The Psychology of Reciprocity

We live in a world where we are taught to treat others as we would like to be treated, to do unto others as others would do unto us. Humans have a tendency to feel it necessary to repay or reciprocate when given a gift, be it a material item, a kind deed, or a generous act. It is in our blood; better yet, our mind, to feel indebted by an exchange. Someone does something for or gives something to you. You feel obligated to do the same in return in almost a habitual reaction.

Reciprocity is a type of influence allowing us to make fast decisions based on very little information. With all of the decisions we must make in a day, it’s pretty nice to be able to respond to a favor asked of you based on whether or not the person asking has done something for you previously.

Why do we feel the need to reciprocate?

Contrary to popular belief, there actually is a rhyme and reason behind our need to feel as though we have to act appropriately in exchange for the actions of others in our favor. The Rule of Reciprocity is so deeply ingrained in our psyche that the anticipation of failure to comply may leave us with a feeling of being exploited or even isolated from our community. Simply put, giving back makes us feel good, so why not turn our feel-good dial-up with every chance?

When we feel good, those around us feel good too and a bubble of trust is formed. For example, imagine you are out for dinner with your friend.  When the bill comes and they snatch it and pay before you get the chance, you feel obliged to cover the cost of the next meal you share together.  You and your friend begin to build a circle of trust where you can hold each other accountable.

We learn whom we can rely on and the outcome of our actions. The act of giving and receiving is especially important in business relationships. Why? Because in the bubble of trust is somewhere both you and your prospective client want to be. It is a place where the behavior of return for any gesture goes without saying.

Reciprocity in Business

What does your business do? What would your customer value from most if you could charge them for it, but gave it to them for free? Would it be a product, hint of knowledge, or even insight into your business model? By giving away valuable information and material goods to a prospective client free of charge, your company’s credibility and potential to pick up new clients greatly increases. A give away may be a dinky branded pen, but its power in sales should never be underestimated.

Creating trust with a prospect early on in the sales funnel is crucial to forming a positive business relationship. When you offer a product, knowledge, or assistance to another business, you are demonstrating your care for the well being of that business. In return, it leaves a great impression on you and sets the bar for a time when you may need something from them.

Not to mention, when it comes to referrals and client leads, a little giving can go a long way.  Making your mark with a small social act of paying it forward can trickle much farther into your prospective client pool than you could even imagine.  With something as simple as sending a coffee to your prospect following a demo instantly leaves your mark on them, whether they realize it or not. You are much more likely to come up in conversation as a great person to do business with, etc.

But you should never do it for you, do it for them. It is extremely important to give with zero expectation to receive in return. Reciprocity only works to its greatest degree when the act of giving is sincere and genuine.  A favor is most likely to be returned when the initial favor is done with no expectation of repayment.

Can we resist reciprocity?

Sociologist Alvin Gouldner says, “There is no human society on earth that does not follow the Rule of Reciprocity.” Further backing that statement are anthropologists Lionel Tiger and Robin Fox, who collectively claim that we live in “a web of indebtedness” which is central to the human experience. Is the principle of reciprocity resistible? Unless under remarkable circumstances, quite frankly, no.

The societal norm of reciprocation is a good thing, though. It enables us to engage appropriately in the give-and-take of everyday life with the people who surround us. It further helps in the science of persuasion, an extremely useful tactic for salespeople especially.

For example, let’s say you are in the market for a new computer. You take a trip to the store and find the perfect laptop. The price tag is not exactly what you were hoping it would be, but the salesperson offers to help you out. If you purchase the computer, he is willing to give you a lifetime warranty for free, which usually comes with an additional fee. You feel as if he is doing you a favor and buy the computer.

By sliding in the “gift” of a free lifetime warranty on the computer, the salesperson initiates trust with his customer who then feels the need to give back by then purchasing the computer. The need to give back is essentially instantaneous.

Tips on how to Reciprocate Properly in Business

        Be the first to give something.

The person who gives first is automatically in control in any situation. The person on the receiving end is then left indebted. It is the ideal situation to build and maintain a solid business relationship, especially in the beginning stages.

