RESEARCH IN BRIEF Exploring the Effectiveness of Business Gifts: Replication and Extension

Richard F. Beltramini
This investigation replicates Beltramini's (1992) study of the effectiveness of business gifts, and extends the research to include actual marketplace sales response. A company's customers'perceived satisfaction and intention to continue repurchasing are surveyed hoth before and after being sent a more expensive gift, a less expensive gift, or no gift at all, and customers' actual sales are longitudinally tracked. The results indicate business gift-giving represents an effective part of a marketer's overall marketing communications strategy, and both limitations and implications are discussed.

Richard F. Beltramini (Ph.D., University of Texas at Austin) is a Professor of Marketing at Wayne State University, MI. This research was made possible in part through a research grant from the Promotional Products Association (special thanks to Ray Finfer) and the cooperation of the Spillman Company (special thanks to Thomas W. Coniglio).

Business gifts provide a token of appreciation for past business and underscore the giver's desire to maintain established customer relationships. Although widely used today, very little is known about their effectiveness. In a controlled field experiment, Beltramini (1992) found business gifts to be generally effective in increasing customers' positive perceptions toward products, yet somewhat less so in increasing their reported likelihood of actually contacting the gift-giving business to purchase the products tested. However directive, it was still not possible to directly link the giving of business gifts to actual marketplace behavior (i.e., sales), yet obviously such results represent a far more ideal result to both researchers and practitioners in this area.

Background
Business gift-giving builds on the foundation of reciprocity theory, which says that giving can lead to a recipient's perceived sense of obligation to return the favor. Cialdini (1985) and others have noted this perception increases with the perceived magnitude of the gift in most cases, although Regan (1971) also found the giving can actually stimulate a reciprocal need to return more than what was received. So business gift-giving seemingly affords the potential for use as a solid business investment. Recipients are motivated to restore equilibrium in their relationship with givers, enhanced by a variety of conditions. For example, De Paulo, Brittingham and Kaiser (1983) found that it is important that the recipient view the gift as appropriate to the relationship between the giver and the receiver. Others have added that the gift should be seen as a subtle surprise, yet deliberately intended specifically for the recipient (e.g., Nadler, Fisher and Itzhak 1983). Thus, business gift-giving should reflect these considerations to maximize their potential in stimulating customers not only to feel rewarded for past business, but also tactfully induced (i.e., not manipulated) to continue doing business with the giver. Business gift research, and to an extent the larger body of business research, has been criticized in the past for not building a replication tradition to expand learning (e.g.. Brown and Coney 1976; Hubbard and Vetter 1992;

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The Journal of Advertising to receive either the gold library set, the silver library set, or no gift at all. All study subjects received a letter of appreciation for their past business, identifying the study's industry partner as the business gift giver. Still another month later, a post-gift questionnaire (identical to the pre-gift questionnaire) was mailed to the same 243 customers. A total of 92 useable questionnaires (approximately 38 percent response) were returned to the same researcher's address by the same cutoff period. A double-blind coding procedure allowed covertly matching respondents' pre-gift and post-gift survey measures with the actual sales of these customers during each phase of the study (post-gift sales measures were unobtrusively obtained two, four and six months after customers received the business gifts). Thus, identical pre-gift and post-gift survey measures of "satisfaction" and "intention to purchase" plus covert measures of "actual sales" were obtained, with additional post-gift covert measures of "actual sales" obtained two, four and six months after the gift-giving to track longitudinal changes in actual marketplace behavior.

Reid, Soley and Wimmer 1981). While some social sciences have encouraged replication and extension research, business researchers have not, according to Kane (1984). Yet it seems appropriate to expand upon earlier findings where possible to provide ongoing contributions to our understanding of such phenomena (Rosenthal and Rosnow 1984). The objective of this investigation, therefore, is to replicate Beltramini's empirical results, and to extend beyond affective and behavioral intent outcome measures, exploring linkages to actual marketplace sales behavior among gift recipients under actual field conditions. Further, it is intended to build upon earlier results by utilizing a series of longitudinal posttests to track potential changes over time. Thus, the investigation provides a balance between design limitations and resources, and allows ecological validity and reliability.

