Christmas in July

Features - Business Management

Plan now for effective client gift giving.

July 12, 2010

About half of small business owners planned to give gifts to customers last holiday season – in one of the worst economic climates in history, according to American Express OPEN’s Small Business Holiday Monitor. Why? “Entrepreneurs understand the importance of showing appreciation for customers’ business especially during tough economic times,” says Alice Bredin, American Express OPEN business adviser.

In the green industry, more than half of respondents to a Lawn & Landscape online poll say they give gifts, but 40 percent say it’s always last-minute – they wait until the fourth quarter to decide what to give. Thirty-eight percent don’t give gifts at all, and 20 percent select gifts in the third quarter.

July  – the first month of the third quarter – is upon us, so we thought we’d provide a client gift-giving guide to help the 60 percent of you who plan to purchase your client gifts over the next six months. 

Why Give?
Business owners give client gifts for a few different reasons, the American Express survey reveals.

  • To say thank you (82 percent);
  • To celebrate the season (38 percent); and
  • To stand out from the competition (25 percent).

What to Give? 
Phil Harwood, a Michigan-based former green industry business owner, now a consultant, agrees that it’s important to acknowledge clients as valued customers. His company sent its largest clients gift baskets during the Christmas/Hanukah season, but other than that he says its focus was on relationship building. “We spent time with our customers,” he says.

According to the American Express study, the most popular way to recognize clients remains sending cards and calendars; followed by gift cards for retail and restaurants; fruit and food baskets and making a donation to a charity on a client/customer’s behalf. More expensive gifts, such as branded or monogrammed items, have seen the sharpest decline (7 percent down significantly from 19 percent in 2008), while other gifts such as wine/liquor and flowers/plants are holding strong.

One Size Doesn’t Fit All
If they do wish to give gifts, landscape and lawn care companies should give items tailored to their clients, says Cristine Nigro, owner of Proforma Creative Precision, a Foxboro, Mass.-based promotional products supplier. For example, contractors servicing commercial accounts would give different gifts than those servicing homeowners.

“Some companies like to give gifts by tiers of clients – top clients, middle and all others,” she says.

Harwood doesn’t recommend a rule about what to give whom or how much to spend. “I think it really depends on the customer,” he says. “I don’t think a ‘one-size-fits-all’ approach is optimal.”

Fine Lines Lawn Care & Landscaping in Chattanooga, Tenn., has given homemade cookies to clients in the past  – a task owner John Crider calls “tons of work.” The $150,000 company has a 70/30 residential/commercial split.
He estimates the cookies cost a couple dollars per client. This year, the company is considering spending about $3 per client on a cookout.

“A cookout will be less time intensive and will allow for a longer time of personal communication between us and our clients,” Crider says.

When to Give?
For residential customers, Nigro suggests sending cards during the December holidays, but standing out during times of referral.

“I always suggest a nice gift for any client that has given a referral or several referrals,” she says. “You want to thank and cultivate that behavior and really communicate how much it means and what a compliment it is.”

Nigro suggests it’s a good idea to time gift giving with the time of year you’d like a referral. “It never hurts to do so,” she says.

That’s why, for the green industry, she says Earth Day is a nice time to consider.

“You can give during the usual holidays or you can see if you want to stand out and give for Earth Day or maybe some time in the fall when you might want other types of referrals for the winter to maintain business,” she says.

Frances Cole Jones, author of “The Wow Factor: The 33 Things You Must (And Must Not) Do to Guarantee Your Edge in Today’s Business World,” also suggests giving at a time other than the holidays.

“Because there is so much going on around the holiday season, it can be nice to choose a different date,” he says. For commercial clients, giving gifts on their companys’ anniversaries is one way to stand out and recognize them personally.

Colleen Sheehy Orme, owner of CO Marketing and PR in the Washington D.C. area, agrees. “Personally, I think gifts given at unexpected times can be more memorable to a client than holiday gifts, unless the holiday gift has a clever message or twist or it solves a holiday need, such as sending beautifully simple green wreaths,” she says.

How Much to Spend?
Small businesses’ customer gift budgets averaged $455 in 2009, according to the American Express study, but budgets range dramatically depending on each company’s goals.

 “This is going to depend on budget and the style of client,” Nigro says. “I’ve seen landscapers give up to a $250 gift to top clients, then $100, then $20 or $10 – or some give everyone a $10 to $20 item plus cards.”

As for how much to spend per client, consider that customer gifts are generally tax deductible up to $25 per customer, as dictated by IRS Publication 463.

Harwood emphasizes that it’s important to be sensitive to commercial clients’ policies that limit or prohibit gift giving. For example, “A property manager may not be able to accept tickets to a game, but they can spend the afternoon with you golfing,” he says. “It just depends.”

Orme suggests combining an inexpensive item with a larger marketing message so the small gift is well received. A few suggestions include:

  • A seedling that comes with the message “Your Company Name, rooted in our community.”
  • A low-cost plant that you can brand as your own that comes with a card on the end of a plastic stick (like in a flower arrangement) with a hand-written note.
  • A gift of one service to be redeemed that year, such as tree trimming, that could possibly generate more business.
  • Forgo individual gifts in favor of a community project with memorable signage.

What do you do if gifts aren’t in the budget? “There’s always something nice you can do that’s a little extra,” Nigro says. “A hand-written note on nice stationary will even work. The idea is to just take the time to thank your customers for being customers.”