A reader writes:
What is the etiquette of giving gifts as part of relationship-building during the sales cycle? We are in the midst of what will probably be a 4-5 month sales cycle. In building a rapport with the potential client, I found a very appropriate $10.00 gift and sent it to them. Their response was very guarded and I was informed they sent the gift to their legal department asking if they can receive gifts from someone with whom they are negotiating a contract. Any insight on this?
I’ve recently run into this problem myself, from the other end. I often mention sales trainers in this blog and, since they like the publicity, two of them recently sent me food gifts. I had to tell them that, as a journalist, I can’t accept gifts and that their fancy food would go to the local food kitchen. It didn’t make me think any less of them, but the situation was a little embarrassing.
Anyway, a while back I had a discussion on this subject with Jerry Acuff, author of “The Relationship Edge in Business.” Here’s what I took away from that conversation, along with some observations from my own experience:
- Gifts are for friends not contacts. You use a gift to deepen a relationship not to develop one. Giving a gift too early in a relationship seems phony and desperate, like when a guy shows up on a blind date with a dozen roses.
- Gifts are for customers not prospects. In most cases, you won’t have enough of a relationship with a prospect to justify the giving of a gift. So don’t even think about gifting until you’ve got an ongoing business relationship.
- Gifts must be inexpensive or free. If a gift is too big, it’s going to be perceived as a bribe. You want to show that you care, not make the customer feel obligated to buy. I once developed a long-term business relationship using a Star Trek poster I got for free at the drug store.
- Gifts should be highly personalized. Jerry once had a customer who was a huge Notre Dame football fan; he called up the local newspaper in South Bend and arranged to have the Sunday sports section sent to that customer each week.
- Promotional items are not gifts. If a “gift” has your logo on it, you are asking the recipient to provide you with free advertising, so it is not really a gift. So you can pretty much hand out as many “spifs” as you want.
By the way, the above is only true for doing business in the United States. The rules are, I understand, quite different in other parts of the world. For example, it’s apparently considered rude to open a business negotiation in Russia without providing a fairly substantial gift, like a bottle of fancy vodka. Similarly, developing guanxi relationships in China often involve the giving of gifts. (See: “How to Outsource Your Manufacturing” if you’re interested in more info about doing business in China.)
