The effects of the COVID-19 pandemic have been felt across every industry, as companies have adjusted priorities, revenue strategies, sales projections and took extreme actions to tighten spend – including freezing and in some cases, completely cutting discretionary budgets. In addition, companies turned to their Procurement Department in order to help identify savings opportunities with current and future suppliers. In a recent study released by Deloitte, 79% of Chief Procurement Officers documented cost reduction related to procurement as their top priority. But we know that gifting has become a key way to build and foster relationships as teams navigate the absence of face-to-face interactions driven by COVID-19, and should still be a high priority in the Sales/Marketing budget. So, the question becomes, how do you optimize your already squeezed gifting budget in order to send the highest quality, personalized gifts possible in order to get the highest return on investment? Here are some key areas to focus on in order to stay within your budget and still attain high quality products that create an optimal gift experience.
Partnering with one company to fulfill all of your gifting for an extended period of time can save a great deal of money. By fulfilling all of your gifting, partners are more likely to be able to save money based on volume discounts on product, packaging, and shipping based on your total spend, saving you money in the long run. According to the Next Level Purchasing Association, multi-year agreements help “insure against major fluctuations in price and mitigate risk for both parties” which can benefit your budget in the long run.
Long-term partnerships also create efficiencies in your gifting activities, such as ensuring your partner has gifting experts who understand your gifting budget, in-hand dates, and the messages you are trying to relay and will recommend the best gift items or sets to suit your clientele or occasion. In addition, the opportunity to buy in volume to satisfy all of your gifting over a designated time period (for example, annually) will deepen discounts on product and packaging, further unlocking potential savings. Not to mention, free up your staff from the tasks associated with curating gifts, kitting gifts together and shipping!
Minimizing Fees Associated With Gifting
Some gifting providers can provide deep discounts on product, but layer on extra fees to ensure transactions with you are profitable. Some of those fees include set up and design fees for branding and personalization, customer support fees and elevated shipping costs. ProductGraph studied industry examples of personalization fees and found the average price for product personalization is 44% of the base product price! The equates to your business spending nearly twice to add a personal touch to your gift. When shopping for a vendor, dig into the fees charged for branding and personalization and the minimum requirements. In addition, some companies charge based on the type/size of product or the type of customization, for example, deboss vs. etching, etc., while others have a standard flat fee. When looking at personalization costs, always be aware of set-up fees. Set up fees can really cramp your budget based on the number of items and type of personalization you choose. Finding a partner who will offer personalization and customization with little to no set up fees will allow you to reallocate your money where it matters—the gift item! Dodging set-up fees can help save money on the front end, leaving more room for additional gift items or higher quality products. Another fee that can be avoided is a minimum fee. Some companies will charge a higher rate for products or simply not fulfill orders that don’t meet the minimum volume criteria. To make the most of the budget, find a vendor that is willing to accommodate for any number of gifts.
Packaging is the first impression of your gift. It is your opportunity to introduce your brand as the sender and set the tone for the entire gifting experience; however, custom packaging and branding can be expensive. This can be yet another benefit of a multi-occasion partnership - leverage your entire gift volume to source custom packaging, or work with a vendor who will find a vendor who can provide high quality gift packaging at discounted prices. As you evaluate trade-offs for your gift, however, consider the value of high quality beautiful packaging: in a study conducted by Dr. Daniel J Howard from Southern Methodist University, Howard discovered that gift packaging “has utility in cuing a happy mood which, in turn, positively biases attitudes.” In other words, the packaging sets the stage for the gift building and strengthening your relationship with the recipient, so don’t forgo a beautiful gift presentation.
Shipping is another large fee to consider in your gifting budget. In 2017, The Wall Street Journal found that companies spent an astonishing $1.5 trillion on shipping; and with the pressure caused by COVID-19 on the global supply chain, it is only increasing. To stretch your money, ask the gifting company what options there are for shipping. Work with a vendor who can save your company money with various shipping options. As we mentioned above, companies that you partner with are more likely to have better rates on shipping due to the guaranteed volume of gift orders, allow them to leverage the full value of your agreement as shipping rates fluctuate.
Higher volume purchasing can lead to an increase in discounts for you. The costs of the product decreases when the volume increases, allowing your budget to be opened to other possibilities. When picking gifts for a certain occasion or recipient, plan to order all gifts for the year in one transaction. This takes planning on the front end to establish how many gifts are being bought, for whom they are being bought for, what occasion the gift is for, the price for each gift based on occasion or person, and how much the overall budget is. When accounting for the previous stated factors, understand that purchasing all items, at once, can help save money in the long run. The Balance found that purchasing items in bulk can save a company anywhere from 20-85%. This allows you to reinvest and pursue higher quality products from luxury brands for your gift recipients.
And while you are thinking about high volume, ensure your partner will provide storage at low or no cost as you wait to ship gifts. This ties back into the value of partnership and provides you with leverage to negotiate with a potential gifting partner.
Strategic planning can allow gifting to fit into any budget, and the trick is to find a partner who helps you optimize the amount of your budget you spend on the gift items - after all, that’s what it’s all about!