Methods
In this replication study, the cooperation of a large industrial manufacturer of construction products that has utilized business gifts in the past was secured, allowing for differential gift manipulations among their confidential customer lists and for multiple measures. In Beltramini's (1992) study, a single business gift (leather business card holder) at an approximate $10.00 retail value was utilized in a Solomon fourgroup design. However, in this investigation, since t5T)ical business gifts have at least doubled in value since then (according to industry estimates), two business gifts (a gold letter opener/scissors library set [$40.00 retail value] and an identically designed silver version of the same library set [$20.00 retail value]) were selected as appropriate, based on business use, unisex appeal, and ease of mailing (nonperishable) characteristics, and the fact that they had not been used previously by the study's industry partner or its competitors. A pre-gifl mail survey measure of 1,142 customers assessed overall satisfaction and intent to purchase productsfromamong several industry competitors (including the study's industry partner), holding out a small sample of non-study customers for comparison purposes. A total of 243 useable questionnaires (approximately 21 percent response) were returned by the predetermined cutoff date addressed simply to "University Research Study" in a city other than that of any of the competitors included on the questionnaire. One month later, these 243 respondents were randomly assigned to equal-sized experimental subgroups

Key Results and Discussion

Overall pre-gift satisfaction measured an average 3.86 and intent to purchase 3.94 (both on seven point scalar measures identical to those utilized in the 1992 study), with no significant differences between the gift groups. Post-gift measures increased significantly (p<.05) fbr the gold group (recipients of the $40.00 gift) to an average 4.29 for overall satisfaction and 4.74 for a mean behavioral intention to purchase products. Post-gift measures for the silver group ($20.00 gift recipients) remained essentially the same at 3.68 for mean satisfaction and 3.79 for mean purchase intention. Post-gift measures for the no-gift group declined slightly to 3.00 for mean satisfaction and 2.86 for mean intention to purchase. These patterns of ANOVA results generally replicate those of Beltramini's (1992) study. Perhaps more importantly, this pattern of results was found to hold when percentage changes in sales among individual groups were compared (absolute sales levels are not included here per the confidentiality policies of the study's industry partner). The gold group's actual sales volume significantly (p<.05) increased by 495 percentfromthe pre-gift measure to the "two months after receipt of gift measure," by a cumulative 500 percent by the "four months after receipt of gift measure," and by a cumulative 615

Summer 2000 percent by the "six months after receipt of gift measure." The silver group's actual sales volume decreased by 30 percent at the two month measure, but increased by a cumulative 8 percent by the four month measure, and increased by a cumulative 49 percent by the six month measure. And finally, the no-gift group's actual sales decreased by 44 percent at the two month measure, and by a cumulative 58 percent by the four month measure, but later rebounded to a cumulative 43 percent above the pre-gift level by the six month measure. Thus, the gold group (recipients of the $40.00 business gift) evidenced an immediate positive increase in sales, and sustained this positive impact for the duration of the study. The silver group (recipients of the $20.00 business gift) evidenced a lagged positive increase in sales after an initial decline in sales, reflective of an unanticipated corporate downturn noted among a hold-out sample of non-study customers during this time period. And, the no-gift recipients (recipients of the letter of appreciation only) evidenced a sustained decrease in sales, not only reflective of the corporate downturn, but also continuing through the four month measure before returning to equilibrium with the holdout sample at the six month measure.

