Branding Business Marketing

Boosting Customer Loyalty with Gifts

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In a competitive business environment, customer loyalty determines the success or failure of your brand. If customers are not loyal, they’ll buy from someone else. As they do that, your revenues and profit margins decrease, putting your business at risk. Therefore, you should prioritize customer loyalty if you want your business to be successful. But how do you do that?

Building Customer Loyalty

People generally want to feel appreciated. Your customers go out of their way to buy from you. They could have chosen another brand, but they decided to stick with you. Show them that you appreciate their purchase through gifts and rewards.

How Best to Give Gifts to Customers

Gift-giving is a process. It’s naïve to think giving gifts will guarantee customer loyalty. Remember that your competitors also have loyalty programs. In a way, prospects expect some kind of reward after making a purchase, especially when repeat business is the norm.  That’s why every sandwich shop on the block has a punchcard program.

If you want to make an impact with your gifts, you need to put some thought into it.  It needs to be a gift that provides value to the customer, otherwise it’s just a waste of your money if it’s not something the customer will even care about.  It should also be personalized or feel special in some way, so it’s more than just “your 10th sandwich is free”.  Give them something that feels like a bonus, and when it’s unexpected all the better!

Choosing Which Customers should be Rewarded with a Gift

Prospective Customers

The best way to add value to a customer is to give them something they need. There are two main types of clients: prospective and current. Prospective clients are those people that are interested in your brand and what you have to offer, but they haven’t made any purchase. A prospective client may subscribe to your email newsletter, come to your event, or follow you on social media.

The best gift to give prospective customers is a free prize. Choose something that is trendy and is closely related to your brand.

Give everyone interested in the prize a chance to win it by hosting a competition. People should register using their names and email addresses if they want to take part in the competition. You can hold the competition on your social media page or at a live event. This competition will boost your brand’s visibility and increase your online followers. People will be talking about your brand.

If it’s a live event, you can give all the participants branded items with your company name and logo. Then, use that email registration list to send the prospective clients more information about your products later on.

Not everybody will open that email. However, the few that are interested enough to open it are more likely to buy from you. Entice them one or two weeks later with another email that offers them a discount for being first time buyers.

Current Customers

You can provide value for your current customers by giving them redeemable loyalty points. For every purchase they make, they earn points equivalent to the purchase value.

You can also create special VIP loyalty programs for frequent buyers. There should be exclusive discounts and gift coupons for this category. Since this category has your most loyal customers, they deserve special rewards so that they remain with your brand.

Getting Good Value for the Expense

Any gift you give to prospective and current clients must add value to your business. To make sure you’re not overspending, calculate the overall value of a client. How much does a customer spend on your products every year?

The value of the gift should be equal to the average annual expenditure of the customer. For example, if a customer spends an average of $1000 on your products every year, you should expect to spend more than if a customer’s average spend is around $200 per year.  Make sure the price tag is relative to the revenue you receive.

With new customers, it can be tricky because you don’t know whether or not they’ll ever give you their business.  So for this you’ll want to think about what the potential lifetime value of the customer would be or what you might spend on advertising to hook potential leads as well.  You don’t want to spend too much because the customer might just walk away with their free gift and never think about you again, but spending too little won’t even put you on their radar. 

Gift Personalization

If you want customers to remember your brand, you have to make the gift unique. Look into individual customer profiles. Do they have families? What are their hobbies?

For example, if a high-value client has a family, it’s wise to send them a gift that can be appreciated by all family members. An example of a good family gift is a set of knives or cooking ware. Alternatively, the high-value client could be a golf player. In that case, a set of golf clubs would be an ideal gift.

Of course, it’s not always possible to know enough about individual customers to get them something highly personalized.  That’s okay.  You can always fall back on more generic gifts, particularly those related to your industry because if the customer falls into your target demographics, they probably share some of the same wants and needs.  For example, if you run a gym and have customers that have been loyal members for a year, it’s safe to say they’re health-conscious people who might appreciate a gift basket full of healthy snacks or a coupon for workout clothes.

If you want to avoid the guessing game, though, straight up discounts or cash rewards are always appreciated too.  Since giving out cash can seem a bit unprofessional, consider ordering some prepaid debit gift cards.  These function like cash and can be used anywhere that takes typical debit/credit cards, so your customers can get whatever they like best with the funds.  You can also customize these in many cases to add your own brand logo and personalized messaging which will remind them of your business every time they use their gift card.

To conclude, personalized gifts that add value to the client can boost loyalty. When choosing gifts, spend according to the value of the customer. We hope you can put what you have learned here into practice for better business performance.

About the author


Bil Macintosh

Bill Macintosh is an all-around geek who's worked in Information Technology for over 20 years after getting his Master's degree in computer applications from Boston University.  He loves Star Wars and Star Trek equally, and blogs regularly about technology, business and geeky entertainment at Chowder Bucket.