Firms showing presents of mind with corporate gifts

MEDIA & MARKETING:Multinationals' spend has not changed, but most popular items are practical and affordable

THE STRUGGLING economy has forced many businesses to cut expenses. But even if the banks are no longer forking out for branded golf balls, promotional products are still finding favour with Irish companies looking to reward loyal clients this Christmas.

It’s an industry that design, print and promotions company Snap, which sells branded products to about 30,000 customers each year, estimates to be worth in excess of €10 million per annum.

This year, traditional gifts like boxes of crystal have been consigned to the bottom of the list. Instead, the most popular gifts are less expensive and more practical – such as USB keys – according to Jim Hackman, whose company Hackman Enterprises has been selling promotional gifts for 25 years.

According to Hackman, demand for promotional flash drives has risen so much because they are cheap, practical and offer a wide variety of branding options. Diaries are also selling well this Christmas for Hackman, with over 7,000 orders thus far.

John Eager, chief executive of Snap Group, is back from Australia, where he says company gift-giving is nowhere near as popular as it is in Ireland.

“Irish companies like to give gifts. This Christmas, there is a lot of focus on utility gifts and not so much on corporate gifts that look pretty. Popular choices this year are items like warm drink holders and coffee or tea mugs, all of which can be branded. Also very popular are stress balls and calendars. Business is up in the last quarter compared to last year and overall the same as last year,” he says.

Eager says some companies, particularly in the financial services and professional services sectors, are willing to spend as much as €40 on a gift for a client.

But while companies still want to buy gifts for their clients, Aodh Bourke of ASA Marketing says they are spending a lot less than they used to. In business since 1984, Bourke says the average spend per company on gifts is €500–€2,000 and the average budget for each gift is €5–€10.

Bourke adds: “Before the downturn, small companies would spend about €2,000 and for big companies, the sky was the limit. We are doing the same volumes with these multinationals as we have done in previous years. There have been no cutbacks in these companies at all.”

But does giving a gift of a branded product boost the bottom line? According to a study by the British Promotional Merchandise Association, half of respondents said they purchased goods or services from companies branded on a product sitting on their desk. It found pens to be the number one item people keep on their desk, followed by calendars, mousemats, post-it notes and mugs. The number one reason anyone keeps a promotional item is its usefulness.

Cheryl Jackson-Leafield, marketing manager at 4Imprint, a promotional product specialist, says the most popular order is 500 branded pens, which cost about 50 cent each. She says demand and average order per customer fell by about 5 per cent but rebounded in 2010.

Bourke says his Galway multinational customers are spending the same as ever on client gifts.

Pressing the point about the benefits of gift giving, Hackman says: “In the good times, it’s nice to give a Christmas gift and in the bad times, it’s essential to keep your name top of mind with your clients.”

Like his competitors, Hackman sources most of his products in the Far East, which makes stock management tricky especially as customers are leaving it later to order gifts. But Eager says it is still possible to use products sourced in Ireland. He says the most successful promotional campaign by Snap this year was one where it hand-delivered 1,000 Snap branded cup cakes baked by Mannings Bakery in Coolock to its top customers.

“Customers were impressed with the creativity. Henry Ford once said: ‘The person who puts the most into a dollar rather than the least into the dollar is sure to succeed’. It is incredibly important for marketing people to say thank you.”