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Article on corporate gifts by Prof. Paul accepted for publication in JSR


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The article “How Gifts Influence Relationships with Service Customers and financial Outcomes for Firms” by Prof. Dr. Michael Paul, co-authored by PD Dr. André Marchand, Prof. Dr. Thorsten Hennig-Thurau, and Dr. Georg Puchner has been accepted for publication in the Journal of Service Research (Jourqual: A).

Companies spend billions of Euros on corporate gifts. Corporate gifts are benefits that a firm confers voluntarily on its customers, in its attempt to communicate appreciation and gratitude for their past purchases. In contrast to loyalty programs, they do not require recipients to perform any action (e.g., collecting points or miles) to receive them. The authors study the effect of different gift designs on customer perceptions and actual spending behavior. They use data from about 2.000 airline customers—combining a longitudinal field experiment with internal customer database information.

The study results show that corporate gifts can powerfully influence important customer perceptions (e.g., perceived relationship investment) and spending. The authors recommend that managers select economic related (e.g., flight coupon) and social unrelated (e.g., unbranded chocolate heart) gift designs over economic unrelated (e.g., coupons for products from other companies) and social related (e.g., exclusive events with company chairpersons) ones. “In our study setting, economic related gifts work most effectively in terms of revenues and contribution margins, and social unrelated gifts appear most effective for relationship perceptions. In contrast, the economic unrelated gift even decreases revenues, which should inform managers’ decisions when designing gifts and allocating budgets,” says Prof. Paul.

Economic gifts seem to function similarly to other monetary incentives, leading customers to adapt their behavior in the way desired by the company, because their loyalty "pays off". However, managers should be aware that in the long run, repeated (instead of one-time) gifts for customer loyalty might be necessary; otherwise, the reciprocity process could wear out. These findings are situated in theoretical arguments, so they should transfer to other service industries and settings too. Managers may use these findings to design effective gifts and management processes (e.g., gift success tracking).

message of 16.12.2016