MBA2266 Do Gifts Work in Business?

Summary

The $100 MBA Show: Episode MBA2266 – Do Gifts Work in Business?

Host: Omar Zenhom
Release Date: March 16, 2023
Podcast Description: Awarded Best of Apple Podcasts, The $100 MBA Show delivers practical business lessons for the real world. Host Omar Zenhom shares lessons, strategies, and insights from over 20 years of entrepreneurship, offering actionable advice on everything from idea validation to marketing, sales, and reinvestment.

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Introduction

In episode MBA2266 titled "Do Gifts Work in Business?", Omar Zenhom delves into the nuanced role of gift-giving within business relationships. He explores whether gifts are an effective tool for strengthening client relationships and increasing referrals or if they risk being misconstrued as bribes. Drawing from personal experiences and expert insights, Omar provides a comprehensive analysis of the strategic use of gifts in the business realm.

The Importance of Gift Giving in Business

Omar begins by highlighting the scarcity of discussions around gift-giving in business contexts. Recognizing its potential impact, he seeks to uncover whether this practice genuinely enhances business relationships or if it falls flat.

[01:10] Omar: "Gift giving is just about building relationships. It's about seeing the long-term investment you're making with every single client, one on one."

Key Principles for Effective Gift Giving

Timing Matters

One of the primary concerns Omar addresses is the possibility of gifts being perceived as bribes. To mitigate this, he emphasizes the importance of timing:

[02:30] Omar: "Timing is really important when it comes to gift giving. It's more effective to give gifts after you're already doing business, not before."

By delivering gifts post-engagement, the gesture is framed as a token of appreciation rather than an enticement.

The Element of Surprise

Omar underscores the significance of unexpectedness in gift-giving. Predictable gifts tied directly to business transactions can diminish their impact.

[04:15] Omar: "A gift is something you give with no expectation of anything in return. It must be genuine to foster a stronger relationship."

He illustrates this by sharing experiences where unexpected gifts left lasting impressions, enhancing client loyalty and satisfaction.

Omar's Personal Experiences with Gift Giving

The Dan Martell Example

Omar recounts receiving a thoughtful gift from Dan Martell, his long-time business coach. After their coaching relationship concluded, Dan sent a set of engraved kitchen knives—a gesture Omar did not anticipate.

[03:50] Omar: "It was really memorable because it was a physical gift and a surprise. It left a mark and kept Dan top of mind when recommending him to others."

This unexpected act not only cemented their relationship but also positioned Dan favorably in Omar's professional network.

The Ozcon Event Goodie Bags

Organizing the Ozcon event in Australia, Omar and his co-founder Nicole distributed goodie bags to attendees embarking on a snowy retreat. These bags contained practical items like water bottles, hand sanitizer, mints, and beanies.

[05:45] Omar: "Even though they were small, simple gifts, everybody commented on how they loved this and used everything in the goodie bag because it was so useful and practical."

The positive feedback underscored the effectiveness of thoughtful, utility-based gifts in enhancing participant experience and satisfaction.

The Spencer Fry Gesture

Omar shares a personal anecdote about gifting Spencer Fry, a friend and business associate, a Kobe Bryant coffee table book. This gesture was purely out of gratitude for Spencer's support.

[07:20] Omar: "I did it because I don't want him to say that was a waste of time. I hoped to show appreciation and strengthen our professional relationship."

This act exemplifies how small, personalized gifts can foster goodwill and encourage continued collaboration.

Impact of Gift Giving on Business Relationships

Omar articulates how gift-giving transcends transactional interactions, fostering deep, meaningful connections. He draws parallels between personal friendships and business relationships, emphasizing the human element in professional settings.

[06:10] Omar: "Customers are working with a whole lot of businesses. If you want to stand out, give a little something so they can remember you."

Gifts serve as tangible reminders of a positive interaction, enhancing client retention and advocacy.

ROI and Long-term Benefits

Addressing the return on investment, Omar asserts that the true value of gift-giving lies in relationship building rather than immediate financial gains.

[07:55] Omar: "It's about improving the quality of your relationships with your customers, with your clients, with your partnerships."

He emphasizes that cultivating strong relationships through consistent, thoughtful gestures leads to sustained business growth and loyalty.

Practical Tips for Implementing Gift Giving

Omar offers actionable advice for integrating gift-giving into business practices:

1. Start Small: Begin with modest, thoughtful gifts that align with the recipient’s interests or needs.

2. Personalization: Tailor gifts to reflect the recipient’s preferences, enhancing the gesture's sincerity.

3. Consistency: Regularly incorporate gift-giving into business routines to maintain and strengthen relationships.

[08:30] Omar: "Start small. You don't need to spend a lot of money. A $20 or $30 gift can make a significant impact if it's thoughtful and unexpected."

Expert Insights: John Rulin and 'Giftology'

Omar references John Rulin’s book, Giftology: The Art and Science of Using Gifts to Cut through the Noise, Increase Referrals, and Strengthen Client Relationships and Retention, as a foundational resource on effective gift-giving strategies.

[01:50] Omar: "John Rulin taught me that gifts should be unexpected and given without any transactional expectations."

