I received a question from one of our woodworking shops this week — "Is it appropriate to give a customer a gift when ordering? How about giving a $20 dollar coupon for any referrals they send in?"

It is a dilemma. It shouldn't appear that you have to pay to find new business, yet incentives often work. It also should never be a bribe, but gifts are remembered.

We once worked with a customer that demanded a bottle of whiskey be dropped off at every visit: Bribe or gift?

Here is how we have defined the situation over the years:

If you send a thank-you gift after an order, and it was unexpected then it is a gift.

If you send a gift prior to the order then it is a bribe.

If you are requested to send a gift by the customer then it is a bribe.

A good way to reward customers, who refer friends, is to first write them a thank-you note for the help. If the referral turns into business, and you want to send more than just a thank-you note, make it a non-monetary gift, like a dinner coupon or a donation to their favorite charity.

And the bottle of whiskey kind of customer? Do what we did, avoid selling him. Those kinds of folks eventually get fired and if you were part of his "program" your reputation will go down with him.

Good Hunting,

Rick

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