December 2007
Last-minute holiday helps
By Laura Freeman

Mary Mularo, a candy maker at Brandt's Candies in Willoughby, is known for her caramel and turtles. Brandt's does a booming business during the holiday season.

Somehow preparing for the busy holiday season slipped your mind and all of a sudden it’s December. What can last-minute business people still do to make this a profitable holiday season?

Put up the lights

Tom Mitchell, president of Marshfield Group, an advertising and public relations firm in Concord Township, said the largest mistakes businesses make are underestimating the total number of advertising messages prospects are exposed to daily – and it ramps up dramatically during the holidays – and underestimating what it takes to reach their markets.

Mitchell quoted a study conducted by the University of Washington.

“The average person is bombarded with 500 to 1,000 advertising messages a day,” he said. “To put things in perspective, you and I are exposed to more ad messages in one year than our grandparents were exposed to in their lifetimes. So, it takes extra planning and effort to break through the clutter.”

He said it can’t hurt to follow Wal-Mart’s example.

“Be ahead of the curve, be early, be bold, be frequent and be big,” he said. “It gets earlier every year. Wal-Mart, though they were somewhat criticized, started advertising Christmas before Halloween.”

Mitchell suggests running newspaper ads larger than usual and using these four magic words – “Makes a Great Gift.”

“Virtually anything can be positioned as a gift,” Mitchell said. “If Lexus can position a $40,000 luxury vehicle as a gift in their ‘December to Remember’ sale, any business can do the same. They’ve coupled it with some incentives like special financing and a little lower cost, and it’s working.”

Other ideas include positioning products and services so there is something for every budget, bundling products and services into holiday packages or tying it to the giving nature of the season.

“For example, if you’re selling eyeglasses you might have a promotion where people can donate their old glasses and those old glasses are donated in turn to a charitable organization and given to needy people,” he said.

Finally, Mitchell said if your product doesn’t depend on holiday sales, such as business-to-business products, avoid the competition altogether and advertise in January.

Dangle the mistletoe

Jerry Thompson, owner of the Wine Vault in downtown Willoughby, says the holidays are critical to the success of his business. He estimates he does at least 40 percent of his annual sales during the holidays.

Thompson’s experience mirrors last year’s nationwide jump in sales of 44 percent from November to December as tracked by the U.S. Census Bureau. Department store sales were reported at $21.8 billion in November compared to $31.4 billion in December. Other retailers with substantial jumps in sales between November and December 2006 were book stores (86 percent), clothing stores (49 percent), jewelry stores (155 percent), and electronics stores (60 percent). Marketers such as caterers, travel agents, restaurateurs and party planners also depend on holiday business.

How does Thompson lure customers into his store? Besides plenty of advertising placed well in advance, Thompson says he does everything he can think of to bring customers in – or to bring them back.

Carole, Thompson’s wife and partner, makes up holiday baskets with wines that have holiday-sounding names like Reindeer Ranch. The city does its part to attract people to downtown retailers with the annual Holiday Stroll, the traditional kick-off for the holiday shopping season.

For his part, Thompson has planned wine tastings every Saturday from noon to 3 p.m. through New Year’s.

“People are looking for something special around Christmas time to serve at their dinner tables. We like to give them an opportunity to try what we have here at different cost points,” he said.

Buy the candy

If there is a solid milk chocolate Santa or Christmas tree in your stocking this year, chances are it came from Brandt’s Candies Inc. Sally Mularo, daughter-in-law of owners Barbara and James Phillips, helps run the Willoughby candy store with other family members.

“You won’t find them anywhere but here,” Mularo said. “Most are hollow.”

Brandt’s still makes all its candies by hand, sticking by its motto, “Hand-dipped, homemade candies.” It’s the same motto used for nearly 60 years since founder George Brandt opened the store in 1948.

The family has owned the company for three years, shipping their candy anywhere in the continental U.S., but they use their Web site, www.brandts-candies.com, for information only.

“Since we do all hand-dip and homemade, we wanted to get our feet firmly planted before we made the jump into Internet sales,” Mularo said. “That’s a little frightening to us.”

Mularo said the family learned quickly that advertising for Christmas and Easter isn’t necessary – the candy sells itself at those times. The store closes in the summer, a traditionally slow time for the candy store. During the holidays, it’s a different story. Then the candy store is snowed under with corporate orders.

Mularo said you can’t beat the chocolate, or the customers.

“It’s very nostalgic,” she said. “You won’t find people making chocolate this way anymore. We have people who have been coming in here since 1948. They bring in their grandkids and tell us stories about coming in when they were kids. We have the same recipes and molds so people can still find the same candy they had as a kid.”

Give the perfect gift

What do you get for the customer who has everything? Dick Blake, local customer service guru, etiquette coach and ballroom dance instructor, says the days of handing someone a gift of a bottle of champagne or a bottle of scotch are gone. He says what people really want is more time to spend with their families.

“It’s a totally different concept today in giving. Instead of inviting your clients to lunch for a special celebration of their customer relations, they would much rather you send a gift certificate so they could take their family out to dinner,” Blake said.

He says it is hard to tell what a customer might like, particularly as businesses develop international clientele. “Giving gift certificates takes the hassle out of finding something, it’s more efficient and time-saving and it’s even a little classier way of doing it.”

Giving business gifts

Some say it’s better to give than to receive, but business owners should know it’s even better to give business gifts than personal gifts. Why? Jeremy Senften, manager at the accounting firm Rea & Associates in Mentor, says it’s because business gifts can be deducted against taxable income – up to $25, that is.

Senften says there is no limit to the number of business gifts you can give in one year, but you can only deduct up to $25 to any one taxpayer per year.

There are always exceptions to the $25 rule.  “The big exception is employee achievement awards,” Senften said. “Employee achievement awards have to be tangible personal property like a clock or a watch – they can’t be cash or gift certificates.” These awards can be valued at up to $400, and when combined, up to $1,600. At Rea & Associates, employees receive achievement awards at five-year intervals.

“They send out a catalog and employees can pick out something for our awards,” he said.

Another type of employee/client gift is holiday parties. While meals and entertainment are just 50 percent deductible, when a business has a holiday party it’s 100 percent deductible.

“It’s the same with a company picnic,” Senften said. “Most companies have something in December and again in the summer. Now, if you have a party every two weeks, then they start to question that.”

Sometimes a gift can be classified as either a gift or entertainment.

“The business can pick the most beneficial way to deduct that,” Senften said. “For example, if a ticket to a Browns game costs $100, you can classify it as entertainment and take the deduction for 50 percent of it because it’s more than the $25.”

Items costing $4 or less with the taxpayer’s name or logo permanently printed on it don’t count as gifts at all. Senften mentioned back massagers, stress balls, pens and other promotional items.

Bake the ham

Tom Ruffner, mayor of Wickliffe and vice president of Villa Beach Communications in Euclid, has a list so long it rivals Santa’s. For the 13,500 residents of Wickliffe, holiday gifts include a holiday lighting ceremony, a children’s Christmas party and other celebrations for city residents.

For city employees the gift-giving comes in the form of a dinner.

“We host a recognition dinner for those people who work tirelessly all year and give us ideas to help us run the city,” Ruffner said. As Senften pointed out, this is a 100 percent write-off for the city.

For his business, Ruffner supplies a holiday lunch to his vendors and designs and sends out Christmas cards signed with a personal greeting. Ruffner says it’s never too late to send a card.

“Should you run out of time to send greeting cards in December, no problem,” he said. “New Year’s is another perfect opportunity to thank customers for their business and wish them a successful new year.”

Laura Freeman is editor of the Lake County Business Journal.