Rulin’s principles reinforce Omar’s own experiences, advocating for strategic, genuine gifting to enhance business interactions.

Conclusion: Intentions Matter

Omar wraps up the discussion by stressing the importance of intent behind gift-giving.

[08:55] Omar: "Check your intentions and make sure they're in the right place. Gifts should be about appreciation, not about expecting something in return."

Aligning intentions with genuine appreciation ensures that the gesture is perceived positively, fostering stronger business relationships.

Recommended Resources

• Book: Giftology by John Rulin – A comprehensive guide on using gifts strategically to enhance business relationships.
• Websites: For those interested in further exploring Omar’s insights and business strategies, visit 100mba.net.

Final Thoughts

Episode MBA2266 offers a compelling exploration of gift-giving as a strategic business tool. Through personal anecdotes, expert insights, and practical advice, Omar Zenhom convincingly argues that thoughtful, well-timed gifts can significantly enhance business relationships, increase client loyalty, and differentiate a business in a competitive marketplace. The key takeaway is that the sincerity and intent behind the gesture are paramount, ensuring that gifts serve as meaningful tokens of appreciation rather than opportunistic bribes.

Transcript

[A]

Got a 7am meeting on a Monday expensing breakfast because it's in policy wasting all afternoon submitting an expense report for that breakfast. If your company used Ramp, you could submit expenses with just a text.

[B]

Yay. Free your team from expense reports today. Switch your business to ramp.com hey oh. Welcome to the hundred dollar MBA show business insights you can count on every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's lesson you will learn Do Gifts Work in Business? Gift giving Sending a little something to your clients or your potential partners that you want to partner up with in your business. Does this actually work or is it a big waste of money? Or could it be even misunderstood as a bribe? Is there a right way to do this? Is there a wrong way to do this? What are some of the best practices and what can you expect by giving gifts to others in business? This is a very interesting topic because not a lot of people talk about it. That's why I wanted to address it in an episode here on the podcast. I'm going to share with you my own experiences on both sides of the gift and tell you what I've learned in my experiences, what some of the experts in this topic, in this idea of gift giving say about how it can help your business. So let's get into it. Let's get down to business. A few years ago I had dinner with a guy named John Rulin. John is the author of a book called Giftology the Art and Science of Using Gifts to Cut through the Noise, Increase Referrals and Strengthen Client Relationships and Retention. That's the subtitle of the book. I remember asking John about 30 million questions at that dinner because I always wondered, is giving gifts faux pas? Is there a right way to do this? How can I improve upon my style when it comes to giving something to my clients to say thank you? And he gave me a few pointers and I started implementing his ideas that he shares in his book. And I want to share with you what the results were when I implemented them. The first concern I had was is this going to be seen as a bribe? I don't want the customer or the potential business partner or partnership to think I'm saying, hey, please work with me or please do business with me. Here, here's a little gift in exchange for you to Be convinced or to say yes to this partnership. And what John said is timing is really important when it comes to gift giving. And one of the things I learned from him and implemented is it's actually more effective to give gifts to clients or anybody in business after you're doing business, after you're working together, not before you already got what you wanted, meaning you already secured the customer or you already secured the deal with a partner. So the gift can't be seen as a bribe. It's more seen as a thank you. And that's really where the power of gifts in business really shines. The second thing he mentioned is gifts should be unexpected, Meaning you don't tell them that, hey, if you sign up with me, if you work with me, I'm going to give you this, because that becomes part of the transaction, that becomes part of the deal. That's what they're expecting. And it's not seen as a gift. A gift is something you give with no expectation of anything in return. And that's really important in order for this to work. You can't think that by giving a gift you should be getting something in return. You got to see this as a part of building a relationship and saying thank you. So, for example, sending out maybe some company swag a T shirt to a customer when they sign up as a client, you might click their mailing address. When you sign them up as a client, they're not expecting this gift. They get this in the mail with a nice little note. It's a nice little surprise, and it makes an impact. And what I found, when I send unexpected gifts to clients or anybody I'm doing business with, it really puts a smile on their face. And their appreciation of this gift, just from a relationship point of view is exponential. It's so much more than when they're expecting it. And the more unexpected, the more the impact. Let me give you an example. On the receiving end, I received a gift from somebody I worked with, Dan Martell, who was my business coach for a very, very long time. After my coaching and training was done with him, and we said, best of luck and it was great working with you. He surprised me and Nicole with a gift, got in the mail, wasn't expecting it. It was a beautiful set of knives that we can use in our kitchen. It had an engraving in the knife. And it's very memorable, not only because it's a physical gift and it was a surprise, but it was really a surprise because you're really not expecting a gift every after your business Relationship is done. But this leaves an impression. Now, if anybody asks me, hey, I'm looking for a SaaS coach. I will not hesitate to recommend Dan, not because of the gift, but because I remember Dan. It left a mark and he's top of mind. Nicole and I run an event called Oscon, which is in the snow here in Australia. Yes, we get snow here during the winter and it's for business owners here in Australia that want to meet other amazing business owners. Sort of like a little mini retreat. Last year when we were starting the whole trip and we're loading up the van so that we could head down to the snowy mountains, we surprised every new attendee with a little goodie bag. And these were very small gifts, not expensive, but because it was unexpected, it was a nice little touch and people really loved them because there were things they can actually use. A bottle of water, hand sanitizer, mints, and an Ozcon beanie. Because we're going down to the snow, it's going to be cold. And even though they were small, little simple gifts, everybody commented on how they loved this and they used everything in the goodie bag because it was so useful and practical. Now you might be thinking, omar, this sounds great and nice and all, but what does this mean in terms of an ROI for my business? Well, gift giving is just about building relationships. It's about seeing the long term investment you're making with every single client, one on one. And let's just be honest, when somebody gives us a gift, we remember them, they have a little bit of a special place in our heart. Let me give you an example. Let's say you invite a bunch of friends over for your birthday, a birthday party. Let's say you invite 10 friends and three of your friends come with gifts. It's not like you're going to dislike the seven other friends. You're happy they came and they're still your friends, but those three friends that thought of you, got you a card, got you a gift, even if it's just something small, they have a special place in your heart. You can't help it. As human beings, we have this feeling of reciprocity. Even if you reciprocate in just liking them more and it sends a signal that this person just goes the extra mile, is thoughtful. Now customers, they are shopping around, they're working with a whole lot of businesses, a whole lot of vendors, a whole lot of different transactions throughout their business, throughout their days, throughout their years. If you want to stand out, if you want to remember, you want them to be a customer for a long period of time, giving a little something to them just so they can remember you. And for you to stand out against everybody else who doesn't do this is going to go a long way. If you want to get into this, my recommendation is start small. You don't need to spend a lot of money, 20, $30, and you don't need to do it just with your customers. You could do it with anybody that you work with or have a relationship with in business. For example, I got on a call with one of my friends in business, Spencer Fry. He runs Podia, which is a great course platform. We exchanged ideas and we got to know each other and I just really enjoyed the fact that he took the time out to speak to me on a call. I knew that he was a huge Kobe Bryant fan, so I sent him Kobe Bryant's book. It's like a picture book, a coffee table book that you can put as a centerpiece in your living room. It cost me 20, $30 on Amazon. Pretty insignificant. And I did it just because I was thankful. I wasn't expecting anything in return. And I'm not hoping that, you know, Spencer is going to be my best friend for life. I did it because I don't want him to say, man, that was a waste of time. I regretted it. Next time Omar asked me for my time, I'm going to say no. I'm going to show him at least I appreciate him that much to think of him and get him a gift because I hope that he'll answer my calls in the future and we can continue to have a relationship. That's my hope. If it doesn't happen, that's still okay. Again, I'm looking at the long term results and you got to keep doing this over and over and over and look at the aggregate results in terms of the quality of your relationships. It's not tit for tat. It's improving the quality of your relationships with your customers, with your clients, with your partnerships.

