Corporate gifting in the cost-of-business crisis? More important than ever.
Posted on March 21, 2023 by Megan Goodfield
After having only just bounced back from the COVID-19 pandemic, many businesses are now facing another existential crisis: the increasing cost of business.
Soaring energy bills, ongoing supply-chain issues and labour shortages have created a perfect financial storm, leading to the UK’s highest company insolvency rates since 2009.
Companies are looking to cut costs wherever they can. Corporate gifting activity, whether aimed at clients or employees, is often proposed as the first thing to go. Seemingly inessential nice-to-haves are an easy target for cash-strapped finance leaders.
But as any experienced marketer or HR professional will tell you, now’s not the time to cut back on strengthening relationships with either clients or employees. Quite the opposite.
Making sweeping cuts to employee retention strategies is a short-sighted move. Research shows that creating a culture where staff are regularly recognised through rewards boosts employee engagement, productivity and retention.
Even a small gift can make a big difference to employee morale. And keeping staff happy reduces turnover – a costly business in and of itself. Once thought to cost around one third of an employee’s annual salary, the cost of recruiting and training a new employee has now risen to twice their annual salary. Simply put, replacing disenfranchised employees is unaffordable right now. Strong employee retention strategies are a must.
Cutting back on client corporate gifting is a similarly false economy. Research shows that, during a downturn, businesses that maintain or increase spending on client relationships tend to bounce back more successfully than those that cut back.
Short-term savings made by lowering a business’s profile amongst its clients will have long-term consequences that can take years to reverse. When a business stops reaching out to clients, those clients become prime targets for competitors. Even a company’s most loyal customers will stray if a rival company swoops in while they’re feeling forgotten.
These are trying times for businesses. But by showing appreciation to staff and clients through relatively inexpensive corporate gifts, you can improve retention and engagement – and in turn, boost your company’s bottom line. And in the cost-of-business crisis, that’s the number-one goal.
‘Stand out’ brands and gifting: the public has spoken
We recently surveyed 1,000 members of the British public, across all ages and backgrounds. We wanted to learn more about their views on corporate gifting, and on gift cards in particular.
We also wanted to know how gift cards affect the way they view the businesses that provide them – not just in the moment of receiving the gift card, but months and even years down the line.
In other words, how can businesses stand out – for the right reasons – when they give gift cards to employees or customers?
Here’s the key takeaway from our survey: To really stand out and leave a lasting impression with gift cards, companies need to offer recipients something more.
- 70% would prefer to receive a gift card from a retailer with a good reputation for sustainability and responsible working practices.
- The above response was even more prevalent amongst younger respondents, with 83.3% of 18–24-year-olds and 83.6% of 25–34-year-olds agreeing.
- 71% say that receiving a gift card for a premium brand would positively impact their opinion of the company that gifted them.
It seems self-evident, but it was important to hear it from our 1,000 respondents nonetheless: most people would prefer to receive a gift card that provides them access to high-quality, premium products.
Providing employees or clients free access to some fun little luxuries is a surefire way to instantly lock in positive associations with your business. A premium gift card lifts a company’s gifting activity, and lifts the company’s brand along with it. It creates a lasting positive impression, and puts other businesses’ more workaday gifting in the shade.
With a premium gift card – or e-gift card – in their possession, your giftee is being cheerfully instructed to spoil themselves; your business demands that they purchase an inessential little treat that they wouldn’t otherwise consider. This purchasing experience strengthens the emotional connection between your business and your giftee. They feel ‘seen’ and truly appreciated.
There are considerations to be made, obviously. A balance must be struck between luxury and affordability. Your giftees need to feel like they get an enjoyable level of purchasing power from their gift cards, without you having to serve them in triple- or quadruple-figured denominations.
Premium needn’t equate to financially prohibitive, however.
- 80.7% say that receiving an M&S Gift Card would make them feel more positively about the company that gifted them.
- 80.1% say they’d feel ‘truly delighted’ or ‘genuinely appreciated’ if they received an M&S Gift Card from a business.
The M&S brand evokes quality, trust and prestige – it’s seen as ‘premium’, while still being affordable. Which means that, when it comes to your gift-card options, standing out from the crowd thankfully needn’t cost the earth.
Read our full report – shaped by our survey of 1,000 UK consumers – on the true impact of corporate gifting
Alternatively, enquire now about making your brand stand out with M&S Corporate Gifts