A gift for a customer can give a company returns far beyond the cost of the present. Companies that strive for "meaningful connections" with their customers are likely to have greater customer retention and obtain repeat business, according to Hallmark Business Connections. Gifts that you give to your customers can have other benefits as well.
Free gifts can be effective vehicles for advertising. For example, if you give a customer a free pen, that pen may be borrowed by other people who will see the name of your business. It could even lead to a conversation-- "Oh, you do business with XYZ Insurance? How satisfied are you with their rates?" As pens are often left in public places, your gift could pass through several hands before it reaches the end of its life. Tote bags, travel mugs, notepads and other products can have a similar effect on your business.
Given a choice between doing business with a company that doesn't give gifts, and one that does, many customers will choose the company that concretely demonstrates its appreciation for its customers.
Give a gift that potential and existing customers will use over and over again, and you'll be helping build your brand. You don't have to give traditional business gifts to build your brand, either. Have a company that specializes in imprinted gifts print or emboss your logo on cookbooks, coasters, playing cards and other products that are likely to be frequently used. If you can connect the gift with the product or service you provide, so much the better. For example, a company that does computer repairs could give its customers a UPC drive with the company's logo printed on it.
Even small gifts have the effect of making the customer feel good. You may have had the experience of going through the drive-through at your bank and have them send a lollipop for your child sitting in the backseat. Even though the treat only cost the bank a few cents, the thoughtfulness likely make you a more satisfied customer.