This great article was sent to me by a friend. It is SPOT ON when it comes to gifts!
You want to make a lasting impression on your client at the end of a transaction, but it could be the wrong kind if you’re not paying attention.
Showing thanks to your clients with a closing gift is a traditional way many real estate professionals seal up a transaction. A closing gift not only serves as a special treat to your home buyers and sellers, but it can also help make you more memorable long after a transaction ends. After all,expressing gratitude can be a powerful motivator in getting clients to use your services again down the road, studies have shown.
But even with the best of intentions, your gift-giving gesture can backfire if you’re not careful. Here are some closing gift offenses to avoid:
- Making it all about you: That engraved wall clock with your company’s logo etched in the middle really is the perfect gift — for you. Your intention is that your client will remember you every time they glance at the time. But in all honesty, what’s the likelihood that a clock with your name plastered all over the front will end up tucked away in their attic? “It’s not about you,” says sales coach Liz Wendling, who works with real estate companies on maximizing their business potential. “Make your gift client-centered, not agent-centered. If you give them a gift that is egotistical or something they won’t enjoy, it isn’t going to be used to remember you by.” You needn’t have your name and logo in all caps all over your gift for them to remember your kind gesture. As long as it’s a thoughtful gift, they’ll remember you, Wendling says.
- Not listening: You’ll miss the opportunity to give your clients a truly heartfelt gift if you don’t tune in to their likes and dislikes. “When you’re driving around with them showing properties, they may mention a favorite restaurant — which you could give them a gift card to — or maybe how they’ll be taking a cruise soon, and you could give them money to spend for that,” Wendling says. “Clients are dropping hints all the time. This is one way you can make yourself more memorable, by giving them a gift from listening closely to their likes and dislikes. They’ll feel even more touched by your gesture.”
- Choosing the wrong time to give: Traditionally, the closing gift is something agents present to clients right after closing. But you may find they’ll appreciate your gift even more if you wait. “A gift can lose its impact if it’s not delivered in the right place or the right time,” Wendling says. If your clients just purchased or sold a house, they undoubtedly have a lot on their minds after closing. Your gift could wind up in a stack or pile that gets overlooked later on. Instead, consider giving them a gift 30 days or even 90 days after closing. It provides a perfect way to follow up and get face-to-face with them again.
- Not giving the gift in person: Sending your gift in the mail or leaving it at your clients’ doorstep means you’ll miss a perfect excuse to deepen your relationship by checking on how they’re doing. You’ll also be passing up an opportunity to ask for referrals, Wendling says. Contact your clients and say: “I bought a gift to thank you for your business, and I’d like to drop it off in person.” This is where you can weave in asking for a referral in a nurturing, kind way. You’re not just asking for five friends they can connect you with. Instead, you’re using the gift as a subtle way to meet with them again and throw in a “by the way, if you happen to know of anyone else I can help, please send them my name.”
- Deducting too much — or not enough — on your taxes: The IRS allows you to deduct some of your business gift-giving, but make sure you stay within the legal limits for your deductions. Check out IRS Publication 463 for the guidelines. In general, you are allowed to deduct no more than $25 for business gifts to each person during a tax year. **see note
- Accidentally offending your client: A gift of wine would be the wrong choice for a recovering alcoholic or someone who doesn’t drink due to religious reasons. Your gourmet sweets also may be a bad choice for someone with an allergy to nuts or dairy. To play it safe, Wendling recommends giving your customers a choice of three gifts. At the end of closing, say: “I usually like to give my clients a little gift after they do business with me. I often do one of three things; which one would you like?” By allowing them to select the gift from your three options, they may be more appreciative of it, and you don’t have to fear you gave the wrong gift.
- Not giving anything: “You don’t have to spend a fortune,” Wendling says. “You give based on what you can afford and what you think it’s worth.” Yet some real estate professionals are adamant that they shouldn’t be expected to give a gift in return for their service. Like it or not, closing gifts have almost become an expectation among many buyers and sellers. Giving nothing could backfire and may make some clients feel snubbed, Wendling says.
You can avoid all of these closing-gift mistakes, but remember that your client’s satisfaction doesn’t rest on it. “Honestly, they’ll remember you much more by how you treated them than by your gift,” Wendling says. “But you’re using a closing gift to build your reputation, showing thoughtfulness and using it as another opportunity to connect with your clients on a deeper level.”
**I would like to add one caveat here. If the item is branded with your company info, it is also considered marketing. You may be able to write-off 100% of the expense under marketing or split between "gift" and "marketing". Tax laws change every year, you should seek the advice of a CPA to determine the possible write-off eligibility of your expenses.