You reap what you sow.
Gift giving is a signal: reciprocity.
When you date someone, you tend to give little gifts along the way. At the same time, you’re getting to know the person better as the relationship grows.
Think about the old-school ways your grandma and grandpa might have developed their first relationship: handwritten notes, dinners, shows, ballgames.
This book talks about giving gifts to your current and future clients in this way, gifts in the $100-$1000 range (not gifting a Rolex or a Louis Vuitton), reciprocal in value from the business you may have gotten.
Surprise and delight: The best time to give gifts is not when they are expected, so definitely not at Christmas. Think about the person who is receiving the gift and the time frame in which the gift is given.
Planned randomness. Value comes from uncertainty. Navigate to www.giftology.com/books-bonus for a gift-giving calendar.
The author gives out gifts, but he never puts his logo on any of the products. He puts his clients’ logo or his clients’ spouse’s name or monogram on the gift. The gift is supposed to be all about the person who’s getting the gift. Not about you.
Think of giving something that your client will be inclined to use 365 days per year, like an engraved knife set, rather than giving something that only lasts for 24 hours.
You can redirect your trade-show exhibition funds to gift-giving because it gets more referrals.
Create a referral factory. One raving fan is better than 10 mediocre fans.
Kitchen items are great. How often are you in the kitchen?
Make a first-class impression before you’ve met in person.
Give gifts to suppliers and employees, not just customers and clients.
Who are your key stakeholders? Who has helped you get to where you are today? Show them tangibly.
Make a relationship action plan.
Clients are your best salespeople.
To stand out, make your business card and letterhead metal, rather than cheap paper.
Delight your clients’ children. Give them gifts too!
Get the initials in the gift.
Your gifts should align with your core values.
Locally sourced vendors that are right in the area are better than big box stores.
Avoid Apple products, nuts, chocolate, fruit baskets, Xmas hams, wine. Go for something that people use on a daily or weekly basis and find the nicest one of its kind that you can reasonably afford. Cutlery is a good example.
An artifact is universal and personalized.
Giving a gift is not about entering the spotlight, it is about shining a light on someone else.
Send one gift quarterly is a good rule of thumb. Forget the jelly of the month club, keep em guessing on when the next package will arrive.
Gift 2% to 10% of your net profit.
Build the List
Who are the top 100-1000 relationships that helped you get to where you are today and who will help you get to where you want to be tomorrow? Consider employees, clients, referral partners, industry influencers, media, suppliers, mentors, the board of directors, advisors, and others.
Make a list of their names, spouse’s names, address, email, and phone number to make follow up easy.
Shorten the list until you are comfortable with the budget but don’t lessen the economic value per impression.
Determine Economic Value of the Relationship
Consider reinvesting 1% of the lifetime economic value of the relationship as the target investment amount. In most cases, this works out to be 5% of the annual margin for a relationship.
Every organization works on different margin targets and has different objectives, so the following formula should be considered a guideline when determining the value to reinvest into a relationship.
We use the following formula when calculating the value as it considers both immediate value and total lifetime value.
Annual margin of the relationship X 5%
Annual margin of the relationship X anticipated years retained
The target we are shooting for is a 1% annual reinvestment of the lifetime value.
$10,000 annual margin X 5% = 500
$10,000 annual margin x 5 years =50,000
500/50,000 = 1%
In some cases, a client may have a shorter anticipated life cycle. In such a case, we would lower the % reinvested annually to meet the 1% lifetime value target. Let’s look at a relationship with a two-year anticipated life cycle.
$10,000 annual margin X 2% = 200
$10,000 X 2 years = 20,000
200/20,000 = 1%
Likewise, in some cases, a client may have a longer anticipated life cycle. In such a case, we would consider reinvesting more annually to meet the 1% lifetime value target. The maximum life cycle we use is ten years.
$10,000 X 10% = 1,000
$10,000 X 10 = 100,000
1,000/100,000 = 1%
The Artifact of the Relationship
Using the economic value of the relationship to select the gifts. Use the price of a nice dinner or a round of golf as the barometer ($100-1000). Use the following 18 questions to evaluate the plan:
Surprise and Delight
Using planned randomness to determine the gift frequency and schedule.
Don’t send gifts around popular holidays, and especially not between Thanksgiving and Christmas! Your gift will likely get lost in the noise and will not have the same impact as the same gift sent at a different time of year.
Pick random dates, or obscure holidays, and center your gift-giving campaign around that. When a gift is unexpected, it automatically has more value.
Cost per impression calculation
If you send someone a lasting gift, they will be able to use it over and over again. Every time they see the gift, they will be reminded of their relationship with you. You can spend $1,500 on a sporting event, and a nice dinner and the gift will soon be forgotten, making it a high cost per impression. Conversely, you can spend $1,500 on a knife set and remain top of mind every time they prepare a meal. This will lower your cost per impression to mere cents over time.
Investment/How many times they interact with it = Cost Per Impression
10 Gifts to Avoid Giving Key Clients: