All HockeyStack Labs reports are done using anonymized HockeyStack customer data. We did not partner with anyone on the creation of this report and it was not sponsored by a vendor.

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Gifting has been around for a while and since day one, it's been a polarizing topic among marketers. Some think it's a great way to get in touch, while others call it bribing. Personally, I have mixed feelings about it but I've never gone so far as to call it bribing. I suppose it’s about how the gifts are being used. I have stronger opinions on random gifts – between 2021 and 2022, I can't remember how many gift cards I received. I bought myself a new TV, AirPods, even a beard trimming kit. I had calls with those companies, but I don't remember a single company's name. Needless to say, I've never bought a product that way as those gifts were used on someone showing no intent.

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On the other hand, I'm still bullish about gifting IF it's done well. For example, if you send a gift to someone who is truly your ICP and is showing intent signals for your product. This doesn’t mean just one website visit; it's more about repeated visits to high-intent pages and engaging with your content. In my case, there are products I've been considering for a while, but I don't have the urgency to start any sales process yet. However, if one of these companies identifies my intent and sends a gift, I'd likely respond. Conversely, if a company I've never heard of sends me a $100 gift card, I'd still pass on it ($1000? I'm not so sure...). That's why when Kacie came up with this idea, I was super excited to start.

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A transparency note before we get started: HockeyStack is a Sendoso customer and Sendoso is a HockeyStack customer. The data in this report has been gathered from HockeyStack customers who are using gifting in general; it could be Sendoso or not. 

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Methodology

MQL: Direct form submissions such as demo, pricing page, and contact us. This doesn’t include any ebook downloads, webinar registrations or anything like that.

SQL: Pipeline created. Every company has different definitions, but we unified this on the backend and used the SQL definition for when the pipeline is actually created.

ACV: Total new business revenue added divided by the number of closed-won deals (also known as Average Contract Value, Deal Size, Selling Price, Deal Value)

CW: Closed won deals, net new business, new revenue. 

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The method of gifting:

- For outbound deals, when a gift was sent to book a call

- For inbound deals, when a gift was sent to submit a demo form

- For open deals, when a gift was sent anytime after the first call

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Sample Size: 30 B2B SaaS companies.

Sample Description: 

- From Apr 1st 2023 to May 30th 2024

- From $25M ARR to $250M ARR; average ACV from $18K to $140K. 

- 90% NAM, 10% UK

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Part I: Outbound & Gifting

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As far as I remember, gifting was at its peak from 2020 to 2021, with almost every outbound email including a gift. Then it shifted to gifts combined with Vidyard/Loom videos, and now it’s more about AI videos and gifting together. However, based on my experience (as we don’t have data on this), it seems like the gift quality has decreased. I used to receive Legos or champagne kits two years ago; now, it’s just YETIs... Is it because companies are running out of VC money or am I becoming less and less important?

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Before we get to the numbers, it’s important to note that while all the companies in this report use gifts, almost none of them include gifts in every outbound email. We’re definitely seeing email blasts by their SDRs, but it seems these SDRs don’t use gifts in all their emails. I suppose most SDRs have a limit on the number of gifts they can offer. On average, 68% of the outbound emails offer gifts.

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What’s up with the remaining 32%? We know these 32% are still outbound sales emails because we can see deals created or/and closed won journeys. There’s also no pattern in terms of email dates; it’s not like all these 32% emails are sent in the last week of the month when SDRs might have run out of their gift quota. The dates look rather arbitrary. 

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Without deanonymizing the data, we can’t see job titles or prospect details. Maybe emails without gifts are being sent to individual contributors, smaller companies (for compliance reasons), or specific industries. These are all my assumptions, as I know that in some industries and large companies, receiving any type of gift isn’t allowed.

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Regardless, we’re seeing that outbound emails with gifts have a 3.08x higher meeting rate. Sendoso also confirmed this data and shared a case study of LiveRamp, which found that cold emails with gifting had a 33% better conversion rate. Obviously, this data alone doesn’t mean much, as one could argue that people take those meetings just to receive gifts. To understand if this is the case, we need to look at the full funnel metrics.

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Okay, gifts help SDRs book 3.08x more meetings in outbound, but do these meetings actually convert?

The answer is yes. Outbound emails that start with gifting have a 1.84x higher win rate than emails without any gifts. So this data shows that offering gifts actually doesn't make people have a meeting with you just for the gift, but it actually improves the close rate as well.

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Another argument could be that since sending gifts costs money, maybe salespeople actually work on their email lists and do better due diligence than usual. They might be choosing better prospects, writing better emails, and personalizing them more effectively. Could this be the case?

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To understand this better, I’ve also analyzed two other data points: deal size and time to close. In terms of deal size, there’s almost no difference between deals that started with gifting and those that didn’t; although the former has a better close rate, the deal size is only 0.79% higher in deals with gifting. Additionally, our dataset shows that outbound deals with gifting take 5.8% longer to close. Considering that the average sales cycle was 69 days in 2023, this equals about 4 extra days.

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Since we’re seeing almost no difference in deal values; even in the event of salespeople choosing better prospects and sending better emails when they offer gifts, it might not mean they’re targeting more enterprise deals. Instead, it might mean they’re just choosing better fits.

