The number of gifts is calculated based on the number of your customers and the percentage rewarded by the gift (see who to reward below). In order for the gift to be profitable for the company, it must mark the customer “sufficiently”. Thus, it is useless to offer a promotional pen to the customer who generates you 5000 $ of annual turnover. Conversely we cannot give the customer the impression that he is bribed or that we have margins such that we can make a sumptuary gift.
- As a result, a unit budget of between $ 15 and $ 65 VAT included (VAT recoverable) is the majority rule.
- For the main customers, the gift may exceed this range but must be relatively exceptional and in this case it must provide a significantly higher amount (usually 80 $ to 150 $).
- As for the small client, it is admitted that his gift does not exceed 1% of his turnover or for large markets 5% of the margin.
Finally, to define the overall budget you have two complementary approaches: Either we first define a global budget “gifts” (percentage of turnover or margin) and then corrected according to the possible distributions. Either we start from the list of recipients and validate the relevance of the total budget. The use of the Promotional Gifts is important there.
Who to distribute business gifts?
Most often, it is the sales force, in contact with the customer, who defines a list. This “human” approach is the best because the gift is a “human” link between the company and its customers. Of course we can validate this approach by an accounting analysis!
The budget approach is based on 2 axes, the value of each gift and their number. The value is not taxable if you are subject to VAT and if you offer a maximum gift of 65 € per client per year (all inclusive, including transportation to your customer).
Because if it is obvious that we must reward the best customers we can also take into account the best progress or prospects: we must never neglect the customer who ensures the income of your business but we must think about the future of all that “the aspiring big client” will be much more sensitive to being already considered important (especially since you are then in competition with a competitor who until then is his main supplier). There are Popular Promotional Gifts available now.
To define a framework one can draw inspiration from the following ideas:
Only the top 50 receives a gift. Or classify customers: the top 20 receives a big gift and the top 100 a small gift. In this case, we can if we wish to explain it to the customer “you have entered our top 50; we are pleased to reward you and to assure you of the importance we attach to our good relationship.”
A distribution of the gift budget according to criteria specific to the company (geographical, by branch)
The delegation to the sales force: you define a global budget by commercial according to objective criteria (turnover, progression and / or margin) and you are free to allocate your budget by simply asking for a report (not to control the choice but to emphasize the importance you give to the gift approach).