Giftology
By John Rulin
*A Book Review*
by Michael C. Gray
© 2018 by Michael C. Gray
Giving gifts is a custom that goes back to ancient times. Visiting dignitaries from other countries would bring lavish gifts to monarchs as a gesture of friendship and to establish diplomatic relations.
In Giftology, John Ruhlin says this custom is being revived and should be included in the marketing plans of modern companies.
Although this book is a marketing piece and John Ruhlin sells gifts for businesses to use in their marketing efforts, the premise is worth considering.
Today, businesses face the challenge of a bombardment of marketing messages directed to consumers. Consumers defend themselves by deleting, throwing away or otherwise disregarding most of those messages.
Consumers won't throw away a valuable, personalized gift, such as a set of Cutco steak knives monogrammed with their initials.
Although items such as pens, pocket knives and flashlights with a company's logo have their place, they don't have nearly the impact of more expensive items without the logo. The company logo screams self-interest, where items without the logo indicate generosity and caring.
Durable items continue to remind the recipient of your thoughtfulness for years, while gift cards and show tickets make a more short-term impression.
Gifts have more impact when received at unexpected times. Instead of giving a Christmas gift or a thank you gift after a sale, make gifts on other occasions, such as St. Patrick's Day, or "just because."
Making generous gifts obviously makes more economic sense when what your company offers is a higher ticket item and customers and referral sources have a high lifetime value. If a customer generates $20,000 of business every year, you can justify giving a $2,000 cappuccino machine.
Ruhlin doesn't discuss the tax considerations of business gifts. Since the federal tax deduction is limited to $25 each tax year for gifts to a customer (a married couple counts as one customer for this rule), most of the expense is not tax deductible. Form 1099-MISC must be issued for cumulative gifts exceeding $600. With the 50% limit for business meals and the elimination in the Tax Cuts and Jobs Act of 2017 of the federal tax deduction for entertainment expenses, the tax burden of companies involved in heavy selling efforts can be onerous. This issue should be considered, but the leverage of return for investment can be very high. Sometimes you go ahead with nondeductible expenses because they are a business necessity and the right thing to do.
For an addition to your marketing arsenal that can be highly effective, read Giftology.
Buy it on Amazon: Giftology: The Art and Science of Using Gifts to Cut Through the Noise, Increase Referrals, and Strengthen Retention
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