Reciprocity and Reward
Reciprocity is an intriguing human behaviour that can be used as a means to market your company more effectively. It is a common human trait that works with a person’s sense of obligation. It is natural for people to feel indebted to someone who has been generous towards them, and is common for people to feel the need to repay kindness in some way.
When you give freely to a prospect or customer without asking for anything in return they are likely to feel the need to repay you. The key is to provide something of value to prospects that has a high perceived value, but is low cost to your business. This could be valuable information that will help your prospects and build trust towards your brand. Of course, there are no guarantees the free information offered will cause your prospects to buy from you, but it should increase the chances that they will. External factors will influence their decision also: it may not been the right timing for them, they may be needing your products or service down the track, or they may not be able to afford it right now. If you can provide valuable, free information, not only will you benefit from the law of reciprocity, but you are more likely to be remembered as the experts in your field when the time comes for them to buy.
Offering free information in exchange for your prospect’s contact details is very popular these days and can be a successful strategy, however it’s not a true reciprocity marketing campaign because it is based on reward rather than reciprocity. Prospects have ‘paid’ for the information they receive by providing their contact details, knowing it’s likely they will be approached in the future with more marketing.
Due to the bombardment of email marketing in recent times, prospects are less likely to provide their email address in exchange for information. This has led to a growing trend to provide free, valuable information with no strings attached and inviting prospects to follow up if they have found the information useful. This is more of a reward strategy than reciprocity. You should be careful with this approach and consider all your options.
It is likely more people will read your free material if it is truly free, however if nobody contacts you maybe a two-step approach is a better option for you. Test, measure and tweak your strategies to see what produces the best results for your business.
A two-step approach can be a powerful tool to help you build a database. First, provide a ‘soft’ offer, or give away something for free in exchange for contact details where you can follow up with a second marketing message. Then, your second message may be a ‘hard’ offer where you intend on making a sale. Some believe you should give freely without expecting contact details and trust that reciprocity will bring those people back to you. This is likely to increase the number of people taking up your offer, but the real measure of success is how many prospects you convert into customers.
With any two-step approach, being too heavy-handed with your sales approach could produce a negative impact on your brand and decrease sales. The key is to find the right balance. Follow up with subtle offers rather than a hard sell. Phone calls, particularly from offshore partners, can be very invasive and people will have immediate defence mechanisms in place so they completely ignore your offer and are left with a bad experience regarding your brand. Email marketing can also be invasive for prospects who may feel your email is just spam. Printed material that is personalised is often the best approach. While there are higher costs involved than phone calls or emails, you are more likely to make a connection with your target market, after all it’s likely they are interested in your product or service because they have already downloaded your material.
You know your prospect has an interest in free information, so why not make another offer of more downloadable information. This time you don’t need to ask for anything in return because you have their contact details already. If you choose to use email for this offer, make sure you use a well-designed system that will monitor who takes it up. This will give you more information on who may be a ‘hot’ prospect, and what kind of product or service they are looking for. It is a well known fact that people will only buy from a service provider after an average of seven contacts, so don’t go for the ‘hard sell’ too soon. Slowly build the relationship and wait for the law of reciprocity to kick in.
Every time something is given away for free it creates an opportunity for reciprocity and a sense of indebtedness, particularly when there is a measurable value associated with that material; for example, a ‘Recommended Retail Price’. Research suggests most people won’t reciprocate with something that is of lesser value than they feel they have received because they will still feel a sense of being in debt.
Experiment with reward and reciprocity with slight variations of the same offer. You should test, measure and tweak your campaigns in order to improve its success and once you have established the most successful campaign, roll it out on a larger scale. For some, a reward strategy may work best, for others relying on the law of reciprocity will be more profitable.
Offering or suggesting other products or services your prospects may benefit from can cause the law of reciprocity to take effect, particularly when the prospect feels you have made an effort to go out of your way and help them. Why not couple this strategy with a referral system with other businesses, or other form of strategic alliance. Offering to donate a portion of your customer’s purchase to a worthy cause can also instil a sense of indebtedness. This in turn increases your chances of turning prospects into loyal customers and raving fans. Build your strategy around
these principles:
- What you consider the values of your brand to be.
- What you want to be known for or associated with.
