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Gifts that work: the business of giving gifts.

Business gifts do extra work today. Modern methods of communication--e-mail, telephone and fax--are efficient but cold, and face-to-face encounters with clients and vendors are less frequent. So the traditional art of giving business gifts helps provide that warm, personal touch without which working relationships suffer over time. If done tastefully and within ethical guidelines, business gifts can cement relationships, foster goodwill and possibly open new accounts. It's a thorny issue, though; a gift may easily turn into a gaffe.

The factors to consider are complex. "Gift-giving can be an effective business strategy when it's carefully thought out," says Gary Garber, general manager of Bonneville Communications, a Salt Lake City-based ad agency and public relations firm. "But it's tough. You have to make the gift personal, relate it to the work you do and show you appreciate the enterprise you're involved in together. Many of our clients, including the LDS Church, are very conservative and have strict limits on gifts."

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The point of a present is to personally acknowledge the human being receiving it. The implication is that the gift-giver knows the recipients well enough to understand them and to appreciate their needs. So giving a present to a business associate prohibited from receiving one is as thoughtful as giving sweets to a diabetic.

Restrictions on business gifts are not about the gifts themselves but about the expectation of payback. Though a gift is ideally something of value given without thought of recompense, in the world of commerce, a present always has at least one string attached. That is: if there were no business relationship, there would be no gift.

Business gifts to government employees are usually restricted because of the risk of favoritism in spending public money. "Salt Lake City's gift-receiving policy is very strict," says Eric M. Kankainen, owner of a structural engineering firm that works with local governments. "They don't even like you to take a city employee out to lunch. The state of Utah is strict, too. They give all gifts to charity." Professional organizations have rules to note on gifts as well, notes Kankainen. "For example, engineers have a very strict code of ethics concerning soliciting or acquiring gratuities."

Business-gift customs evolved over time to quell the personal turmoil or unethical appearance a business gift may carry with it. For example, $25 is often cited as the maximum amount allowable to spend on a tasteful business present; it's also the top IRS deductible for a gift. After all, who can be bought so cheaply? Purists, however, point out that in the commercial world, once you decide to accept gifts given with the hope of altering or reinforcing conduct, then you're only quibbling over your price.

When companies do give business gifts, they usually make it an occasion when they can acknowledge the recipient's life passages, such as a birthday or a hospital stay, or during the mid-winter holiday season.

The purpose of gifts to clients and employees is to express gratitude and open new lines of communication. Vendors, too, are part of the team. "We're in a partnership with our vendors, and when they bust their chops for us, we may express our appreciation with a gift any time of year," says ad exec Garber.

A gift to a current customer should never be seen as being contingent upon future business. However, as a sales promotion strategy, gifts to prospective customers may generate new accounts, leads, increase name awareness or introduce products or services. But it's not a universally accepted practice. "We don't give gifts to prospective clients," says John Youngren, public relations director of Love Communications, a public relations firm and ad agency in Salt Lake. "We think people see through that."

Gifts do open new business contacts, according to Baylor University studies cited by Promotional Products Association International (PPAI). Customers who received a promotional product were significantly more likely to provide a new referral,

In recent studies, customers who received a promotional product (from pens on up to the Brookstone sound system at left) were much more likely to provide a new referral, and non-customers who received a product felt more goodwill toward the company.

and non-customers who received a promotional product expressed more goodwill toward that company and its sales-person than did control groups.

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PPAI, which estimates 2002 industry revenues at $15 billion, says business gifts far outdistance all other categories of purchase, rising by almost two percent from 2001.

The strategy for giving gifts to gain prospective clients is to know whom you want to contact and to settle on a simple message for them. You must do your homework to learn the gift-receiving limitations the prospect works under. Afterwards, keep track of your success, including a record of the thank you notes or other acknowledgements received.

Tactically, the mid-winter holiday season is the best excuse to give business gifts to new prospects. But strategically, it's the worst period for your gift to be noticed in the avalanche of presents exchanged at that time. For this reason, some businesses send out Thanksgiving gifts. Turkey Day has the added benefit of being a holiday without religious connotations.

