It is tradition for many companies at the end of each year to give gifts to their customers.
A few years ago my neighbour, John, called me with an unexpected offer to give me a gift. I got on well with John and he would often invite me to attend his multi-level marketing (Amway) meetings. I had previously declined these opportunities because they were not appealing to me at the time.
I was aware of the power of reciprocation, that by receiving the gift it would put me in John’s debt, and most likely he would invite me to his upcoming meetings. Only this time I would feel internal pressure to repay John by attending. I was left in a conundrum! If I accepted the gift I would feel compelled to accept John’s invitations to attend one of his meetings. If I refused the gift, I would be discourteous.
And to be honest, even with my understanding of this principle of Reciprocation, it would be very difficult to refuse an invitation to attend one of his meetings after accepting his gift.
So what to do?
For days I wrestled with that question.
Eventually I realised that this was a conscious plan of John’s to recruit me. With that perspective I no longer felt uncomfortable declining his gift.
The lesson has stayed with me because the power of gift giving influenced me into something I did not want to do.
In 1984, Robert Cialdini wrote, Influence: The Psychology of Persuasion. The six universal principles of persuasion contained in the book have helped millions to be more influential with others in their lives.
These principles of influence are:
- Commitment and Consistency
- Social Proof
Reciprocation is when you receive a gift from someone which makes you feel compelled to return the favour.
According to one scientific study, customers entering a lolly or candy store are 42% more likely to purchase when they receive a small gift of chocolate upon entry into the store. The same principle applies to nearly every other type of product.
You will be most influential when your gift is:
- unexpected; and
- customised to the person receiving it.
If John’s gift to me was something I needed or wanted, its influence on me would have been much greater.
How can I use the principle of reciprocation to be more successful with my startup?
Here are a few suggestions….
- Take your customers out for coffee. You are given them a free coffee and an excuse to take a break from the office. If they have a pleasant experience with you, they will feel a greater urge to return the favour in some other way. Enterprise Sales is complex and involves multiple stakeholders. Getting relevant and timely information about your customer and their decision process is vital to your sales success!
- Do something for your customers in a meaningful way: Support their industry or user groups. Whether it is for law librarians or mining engineers. Spend time with them and try to help their cause. For about six years, I sold IT project services to government agencies. We would provide free educational sessions on Customer Experience and Usability to address their particular concerns. When we did this in the right way and it was needed. However there was an increase in demand for services from our customers.
- Give them a gift. Customers love merchandise! It allows you to give them something that reminds them of your company. And if they love the gift… even better!
- Consider offering freemium products. Giving a part of your product away for free is the ultimate reciprocation play. How can you do it without cannibalising your current business? That’s something you will need to work out.
Whether we apply reciprocation consciously or unconsciously, we all experience it. The more awareness you have of this power of persuasion, the better you can apply it.