[A]

Got a 7am meeting on a Monday expensing breakfast because it's in policy.

[B]

Yay.

[A]

Wasting all afternoon submitting an expense report for that breakfast. If your company used Ramp, you could submit expenses with just a text.

[B]

Yay. Free your team from expense reports today. Switch your business to ramp.com so to answer the question, do gifts in business work? Well, they work in a sense that it strengthens your relationships, it increases word of mouth referrals, it allows you to stand out and honestly just feels good to be able to Give back and say, hey, I appreciate you. Here's something small to show a token of my appreciation. If you want to geek out on this topic, Giftology is a good book by John Rulin. That's John R U h L I N. But you can just get started. Look at your best clients in your Rolodex, in your CRM who spent the most in the last year. Send them a small gift saying, thanks for being an amazing customer. Unexpected. It could be some flowers, it could be some chocolates. It could be a gift certificate to movie theaters or Amazon. I'm not a huge fan of gift certificates because it's nice to get an actual gift in the mail and there's some thought behind it, but that is still better than no gift. And you can add a little note saying, hey, I didn't know your size or your favorite color, so I got you this instead. Thank you so much for listening to the $100 MBA show. If you love this podcast, if you want to support us, the best thing you can do is share it. Share it on social media right now. Send people to 100- MBA-NET and let them know this podcast rocks. Thank you so much in advance for doing that. And thank you so much for doing that right now and spreading the word. Before I go, I want to leave you with this. So much of business is intentions. What is your intention with giving a gift? If you're giving a gift so that you can say thank you, so you can build a relationship, so you can strengthen relationships, awesome. If you're giving gifts because you are trying to get something in return, that, in my opinion, never really works well in the long run. And it's not something that you can invest in and do consistently over time. Check your intentions and make sure they're in the right place. Thank you so much and I'll check you in Tomorrow's episode Freeride Friday. I'll see you then. Take care. And we're back, folks. It looks like Jim from sales just got in from his client lunch and he's got receipts. His next meeting is in two minutes. The team is asking, can he get through his expenses in that time? He's going for it. Is that his phone? He's snapping a pic. He's texting around. Jim is fast, but this is unheard of. That's it. He's done it. It's unbelievable. On ramp, expenses are faster than ever. Just submit them with a text. Switch your business to ramp.

[A]

Com.