Whatever the occasion, gift-giving is only successful by matching the present to the recipient. Many gifts are inappropriate because of gender, religion, ethnicity or lifestyle. You wouldn't give a squash racquet to a couch potato, for example.

Personalize, but don't make it too personal. Avoid gifts of clothing or personal care items, suggests the National Association of Female Executives. If the recipient is a cat lover, a cat calendar may work. If they're originally from Texas, they may appreciate a jug of authentic TexMex barbecue sauce.

Quality is an essential consideration, so select something you'd like to receive yourself.

"We always pay extra to get something nice," says Amy Kimball, project manager for Bonneville Communications. "A gift doesn't have to be big, but it does have to be classy." If your gift breaks quickly, that's the wrong message to send.

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A beautiful presentation enhances the perceived value of a gift, so make the wrapping and bow look as attractive as what is inside. You can add buzz to a present by making delivery unusual. "I once couriered a stuffed bear to a client's child who was in the hospital," says Kimball. People remember and talk about such thoughtfulness. You can get extra mileage on giving tickets, too, if you attend the event with your client or prospect. That way you can meet their spouse and help build a personal relationship.

It is tricky selecting business gifts, but retailers have corporate gift-buying services to help. Lands' End, Brookstone and local department stores offer free advice and give deals. For example, Brookstone offers business gift discounts, says Dustin Hahn, assistant manager of the Trolley Square store. "Gravity-defying" magnetic pens ($15) and touchscreen clocks ($30, or $10 with $50 purchase) are hot, he says, as are wafer-thin AcoustiClear sound systems costing $200-$500.

Food gifts are common, and sharing them matches the spirit of the holidays. Toys work well as business gifts because it is difficult to regard them as implying any obligation other than to have fun.

Decorum requires that you buy something for your support staff seasonally, but not necessarily for your boss; if you are the boss, give everyone who works for you a gift of equal value. If you receive a business gift, say thanks, call or send a note soon after. It's for that simple interaction that you were given a gift in the first place.

More is not better when it comes to business gifts. Lavish gifts can bomb--or land the recipient in trouble. Sometimes the best present is outside the gift box. A beautiful card with a heartfelt thank-you can win a colleague's loyalty for years. After all, says Bonneville Communication's Garber, "You don't buy favor, you earn it."

{PCO}RELATED ARTICLE: IRS Taxes Generosity

* The IRS will let your business deduct only up to $25 for business gifts to any one person during the tax year.

* The $25 limit doesn't include incidental costs, such as packaging, insurance, mailing costs or engraving jewelry.

* Small, inexpensive items such as keychains or pens that cost $4 or less and have your name permanently imprinted on them are exempt from the $25 limit.

* A gift of tickets may be considered either a gift or an entertainment expense if you do not attend the event yourself. If you go with the client, you must treat the cost of the tickets as an entertainment expense.

* A gift to an employee is taxable compensation.

--From U.S. Chamber of Commerce web site

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RELATED ARTICLE: Thinking Inside the Gift Box

Walkie-talkies

Cookie bouquet

Fruit of the month subscription

Donation to homeless shelter or to AIDS hospice

Antler headgear for pet dog

Gardening store gift certificate, rather than flowers

Certificate of Appreciation redeemable for petty cash

Tickets to theatre, opera, movie or sporting event

Subscription to a professional publication

Wisconsin cheese or Cache Valley cheese

Texas BBQ sauce

10-lb. bar of chocolate

Beehive State honey

Kansas City steaks

Florida grapefruit

Message gift certificate

Wrapping paper

Mug

Mixed nuts

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By Mark Gerard Hengesbaugh

Illustrations by Leslie Lammle

Mark Hengesbaugh is a Salt Lake City-based freelancer.
COPYRIGHT 2003 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Giftgiving
Author:Hengesbaugh, Mark Gerard
Publication:Utah Business
Geographic Code:1U8UT
Date:Nov 1, 2003
Words:1665
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