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BusinessColumnistsJamie Herzlich

Small Business: How much should be spent on holiday gifts?

Many businesses see holiday gift-giving as good customer

Many businesses see holiday gift-giving as good customer relations. However most don't want to break the bank. This gift was being wrapped on Dec. 4, 2010 at La Favorita in Williston Park. Credit: Allison Davis O'Keefe

Many businesses look to the holidays as a time to reconnect with clients and thank them for their business with a gift.

But that doesn't mean they want to break the bank.

Nearly three quarters of companies will not increase their budgets for corporate gifting this holiday season, according to a survey by the Advertising Specialty Institute.

"In general, most companies' spending patterns for 2014 for holiday gifts are going to remain unchanged," says Nate Kucsma, director of market research for ASI, a Trevose, Pennsylvania-based organization serving the $20.5 billion promotional products industry. "The economy is certainly a big factor."

Among those companies anticipating a change in spending, 19 percent said they planned to increase expenditures while only 7 percent planned to cut back, according to ASI. For those companies increasing spending, the average will jump to $43 per customer/prospect vs. $33.92 last year.

"The fact that more clients are looking to increase spending than decrease is certainly pointing in the right direction," says Kucsma.

Holding steady. Locally, experts said they found gift giving will maintain the status quo.

"Spending is staying the same as last year," says Lisa Chalker, president of Family Affair Distributing in Massapequa, which specializes in imprinted promotional gifts.

Some clients may be tweaking their lists, but not increasing budgets, she notes. "They may do less of one tier and more of another, so it balances out," says Chalker.

Marc Morrell, president of Morrell Printing and Design in Medford, a printing and promotional products company, agrees that, for the most part, companies are staying consistent with last year.

Getting practical. In terms of gift requests, he says "the focus this year is a little more on usable items" -- gifts that will stay on a person's desk longer and are practical, such as coasters and notepad accessories.

In the ASI study, companies listed attractiveness, durability and utility/usefulness as the top three attributes they consider when choosing promotional gifts, says Kucsma. "They're raising the quality of what they're giving as opposed to the quantity," he notes.

Food is always popular. Specifically, the most popular gifts for customers or prospects this holiday season are food/beverages, desk accessories, writing instruments and calendars, according to ASI.

No surprise on food, says Chalker. "It's a fun thing, and it's shareable." She's putting together numerous food baskets this holiday season ranging in price from $40 to $150 per basket.

They're well received, which is one of the reasons that Capogna Orthodontics in North Massapequa sends them to clients.

"People always call and thank us for the baskets," says Jamie Irvine, marketing coordinator for Capogna, which uses Family Affair Distributing for its baskets.

This year, Capogna will send 50 to 75 holiday food baskets to patients, spending about $5,000, roughly the same as last year, says Irvine. "The patients seem to love it, so we kept it the same," she notes.

Be appropriate. Just be sure whatever gift you send is appropriate for the recipient and the person has no restrictions on accepting gifts.

In general, there are fewer restrictions for smaller businesses than larger companies, says Morrell. But for those that do prohibit accepting gifts, there are other options such as oversized 18-by-24-inch greeting cards he's sent on behalf of clients that cost about $35 per card.

Also be mindful of sending food items with peanuts due to allergies, as well as alcohol, says Chalker. "You don't know backgrounds and preferences," she notes.

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