The effects of unconditional gifts on customer-firm relationships

Abstract

This research demonstrates the impact of unconditional business-to-consumer (B2C) gifts. It contributes to the literature by examining how an unconditional gift at the beginning of a shopping experience can influence both loyalty and transactional spending. The findings show that an unconditional gift creates feelings of gratitude, driving loyalty and transactional spending. At the same time, receiving such a gift can lead to a sense of obligation, prompting increased transactional spending to alleviate this feeling. To address the identified gaps in research on B2C gift giving and provide managers a clear path to successfully launch an unconditional gift-giving program, we conduct two firm-partnered field experiments, tracking the behaviors of customers after receipt of an unconditional gift. We then conduct five experimental studies to validate the theoretical process and examine three managerially relevant contingencies: value of the gift, new versus existing customers, and a promotional reward versus an unconditional gift. We find that even unconditional gifts with little monetary value provide benefits for a firm and the effects are robust across new and existing customers. Furthermore, we find that unconditional gifts create greater feelings of obligation than promotional rewards. Managers can use our findings to design unconditional gift-giving programs regarding when, what, and how unconditional gifts should be given to have the largest impact on customers.