Three wise lessons on gifting from behavioural science

The views of the giver, not just the recipient, strongly influence how people perceive Christmas gifts, as do the price and packaging. Brands should take note.

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Gift-giving is universal across cultures and fundamental to the fabric of society.

Psychologists have long been fascinated by the practice: why do we give, what makes a good gift, and how much should we spend?

Well, it turns out that there are certain consistent psychological characteristics linked with gifting. These insights can help you as a marketer to work in alignment with human behaviour – so you can help the givers keep giving, while you grow your brand.

1. Giving makes us happy

Giving to others seems to boost our own happiness more than spending on ourselves.

There’s plenty of academic evidence to support this. For example, a 2008 study by Elizabeth Dunn, Lara Aknin (University of British Columbia) and Michael Norton (Harvard) ran a study to explore this.

The researchers gave 46 participants a small sum of money ($5 or $20) and asked them to spend it that day. Half were told to spend it on themselves, half on someone else.

When asked at the end of the day, those who had spent their unexpected windfall on others were measurably happier than those who’d spent it on themselves. Interestingly, the amount they’d been given didn’t impact their happiness.

This is just one of many studies showing the same thing – giving makes us happy.

What can brands do?

You can spread joy by helping people to be generous. This will benefit everyone — not only the giver and receiver, but of course, your brand image.

A great example of this comes from Pret A Manger, which handed out vouchers designed to be passed on to others. This works so well because it makes two people happy for the price of one, whilst bringing new customers through the door. And of course, it needn’t be saved just for Christmas – why not pass on joy year-round?

2. Doing is better than having (but don’t forget the parcel)

A friend recently offered her dad a choice for his Christmas gift: a jumper, or tickets to an Abba tribute gig. He picked the latter, and photos of the evening show what a fantastic time they had together, glittered flares and all. It seems he made the right choice.

This is an example of what almost every study exploring the issue has revealed – experiences trump material possessions for boosting happiness.

In one 2010 study, Thomas Gilovich from Cornell University carried out a survey to explore this. He asked participants to describe their most recent experiential purchase or material purchase over $100, and to rate how happy the purchase made them.

There was a clear winner: experiences made people 13% happier than new stuff. So, a gift of tickets, a day out or a spa treatment will be well-received and deliver genuine joy.

Give the recipient the excitement of unwrapping and the giver a chance to witness the magic of the opening moment.

But there’s something important to keep in mind. While recipients will be delighted with an activity or event, the giver also needs to get something out of the exchange.

There’s evidence that gift-givers place value on the moment of handover. For them, the exchange lets them see how well-appreciated their gift has been: is their loved-one surprised, touched or grateful?

This matters for marketers, whose focus should be the giver as much as the receiver.

What can brands do?

First, don’t underestimate the value of offering experiences as well as products. If your brand doesn’t naturally lend itself to this, are there any smart ways you could combine product and experience – what about after-hours shopping, taster sessions, launch events or influencer talks? Anything that needs an exclusive invitation, which would make a nice gift.

Second, consider the giver. Printing off a voucher at home, or simply sending a PDF by email, can feel transactional and bring little satisfaction. Sometimes, it’s the only option – but it’s a good idea to offer a packaged version too. Think about ways to box up an experience beautifully, giving the recipient the excitement of unwrapping and the giver a chance to witness the magic of the opening moment.

Amazon offers various choices for their shopping vouchers, including eye catching gift boxes as well as instant print-at-home and email options. And Red Letter Days have mastered this with their ‘Joy in a Box’ messaging.

3. When it comes to gifting, more is more

Gift-givers believe that the more they spend on a gift, the more it will be appreciated.

There’s academic evidence for this from a 2009 study by Francis Flynn and Gabrielle Adams at Stanford University. They examined gift-givers’ and gift-recipients’ feelings about price and gift appreciation: 237 participants were randomly assigned to the role of either gift-giver or gift-recipient. Both were asked to estimate the value of a recent birthday gift they’d either given or received and answer several questions about their experience.

Givers predicted that the more a gift cost, the more joy it would bring, assuming that pricier presents convey a higher level of thoughtfulness. Interestingly, for recipients, price did not predict appreciation.

Linked with this, research has revealed that people are less price-sensitive than normal when it comes to purchasing gifts.

In one 2018 study, Sherry Shi Wang and Ralf van der Lans from Hong Kong University of Science and Technology, compared price sensitivity in personal and gift purchasing.

They gave 99 pairs of friends a choice of six headphones, each with a randomly generated spec based on various product attributes, including price. Each pair was asked to indicate their headphone preference if purchasing for themselves.

In the second stage, they were asked to imagine it was their friend’s birthday and they had decided to buy them a pair of headphones as a gift. They then selected a pair of headphones for their friend.

The findings suggest we’re more generous to others than ourselves: on average, participants were willing to spend 6% more when buying headphones as a gift, rather than for themselves.

What can brands do?

Gift-givers believe that a gift that is perceived to be expensive will be appreciated more. This, of course, was harnessed by DeBeers in the 1940s, when the brand explicitly related the amount a man spends on a diamond engagement ring for his fiancée with the degree of his love for her.

So, despite our current economic climate, it may be wiser to use discounts with caution if you’re in the gifting market. Otherwise, you risk making your product less appealing.

Taken together, the tactics discussed here can help grow your brand, while spreading generosity and joy. And why not apply a tip or two to your own Christmas shopping this year? The more people you give to, the happier you’ll be.

Richard Shotton is founder of the consultancy Astroten and author of The Choice Factorya book about applying behavioural science to advertising. He tweets at @rshotton.

Will Hanmer-Lloyd is head of strategy at Total Media.