever with dropships and kitting projects. Corporations ultimately want to communicate with product to their target, and because congregating is somewhat eliminated, fulfillment/kitting services will be critical to stay in front of those targets.

"Of course," he continued, "the pandemic has had a negative effect on our customers' top clients and spending has been severely cut."

Importance of Corporate Gifting

Business gifts are important for a few reasons, said Osborn: "to build loyalty between businesses and their employees; to build loyalty between businesses and their customers, as it helps with customer retention; and as a basic Marketing 101 tool as well."

Matt Burdette, director of corporate sales & marketing for Omaha Steaks, agreed. "Gifting," he said, "shows appreciation and gratitude to your team and clients. It is a key to staying ahead in a competitive environment. Giving a business gift shows you recognize their part in your organization and allows you to create a memorable gift experience for the client or employee that can be enjoyed at home with family and friends. In this time of COVID-19 and work-at-home, an appreciation gift for your team speaks volumes and lets them know you are there and care."

Business gifts reinforce an employee's sense of belonging and contribution to the team, Burdette said. Client gifting keeps your business top of mind with your best customers and can reinforce a strong message of branding. Business gifting can also be a great lead generation and prospecting tool. In this day of "virtual meetings," a flexible and digital gift for securing a meeting is an ideal promotion.

That's right, Ozer said. "For the same reason that people give gifts to friends and family, businesses want to build relationships and recognize their customers. In a business context, the hope is that customers will continue to do business, solidify their loyalty and encourage new customer referrals."