Companies are constantly looking for new ways to engage customers with their brands and to build deep and lasting customer–brand relationships. While gifts have been recognized as an effective means to build interpersonal relationships, we find they can also jump-start customer–brand relationships by engaging customers more deeply with the gifted brand. Importantly, in contrast with most of marketing’s relationship-building instruments, encouraging customers’ gifting behavior does not trigger any additional costs, but instead generates instant returns.
A new study in the Journal of Marketing explores the link between gift purchases and customers’ attitudes and future purchase behaviors toward the gifted brand. Our research team conducted a field study with an international retailer of beauty products. Key findings include:
- Gift buyers spend 63% more in the year following a gift purchase than a matched sample of customers who purchase the brand for their personal use.
- Gift buyers increase their purchase frequency by 25%, spend 41% more per shopping trip, and engage in 49% more cross-buying. The sales lift is particularly pronounced among new customers.
- These effects are stronger when customers receive assistance during the
gift purchase process and branded gift wrapping is used.
Here is the story behind these effects. Laden with symbolic meaning, gift purchases create buying situations with special importance for customer identity that offer customers more meaning during the purchase journey. With more at stake, these gift purchases produce a sense of gratitude and public commitment, which deepens the customer’s relationship with the brand and produces positive outcomes, such as stronger attitudes and future purchase behaviors.
Marketing managers can leverage gift purchases as effective relationship marketing instruments in retail settings with a singular brand, such as Sephora or Rituals, using the following strategies:
First, managers should identify products to position as gifts and promote them as such by highlighting selected products in marketing communications and offer incentives for consumers looking for a gift. Second, managers should target new rather than experienced customers with gift purchase promotions, in recognition of the negative effect of purchase experience on the link between gift purchases and future purchase behavior. Third, retail managers should facilitate the gift selection process by training and encouraging frontline employees to assist customers proactively in the gift selection process, to stimulate customer gratitude. Retailers might also develop advanced online filters to help their customers identify an appropriate product for specific gift-giving occasions. Fourth, retailers should make their brand more prominent on gift packaging. By providing high-quality, branded gift packaging, retailers can strengthen their customers’ public commitment to the brand and stimulate long-lasting attitudinal and behavioral performance outcomes. Finally, retailers should encourage existing customers to recommend the brand to their peers for upcoming gift giving occasions.
From: Andreas Eggert, Lena Steinhoff, and Carina Witte, “Gift Purchases as Catalysts for Strengthening Customer–Brand Relationships,” Journal of Marketing, 83 (September).
Go to the Journal of Marketing