Gift Connection Fills Niche : Car Dealers Count on Encino Firm to Butter Up Customers
It’s not easy selling cars in Grand Forks, N.D. There are eight auto dealers in that dusty city on the Minnesota border, and the population is only about 43,000. So Jim Kvasager, who owns the Chrysler dealership in town, tries to sweeten his deals a little.
He does it with cookies. Every week, Modern Chrysler Center sends a list of the names and addresses of its newest customers to the Gift Connection in Encino. There, tins of imported Danish butter cookies are packaged and sent to the car buyers, along with thank-you notes.
The Gift Connection is one of a handful of businesses nationwide that send such packages of appreciation to customers of firms selling big-ticket items. Clients of these businesses include office furniture stores, real estate brokers and computer stores. But car dealers head the list, those in the industry say, because so much of their business is based on word of mouth and repeat buyers.
“It’s a real competitive market, and anything you can do helps,” Kvasager said. “But we don’t have time to run to the post office to send out gifts. There’s so much else for a car dealer to do.”
That’s just fine with David Reiss, 33, a fast-talking entrepreneur who started the Gift Connection in early 1981. He calls his company a marketing service: It sends out not only the cookies but also response cards that ask about any problems the customer has.
The goal is to make the customer as happy as possible before the car manufacturers send out their own cards, responses of which are used to tabulate indexes of customer satisfaction. Those ratings often affect dealers’ bargaining power with the car makers that they represent.
For example, if a Ford dealer wants to start selling Lincoln-Mercury cars, the company will review the dealer’s customer satisfaction index carefully, along with other data on how well the dealer sells cars, according to Robert Harnar, a Ford spokesman.
Sending thank-you gifts is nothing new. Many auto dealers already send their customers everything from bottles of wine to house plants. How a gift is handled and the information a dealer can obtain from responses to it are the keys to Reiss’ operation, he says.
But why Danish butter cookies?
Reiss, calling them “high-recognition, classy items,” says: “They’re a gift people can share. Everyone saves the tins, which become a constant reminder of their favorite (car) dealer. Heck, I’d send paper clips, but they wouldn’t go over as well.”
Reiss doesn’t have contracts with the dealers and doesn’t charge start-up fees. Dealers are billed $10 for every car buyer served. The cookies, which retail for up to $7 a tin, are purchased from a New York firm that imports them from Denmark. While loquacious about selling cookies, Reiss won’t reveal much about his own business. The company declined to disclose sales or earnings figures. But a source familiar with the company said that its sales last year topped $3 million and that the company now has 950 car dealers signed up in 48 states. In early 1985, there were only 60 dealers in the program. Reiss says the company has 16 employees.
Other companies offering similar services include Customer Relations Service in Panorama City, which sends jellybeans and candy in glass jars silk-screened with the dealer’s name. The firm has 125 dealers signed up who pay $10 for every jar, according to business manager Elsa Eisenring.
Reiss says there’s plenty of business to go around with more than 25,000 car dealers in the United States. “Hey, we just can’t play dirty in this game,” he said. “I just say, ‘I won’t step on your toes if you won’t step on mine.’ ”
A mercurial former New Yorker with bright red hair and beard, Reiss has been involved in a number of businesses since coming to California eight years ago to pursue a career in the entertainment industry. Among other things, he is the author of a 1980 book entitled “M*A*S*H. The Exclusive Inside Story of TV’s Most Popular Show.”
When the Gift Connection opened, it dealt mainly with personal computer dealers. That business never took off, though, and Reiss entered the auto field only two years ago. Now, more than 90% of his business is automotive.
Reiss says: “Car dealers have to be especially aware of the personal touches, because no matter how much advertising they do, what ends up mattering is word of mouth. And people like getting presents.”
