When does ‘thanks for your business’ turn into buying influence?
BBJ photo/NICOLE LANPHEAR
|Tony Moceri of Moceri Construction said his company gives a bottle of Moceri Cellars wine (made by Mount Baker Vineyards) to the owners of the projects they work on as a way of saying thank you.|
It’s easy to think that all gifts given in the context of a business transaction are solely disseminated as a means to spawning future business opportunities. However, this line of thinking isn’t always the case, said Nicole Walker, owner/broker of Fairhaven Mortgage.
Walker said when she gives gifts to her new-homeowner clients, she is not thinking so much about return business as she is about building relationships.
“Creating relationships is really more what it’s about, especially in a small, local business community,” Walker said. “I feel that I’m a part of the community, so I would give a gift to a client like I would give to a friend, or somebody that I’m working with. For me, it’s on that level. It’s not really so much as, ‘Gosh, I hope this is going to make them come back to me.’ It’s not that thought out. It’s to create a relationship for the long haul.”
Gift giving in the private business world has long been a part of workplace culture. However, professionals who choose to give gifts need to examine why they are giving — and if the act is indeed helping them to build stronger professional relationships with gift recipients.
For Cindi Landreth, vice president with A-1 Builders, giving gifts is simply a way to say ‘thank you’ to her customers.
“Gift giving to clients is a ritual of gratitude,” she said. “(It is a way to say) thank you for choosing us to do business with, for trusting us with your investment, and for your patience during this sometimes long and arduous process of designing and remodeling your home.”
Like Walker, the effort is designed to establish a good relationship, and to provide a sense of completion to business dealings.
“In this industry there is a long relationship and then sometimes a brief moment of closure,” Landreth said. “We think about what we might give to each client; what they might appreciate. And we hope they do.”
Sometimes, the gifts transcend the company-customer relationship, and extend to the community, Landreth said.
“There are projects where our annual gifting to Kulshan Community Land Trust is the gift given. Their work focuses on affordable housing. Buying and remodeling a home is a privilege that not all of us have. It’s a way of ‘sharing the wealth’ and being community stewards. There are times when this is the most appropriate gift,” Landreth said.
The act of giving itself cements any relationship, whether business or personal, said Lou Nicksic, president of Nicksic Construction Inc. “It does build stronger relationships and affords both parties the opportunity to retain friendships even after a project is completed.”
And of course, keeping customers happy means they might choose to do business with you in the future, said Doug Wilson, a sales associate with The Muljat Group.
“You want to treat people the way you want to be treated,” Wilson said. “You want people to help you out and take care of you. If you do that, then it comes back.”
The process of giving should be heartfelt and genuine, said Tom Dorr, director of the Small Business Development Center (SBDC) — and not simply be intended to influence.
“Obviously there is a whole bunch of people who feel that gift giving is just a part of buying influence,” Dorr said. “Which I don’t particularly agree with.”
Buying influence isn’t the same as building a professional relationship, Dorr said.
“The purpose for (gift giving) is recognition and further strengthening of relationships, versus a quid-pro-quo-type-of-thing: ‘I scratch your back, you scratch mine,’” he said. An example of this influence: pharmaceutical companies that provide gifts to doctors to encourage the use of particular medicines. These types of gifts can lead down a troubling ethical path, Dorr said.
Ethics of giving
Determining whether a company is in murky ethical territory regarding the issue of gift giving is subjective, Dorr said.
“It absolutely is,” he said. “I kind of use the acid test (to determine compliance with sound ethical standards): If the gift that you are giving was on the front page of the paper, how would that make you feel? Would that be okay, or wouldn’t that be okay?”
Another test to consider: What would your kids think about the exchange?
“What is it that I’d want my kids to learn?” Dorr asked. Other ethical considerations include reporting information for tax-related issues for larger gifts, Dorr said. Smaller gifts, such as restaurant certificates and fruit baskets, are considered de minimis in the eyes of the law, or small and not worth a lot of money.
“The acceptance of gifts is also a point-of-view to consider as well,” Dorr said. Certain professions, such as government officials and journalists, have to be careful when it comes to gifts, he said.
“It’s as much the appearance as it is anything else,” he said.
Companies that include gifts as part of a promotional or marketing strategy are quite common, Dorr said. And as long as they are not discriminatory by nature — such as awarding a certain demographic preference over another — they are ethically acceptable.
“Those are examples of marketing and promotional plans, more so than they are individual recognition or influence-oriented,” Dorr said. “They are more incentive-based for consumers to act, and they are not discriminating on which consumers can participate and which can’t.”
Jim Hassi, director of sales and marketing at Cascade Joinery, said ethical dilemmas must be faced head on and with integrity by businesses.
“On one part, everyone wants to be careful not to create any kind of ethical dilemma in terms of gift-giving.” Hassi said. “I was, for example, approached by a craftsperson who said, ‘Hey, any business you send my way, I’ll give you guys a percentage or a kickback.’ And I said, ‘No, that’s not what we’re interested in. If we designed it and commissioned you to build it, then yeah, we might mark it up to our customer. But if we just send our customer to you, that’s just a referral and we hope that you’d do the same.’ It’s a little bit of a dicey area.”
Personal and customized
The types of gifts that are exchanged vary from industry to industry. For example, in one of Whatcom County’s most booming sectors — home construction — gifts are constantly changing hands.
A sampling of several Realtors, architects and construction companies in Bellingham who were asked what kinds of gifts they give to new-homeowner customers yielded responses running the gamut as far as cost. It should be noted that not all interviewed said they gave gifts to new homeowners.
On one side of the spectrum, gifts such as restaurant certificates, flowers, plants, fruit baskets and movie tickets were the most typical responses, while higher-end gifts included flat-screen TVs, ski trips and even paid Disneyland vacations. Oftentimes, the price of the project seemed to dictate the price of the gift.
One theme that seemed to crop up during conversation was the importance of customization and more personalized gifts. Walker said she tries to identify what her clients would be interested in when choosing a gift.
“They are usually really specific to the borrower. For example I gave a gift the other day because a couple had just had a new baby, and so I gave them something for the baby,” Walker said. “(Giving the gift) was more for the enjoyment and friendship part of it.”
Tony Moceri, operations manager at Moceri Construction in Bellingham, said making the effort to give personalized gifts to clients and professional colleagues is not only good form, but good fun.
“With every customer, we give a bottle of Moceri Cellars Wine,” said Moceri. While the company doesn’t make its own wine for distribution (that comes from Mount Baker Vineyards), Moceri said his father and company founder Paul Moceri used to make his own wine and his own labels — labels which now adorn the bottles given to customers.
“At Christmas time, we usually give all our customers a bottle of wine,” Tony said. “When they finish the home, we usually give them a bottle.”
While the labels are front-and-center on the bottles, Tony said the company doesn’t do it with the intent to promote itself.
“I don’t think that many people see the labels,” he said. “I just think the customers really appreciate it. It’s a lot more personal than a gift certificate to some restaurant. I think it’s just kind of a fun thing to do.”
Establishing solid relationships is important to his company, Moceri said — especially in an industry where reputation rules the day.
“We don’t really advertise at all,” he said. “The majority of our jobs come from word of mouth, both from architects and happy customers.”