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Conclusions, Limitations and Implications

The more expensive (gold) business gift was relatively more effective in generating an immediate, positive, and sustained increase in customer overall satisfaction, intent to repurchase, and actual sales behavior than the other groups tested. The relatively less expensive (silver) business gift did not generate significant increases in customer attitudes when tested, but did eventually generate a lagged, positive increase in actual sales behavior. And the no-gift group actually realized a slight decrease in customer attitudes, and a decrease in actual sales behavior, before returning to levels reflective of overall company sales. In short, as reciprocity theory predicts, the more significant the gift, the stronger the sense of obligation; and the stronger the perceived obligation, the stronger the urgency to restore equilibriiun. This study was limited by the use of two business gifts subjectively selected as appropriate, and given the design, it was also virtually impossible to quantify non-response bias without negatively impacting the relationship between the study's industry partner and its actual customers. Further, despite the balance of experimental controls employed in this nationwide field context, it is perhaps possible that a

few customers in the different experimental groups might conceivably have heard about the business gifts other customers had been receiving, and were initially disappointed in receiving the less impressive (silver) business gift, or in receiving no gift at all. And it may be further speculated that these disappointed customers affected a temporary decline in their sales by postponing product orders for a period of time. The "hare" increase in the gold group's ssdes contrasted markedly with the sales patterns of both the silver and no-gift groups. But the silver group's "tortoise" rebound followed to outpace no-gift customers, who did not return to follow overall company sales trends until later. Marketers considering the use of business gifts can utilize thesefindingsto direct their future marketing communications programs with several lessons learnedfromthis investigation. While the first lesson learned (that relatively more expensive business gifts contribute more positively to customers' attitudes than do relatively less expensive business gifts) might have been anticipated as intuitively obvious, this study contributes additional direction in terms of the appropriate timing of business gifts. A second lesson learned, therefore, reveals that marketers seeking an immediate and sustained increase in marketplace response should utilize a more expensive gift, but when lesser resources are available, a relatively less expensive business gift still contributes more positively to marketplace response than no gift at all, albeit in a potentially delayed fashion. As interest in business gifts continues to grow (e.g., Feder 1998; Gines 1998; Myers 1998), it remains important to reiterate Beltramini's (1996) earlier caveats on conditions under which gift-giving effectiveness is enhanced: 1) the gift should be consistent with ethical codes of the recipient's organization, 2) the gift should be deliberately (not accidentally or globally) sent to each recipient, 3) recipients should be surprised with an unexpected, valued gift, 4) the gift should not show overly luxurious demonstrations of wealth or free-spending extravagance; and 5) the gift should be subtle, rather than a transparent, calculated, or manipulative expectation of reciprocal obligation. Despite these replicated and extended findings, however, clearly additional opportunities for empirical research in this area exist, assessing altemative measures of effectiveness of business gift-giving.

References
Beltramini, Richard F. (1992), "Exploring the Effectiveness of Business Gifts: A Controlled Field Experiment," Journal of the Academy of Marketing Science, 20, 87-91.

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(1996), "Business Believes in Gift Giving," in Cele Otnes and Richard F. Beltramini, eds.. Gift Giving: A Research Anthology, Bowling Green, KY: Popular Press, 163-173. Stephen W. Brown and Kenneth A. Coney (1976), "Building a Replication Tradition in Marketing," Kenneth L. Bemhetrdt, ed.. Marketing: 1776-1976 and Beyond, Chicago: American Marketing Association, 622-625. Cialdini, Rohert B. (1985), Influence: Science and Practice, Glenview, IL: Scott, Foresman and Company. DePaulo, Bella M., Gregory L. Brittingham and Mary Kister Kaiser (1983), "Receiving Competence-Relevant Help: Effects on Reciprocity, Affect, and Sensitivity to the Helper's Nonverhally Expressed Needs," Journal of Personality and Social Psychology, 45, 1045-1060. Feder, Hillary (1998), "Solving the Giving Puzzle," Potentials in Marketing, July, 21-25. Gines, Karen (1998), 'The Guide to Corporate Gift Giving," Incentive Magazine, August, 1-28. Huhhard, Raymond and Daniel Vetter (1992), "The Puhlication Incidence of Replications and Critical Commentary in Economics," The American Economist, 36, 29-34.

The Journal of Advertising

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