In world where it seems that every-thing has been done before, it’s battle in the gift-giving business to come up with something novel. Gift-weary executives with drawers full of pens, paperweights, redundant desk sets and other hackneyed knick-knacks, can get jaundiced about the thank-you process.
On the other hand, some gift-givers (and receivers) rely on the traditional. They feel safe with the reliable but unexciting long-service pen-set or Christmas pudding.
According to Gifts To Remember founder and manager David Hollier, creating memorable gift – and thereby differentiating yourself from the multitudes – is as much about the packaging and presentation as it is about the gift itself.
“The products haven’t changed much. It’s the packaging – how you deliver it – that’s important. The gift may be wine, which isn’t new, but packaged differently. There are ways of presenting that stand out.”
Hollier’s business differentiated itself from the start: “People have lot of ‘things’. I was looking for something different in gift-giving and came up with the concept of giving an experience; something they’d always wanted to try, like flying plane, but never got around to.
“Market research initially told us that something different like this would appeal to younger people, but we’ve found that there is very broad market for it.”
Gifts To Remember, at www.remember.co.nz, sells experiences from facials to adventure plus little of the educational; golf lessons for example. Hollier initially targeted personal buyers but found that corporate clients liked the idea of something different.
“The trick is to grab the attention with the gift. Especially at Christmas when executives are receiving lots of gifts. You want to stand out from the crowd. What better way than to give memorable experience?” he asks.
Gifts To Remember has standard gift package: voucher printed with the gift and recipient name, an information sheet detailing the product or experience or brief selection of options, gift tag that can be written on; and sharp black presentation envelope.
The gift pack can be personalised. It can, for example, be placed inside Christmas cracker (as Hollier arranged for one client), or attached to nibble or treat of some kind. “It [the presentation] is limited only by your imagination. Sending the voucher attached to treat means the recipient gets an immediate reward and the gift has an instant impact.”
Many companies are still conservative in their gift giving, which reflects their approach to business in general. But those with the more successful reward programmes are willing to try something new and differentiate themselves.
Having started small in 1997 with just an Auckland range Hollier extended coverage nationwide and his product range in response to demand. His market developed quickly on the internet among Kiwi expats, and with increasing interest from corporates came demand for incentive and loyalty programmes. He now manages clients’ rewards programmes, setting up and maintaining their websites for them. “We’re very flexible in what we can do and can change the package for each client, working with outside contractors if necessary.”
Erewards: saying thank you online
What started as catalogue business is now more web-based and Hollier has created the brand ‘erewards’ (www.erewards.co.nz) for corporate loyalty and incentive programmes. He didn’t produce hard copy catalogue last year and is currently debating whether to do another one now. “The catalogue is useful where dollar-based voucher is provided and the recipient needs to decide what they want, or if they don’t have web access.”
He has created specific catalogues for corporate clients, with just the range of rewards they want.
“With staff or client incentive programmes we usually create launch document when the progamme starts which explains the dynamics of the programme – how to earn points, how to redeem rewards, how to find out how many points you have and what rewards are available.
“We back this up with customised website to support the programme. That is generally branded as the client’s website, although totally maintained by erewards. Most programmes are also supported by email marketing to participants,” explains Hollier.
“Staff incentive programmes work really well. One insurance company introduced programme for their sales staff and increased their sales by nearly three times what they’d predicted.
“But you’ve got to get the incentive right; match it to the market. Some companies know their target market well and some not at all. It’s good to be able to talk to those who will be participating in the programme (to find out what will push their button) but we don’t often get the chance.”
He says it’s important to keep the programme simple: “I do this and I get this. Simple works better than complicated. Clients sometimes experiment; change the formula as they go along to work better.”
Profit drives incentive programmes
Incentive and reward programmes are not about “warm fuzzies and free toasters”, according to Simon Rowles, the new head of Carlson Marketing Group (NZ). They’re business issue; “Companies need to invest in getting people on board,” he says.
“You get 127 percent of your profit from 30 percent of your customers if you are retailer. That figure climbs to 160 percent from the top 30 percent if you’re mortgage lender. You need to find out who they [the 30 percent] are and how to ‘incent’ them.” It therefore follows, goes his argument, that there are customers you’d be better without. You use that insight to improve companies’ bottom line, and thus returns to shareholders.
“The biggest driver for incentive programmes is profit,” claims Rowles. When companies come to Carlson wanting to increase profit, the two parties go through process, he explains: What causes profit? What is the company’s objective? What is the customer segment they wish to target? What behavioural change do they want to effect? “Then together we build strategy.”
The US Carlson Group (the biggest marketing services agency in the States) last year bought Peppers & Rogers, “the McKinsey of marketing strategy”, taking Carlson into new league of deep strategic thinking capability, Rowles enthuses.
However there are some clients who simply want to reward their clients or staff. “We make sure that this is what they want (rather than an incentive programme), go through the costs and what the return will be.”
He says that what companies approach Carlson for depends on their level of sophistication. “Many (who come for incentive strategies) are small players, often family-owned and return rates are very important. They are often in commodity industries and are under threat. Their margins are being thumped or they’re losing volume; their best customers are being picked off and there’s consequent decline in profit.
“They want to distinguish themselves. The solution can be very simplistic and easy to start.”
Mass market customer incentive programmes – like Fly Buys – work concedes Rowles, but there’s no differentiation between big and small spenders; everyone’s treated the same, he says. “Programme participation is usually cost rather than an investment producing return. Customers cost money to acquire and to keep. Logically companies should focus on those that produce the best shareholder returns.
“We can ‘incent’ people to behave in certain way.” He gave an example of credit card programme Carlson developed for client that produced 60 percent lift in sales volume. However he says there is limited demand for CRM in this market. “It’s not yet got grip here, although some of the large multinationals are using it.” Many of those multinationals are in financial services; sector that accounts for 25 percent of New Zealand’s GDP.
The internet has transformed the way Carlson’s programmes are implemented. “Much of our work now is done online. It’s very dynamic process; one of ou
