Give Yourself the Gift of Brand Loyalty

Each time you persuade a shopper to purchase your brand as a gift for their family member or friend, you add to your profit because of that sale. But researchers at Germany’s University of Paderborn and University of Rostock discovered a significant additional benefit—brand loyalty of the gift giver. Comparing figures over the subsequent year for those who made the purchase for personal use with those who made it as a gift, purchase frequency was 25% higher, shopping trip frequency 41% higher, and cross-buying 49% higher. Together, these resulted in the gift buyers spending 63% more on that brand over the year than did those who had first bought only for themselves.
     Although these figures were for only one brand of one type of product, the data set included more than 84,000 customers from a total of six countries, suggesting this effect is stable. When people buy a particular brand as a gift, they become substantially more likely to subsequently purchase the brand again, either as another gift or for their own use.
     The percentage increases in purchase likelihood are highest for gift givers who are relatively new to the brand and for those who received special assistance, such as branded gift wrapping, when making the purchase. Based on these plus additional findings from their experimental studies, the researchers attributed the effect to the public commitment the gift giver had made to the brand and to gratitude for the special assistance. These formed an identity bond among the brand, the gift giver, and the family member or friend who would be receiving the gift. And people are more likely to give their business to brands with which they identify.
     The implication is for you to encourage gift purchases, especially with marketing directed to those new to your brand. Also offer gift wrapping which shows the product brand in an aesthetically pleasing way.
     However, other research suggests that you limit the special assistance you give. You don’t want to disrupt the valuable identification which comes from personalization. Personalization takes into account the characteristics of the particular individual. When selecting a gift, personalization requires the shopper to think in depth about the recipient and so enables presentation of the gift in an especially meaningful way. Answer the shopper’s questions, but if asked, “What should I pick?,” give as a first answer, “Well, you do know the recipient better than I do.”

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