We all like to do nice things for people that do nice things for us.
…and there’s a reason for that.
People are both hardwired genetically and taught by others growing up to be nice and helpful. After all—the species would not have survived if we didn’t all work together!
While reciprocating is something that occurs naturally, it can also be leveraged for business reasons.
This mutually beneficial relationship in business is called the Reciprocity Principle.
What Is the Reciprocity Principle?
Essentially, the Reciprocity Principle for business is the concept that people will want to reciprocate when they are helped out by others—even if the entity that is helping them is a business.
You can really think of the Reciprocity Principle from a business standpoint as serving instead of selling. When a lot of people start out in business, they focus a lot on selling. While this makes them money in the short-term, the lack of focus on building relationships hurts them in the long-term.
To really build a tribe of loyal followers, you need to approach the relationship first from a point of how you can best help your audience.
After you've done that for long enough and have that relationship in place, they'll feel much more ok with it when you start trying to capture value in return because they know that you really care about them and want to provide value.
Example Of How The Principle Of Reciprocity Works
Back in 1971, Dennis Regan of Cornell University published a fascinating study on reciprocity that changed the way people looked at sales. The “Coca-Cola experiment” was positioned as an experiment where participants would evaluate art, but this actually wasn’t the case.
Instead, the study involved the participants overhearing a conversation of the assistant for the experiment being polite or rude over the phone. After this, the assistant would give the participant a soda or not give them a soda while having them look over some art. The assistant for the study then passed the participants a note asking them to purchase some raffle tickets.
The results showed something that I’m sure you may have guessed—the participants that received a soda purchased more raffled tickets. Actually, they purchased twice as many raffle tickets!
This experiment illustrated that by giving, you are more likely to receive. It also showed that the reciprocity principle works in terms of sales. After this experiment, more experiments have been done on the principle of reciprocity for business, and the results have been the same each time—with giving came receiving:
- In 1999, Whatley, Webster, and Rhodes found that undergraduates who were given candy were more likely to give a pledge than undergraduate students who didn't receive candy.
- In 1995, Howard found that people who accepted free recipes from a telephone solicitor purchased more cookies at their homes from the same organization than people who didn't receive the recipes.
The studies have shown that people are more likely to make a purchase from a person or business who has given them something for free.
So, how can you use that to your advantage?
Examples Of "Free Items
Now that you better understand the concept of the Reciprocity Principle, let’s look at some examples of “free” items that you can consider giving away:
Free samples are pretty common—and not just in the grocery store.
Many business owners will offer free webinars, consultations and more. This allows the customer to see what their services look like.They also may offer a limited version of their product. If the customer likes it, they can always upgrade for more services!
For a lot of information products, you’ll see “free gifts.” This will often include a report, worksheet or other items that provide value.
While these are based off of providing the customer value, they are also sales tools. They leave the customer in a place where they may feel the urge to reciprocate and check out the full product—especially if they enjoyed the gift.
A lot of content creators rely on the generosity of their viewers, listeners and readers.
Actually, this is the whole basis for companies like Patreon!
If a content provider provides good enough content, many fans will want to support them by either pledging money, paying for a membership or buying their products or services.
Examples Of The Reciprocity Principle In Action
If you pay attention while you're looking around the internet, and even at many businesses in person, you're going to start seeing the principle of reciprocity in action just about everywhere you go.
Let's look at just a few examples to give you a better idea of what we're talking about.
1. Red Bull
Started way back in 1986, Red Bull has come to absolutely dominate the energy drink market through a powerful combination of a winning product and an innovative marketing plan. And a big part of that innovative marketing plan is that Red Bull has focused a lot throughout its history on providing a lot of free stuff to people.
Have you ever been walking around somewhere and seen one of these cars?
To spread its product, Red Bull sends people out directly to where their target audience is hanging out: colleges, libraries, cafes, bars, sporting events and anywhere else where 18-34 year olds tend to spend time.
You better believe that getting product for free helped encourage people to spread the word and have warm feelings toward Red Bull.
Moz is a SAAS company that offers inbound marketing and marketing software subscriptions with a focus on SEO. They're one of the most trusted and effective brands out there in SEO right now and already have a ton of trust with their audience.
Despite that, they still know the value in offering people something for free before they purchase it.
With all the different software out on the market right now, it's often difficult for users to know which one they should try. By offering a 30-day free trial, Moz is doing customers a favor by allowing them to get free access to valuable information while also seeing if the product is right for them.
Everyone knows who Google is.
In fact, odds are that if you came to this page via a search engine, it's because Google sent you since they own over 90% of the world search engine market share.
Now, think of the last time that you paid for a Google product. If you can't think of anything that you've purchased recently, that makes since their biggest products are 100% free for people to use.
Yet the company generated around well over $100 billion in revenue in 2018 alone.
By offering so many high-quality products free of charge for so many people around the globe, people have come to trust Google. With that level of trust, it isn't difficult to convince people to buy the products that they do charge for.
Grow Your Business With The Reciprocity Principle
People naturally like to help those that help them.
If you approach business from a standpoint of how you can provide your customers value and help them in as many ways as possible, they'll show their gratitude for you in several ways.
So, instead of focusing on what you can get from other people, focus first on how you can serve people in the best way possible.
Once you've established a relationship of trust and value, people will be much more open to you capturing that value in return.
And you'll feel much better about your business!
It's truly a win-win for everyone.