According to PPAI (Profession Products Association International) American business spends over six billion dollars per year on gifts. Not surprisingly, the majority of gift giving comes during the traditional holiday season. In a PPAI study, Business-Gift Practices, they found 84% of businesses give gifts and for the most part, upper-level management chooses the gift. So far we know businesses spend a lot of money on gift giving, most organizations give gifts, and senior management finds it important enough to be involved in the gift decision. But why do businesses give gifts?

Why Give Gifts?

In the PPAI study, businesses were asked what they hoped to accomplish with gifts. They questioned more than 6,000 organizations and found most used gifts to thank their customers. While some occasionally used gifts for damage control, the majority participated in gift giving primarily to show appreciation and recognition, build brand loyalty, and as a marketing tool.

  • To thank customers 70.0%
  • To build goodwill 65.9%
  • To develop business 49.6%
  • To recognize employee 49.6% performance, longevity
  • To generate referrals 31.3%
  • To influence purchasing decisions 21.6%
  • Because customers expect them 12.2%
  • Other 7.5%

 Choosing a Gift is a Process

Choosing a gift for customers, employees, or vendors shouldn’t be a haphazard decision. The decision making process begins by knowing the reason for a gift. Without an understanding of what a business hopes to accomplish with a gift it’s difficult to choose an appropriate gift. Knowing why a company wants to share a gift logically leads to who to give it to and what to give. Not taking the time to analyze why, who, and what is no different than throwing a dart at a catalog.

Gift Giving Begins with Understanding Why

Corporate gift giving is a part of the American business culture. It has become an important tool in the business marketing arsenal. It shouldn’t be a hurried last minute decision. Gifts should be fitted to the purposes of the giver, and that begins with knowing why. If you’d like to know more about gift giving options for your organization, contact our Marketing Solutions team, we’ll be happy to help you. But, keep in mind, the first thing we’ll do is ask you why.