        Make it exclusive.

Leave your client with the impression that there is a special reason they are receiving what you are giving them. Be its insider information, a demo of a not yet released product, or a gift, give them every reason to want to pay it back to you, because you care enough, so why shouldn’t they?

        Give something of value to the receiver.

It’s one thing to receive a gift, but it’s a completely different thing to receive of gift with meaning.  That doesn’t mean you need to go above and beyond with spending, but adding a touch of thought to what you are giving makes all of the difference when it is time for the receiver to reciprocate.  If your client is a lawyer, why not give them a personalized pen? Or your client may be a writer, in which case a mouse pad may come in handy.

        Give give give.

There is no such thing as giving too much when it comes to business relationships.  When the circle begins to form and you see a trust forming between you and your lead, there is no hurt in continuing the act that started the relationship off in the first place.

Written by: Ariella Sharf, Editor and Founder of Heart and Vogue

How to Ensure A Gratitude Cycle in Your Business

Make Your Clients Feel Valued

Everyone wants to feel valued, especially your clients. Chances are there is more than one company that does exactly what you do. So why do your clients choose your business over theirs? Often it has to do with a relationship and feeling of attachment to your particular business. While your products or services may not be drastically different from your competitors, your customer service can. When giving to your clients, they should feel like the gift was hand-selected and personalized just for them. To make an impression, you want your clients to know you were thinking of them while making this purchase. 86% of consumers say personalization plays a role in their purchasing decisions. To play at the game of reciprocity, you need to tailor the gift for the recipient.

What our customers say:

“I’m sure you get these all the time but thought I’d pass along this reply I just got from Lyft after sending an $8 coffee. ‘I appreciate you so much!!! Thank you. That made my morning. It’s been a long week and the thoughtful gesture really helps’” – Brian F, Wrapify.com

Gift Practically and Beneficially

Giving a client something to benefit them other than your specific product will reap benefits. Show them you’re not only looking to sell, but you also want to show your appreciation for their business. It’s no secret that everyone likes someone who appreciates them, and one of the core tenets of selling is that people choose to do business with people that they like. If the gift you’re giving is of high quality (e.g. genuine, tailored, thoughtful), you establish yourself as someone who people want to be reckoned with – someone who gives not just when they want to get but gives genuinely and generously.

What our customers say:

“I really appreciate the coffee you sent me today! It was a long one, and the shot of caffeine right around 2 pm was exactly what I needed. I’m looking forward to understanding the system even better and putting it to good use.”  – Nicholas 

Suggest Specific Ways that Clients may Reciprocate

When gifting in a business context, you are almost always using it as a means to an end. Whether it is sending them a branded business mug (when they use it, your company gets brand recognition!) or sending your prospect a cup of coffee (let’s make sure they show up to our Monday morning meeting!), you want the favor to be returned whether it is immediate or not. Be sure to include how or what they can do for you in return. Offer which specific ways you would like your clients to show their support. The ease of knowing exactly how to return the favor will increase the chances of gratitude from your client.

What our customers say:

“It was great meeting you the other day! Wish you a successful close to the month. Looking forward to connecting next week to coordinate a meeting with you and Craig.” – Shayla

Be the First to Give

Get used to sending your gifts on the earlier side! Be the first one to reach out, and your clients will feel the drive to give back. Whether it’s the first to reach out over a scheduled meeting, the holidays, or a celebration all will make an impact on the gratitude you receive.

Keep the Relationship Going

In business, you need loyalty. The probability of selling to a new customer is between 5% and 20%. The probability of selling to an existing customer is between 60 and 70%. Whether it’s asking for feedback, referrals, or just a simple thank you; there is always an excuse to reach out and stay connected. Stay connected with your clients, and keep gratitude in mind.

What our customers say:

“As a sales rep that covers a vast territory, you guys saved me when I forgot my to acknowledge one of my largest customer’s birthday. Thankfully I was able to send her a sweet treat which she loved! Will definitely share with my colleagues!” – Murdocc 

Written by: Lauren Reimer, Marketing at Thnks