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Another thing is that if deal sizes were higher on an at-least-just-a-bit-statistically-significant level, I think it would also explain the longer close time. But regardless, 5.8% is also not a statistically significant amount in my opinion. I'm more inclined to summarize this part as follows: "Outbound deals that start with gifting don't impact the sales cycles or deal sizes; however, they impact the meeting booked rate by over 3x and close rate by over 1.8x."

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Part II: Inbound Data

With all fairness, I was more excited about this part because of my own experience. From what I keep hearing, marketers tend to use gifting, especially at the end of a slow quarter, to maximize conversions, keep sales happy, or hit their MQL targets.

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Before I begin with numbers, I’d like to clarify one thing: as I said in the introduction, I’m not against gifting, but I’m against the way it’s being used by some marketers. Gifting should be used for a qualified ICP. However, it seems this isn’t the case in general. What we’re seeing is that the MQL:SQL conversion rate when gifting is offered is actually 9% lower than the conversion rate without gifting.

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Can we tie this data to wrong targeting, or claim that these prospects fill out MQL forms just to get gifts and get disqualified more often because they had no intent, or they were not exactly a fit? Maybe.

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We can theoretically verify this hypothesis with the deal size, time to close, and close rate data, similar to what we did on the outbound side.

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Our dataset shows that although MQLs with gifts have a lower SQL conversion rate, once they become SQLs, the average deal size of these inbound prospects is actually 13% higher than those without gifting. Moreover, these deals close 29% faster.

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This is interesting for two reasons. First, these numbers are significantly different from the outbound data, where we saw, respectively, just 0.79% and 5.8% differences. Second, it seems to validate what I mentioned earlier. But I want to be sure, so I’ll be looking at some other data points: spend and MQLs.

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According to our data from April 1st 2023 to May 30th 2024, companies in the sample set spent 12.1% of their budget on campaigns with gift offers. (Note that we should probably say “at least 12.1%” because we get this data from their campaign names, UTMs, and campaign member data. If these companies used different naming conventions, we might have missed some. For example, if they were offering Yetis and named everything “yeti” without any mention of “gifts.” However, this wasn’t the case in the outbound data, and I suspect it won’t be a huge issue here either).

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For me, 12.1% is a massive budget allocation. For example, I allocate 70% of my budget to LinkedIn, and about 15% of my LinkedIn budget goes to retargeting. This means that I allocate around 10% of my entire budget to LinkedIn retargeting campaigns. A 12.1% budget allocation would mean that my entire retargeting motion would be gifting, along with a few cold campaigns with gift offers, or maybe some ABM campaigns.

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When I look at this data month-on-month, I see what I was expecting. The budgets for gifting campaigns have always increased by at least 27% in the last month of each quarter since April 2023. (The average increase in non-gifting campaigns is around 11%).

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Although I usually try to avoid doing this, the cost per MQL in gifting campaigns is 43% cheaper than in those without gifting (this unfortunately ignores the impact of brand campaigns).

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Let's look at all this data together now. These campaigns bring in cheaper MQLs, a decent portion of the budget is allocated to these campaigns, and these campaigns get even more budget at the end of quarters. These are all strong indicators that these campaigns are being used to maximize conversions. These data points indeed signal that gifting MQLs have lower SQL conversion rates because the way gifting is used in inbound is flawed. 

However, once we reach the SQL stage, we see the actual qualified gifting MQLs. These are mostly from companies that use gifting with a proper strategy targeted at the right people, hence we see 13% higher deal sizes and 29% faster deals.

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On top of that, the close rate is 3% higher in deals with gifting, but similar to what I mentioned in the outbound part, I don't think this is statistically significant.

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The last thing I want to highlight in this part is that our dataset indicates that sales teams use gifting more efficiently than most marketing teams do.

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Part III: Open Deals

In this last part, I wanted to look at one more data point. What happens if gifting is done once the deal is created? This could be an outbound or inbound deal without any gifting at the beginning, but what happens when sales sends a gift after the first call? Sales might do this if they think the deal is qualified but the prospect isn’t ready for the second call, or to speed up the process. We can’t be sure about the rationale behind this decision, but we have some data to understand if it works or not.

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Among deals that didn’t start with gifting, 87% were offered a gift after the first sales call. Deals with gifts after the first sales call have a 6.31x better second sales call rate than the ones without any gifts. The average deal size of these deals is also 16% higher while the average time to close is 28% slower. This higher deal size and slower sales cycle indicate that sales indeed use gifting in open deals where the deal is more enterprise. But more importantly, a 6.31x difference in the second call rate is massive; I don’t think we’ve seen such a huge difference between two metrics in any of the Labs reports.

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One thing to keep in mind is that the second call rate probably isn’t 6.31x better just because of sending gifts. It’s likely better because salespeople are most likely sending gifts to prospects they think are extremely qualified.

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Conclusion

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Looking at all the data together, it's clear that gifting is a powerful tool, but its effectiveness varies depending on how it's used. In outbound, gifting significantly boosts meeting rates and win rates without much impact on deal sizes or sales cycles.

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For inbound, the picture is more nuanced. While gifting campaigns bring in cheaper MQLs, they often have lower SQL conversion rates. However, the ones that are actually qualified result in larger deals that close faster. This suggests that many marketers might be using gifting to maximize conversions and hit MQL targets, rather than focusing on qualified ICPs.

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The most striking data for me comes from open deals, where gifting after the first call leads to a massive 6.31x improvement in second call rates. While this is likely because sales are sending gifts to prospects they think are extremely qualified, it still shows the potential impact of well-timed gifting.

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