Exploiting the power of reciprocity
Source: http://blog.commercesciences.com
Imagine that you’re in your local ice cream shop and have just requested to taste their new dark chocolate ice cream. The server hands you a taste with a big smile. Having had a sample, what is the likelihood that you will leave without buying something? The likelihood is very low. This is an example of the principle of reciprocity at work. Reciprocity is a common sociological phenomenon which psychologists have documented for years and marketers have tried to harness. It boils down to a simple principle: People have an intrinsic sense of indebtedness after receiving a gift or favor.
Professor of Psychology Robert Cialdini explained the important role that reciprocity plays in marketing and sales, as well as five other principles (Commitment/Consistency, Social Proof, Authority, Liking, and Scarcity) in his bestselling book Influence: The Psychology of Persuasion (Check out his 5-min youtube video here). He explains the science behind what store owners have been practicing for decades: Free samplers, food and drink, or even small gifts have all been used in order to trigger the sense of reciprocity. While this idea is easily applicable in brick and mortar stores, it has been much harder to implement in e-commerce and Web based sectors.
How can reciprocity be used online?
Traditional methods can be used such a providing discounts, gifts, or product samples BUT it is very important to apply these correctly in order to maximize the reciprocal sentiment. Although it is not obvious how the reciprocity principle can be implemented as a part of online marketing, it is not as difficult as it may seem. Within e-commerce there are a number of ways to harness the value of reciprocity, you already may be employing the principle without realizing it! First and foremost it is important to recognize that merchandise is not the only thing that has value. Information and expertise are extremely valuable. By creating a free newsletter, blog, or trends webpage, you can not only drive traffic to your website but also establish a feeling of indebtedness for valuable information. Additionally free E-Books, white pages, or tools are great assets. These resources encourage reciprocity and can be used in order to get consumer contact information or drive sales.
While giving a customer 20% off or free shipping may seem like an example of reciprocity, the effects of expectation and the difference between personal or general reciprocity can minimize or maximize the sentiment of indebtedness. Free shipping was once a great example of a marketing method which developed reciprocity. As more and more sites have adopted this method, however, free shipping is now somewhat expected and not considered a gift. As a result customers do not feel any sense of indebtedness nor loyalty to a website that provides free shipping. That is not to say that you shouldn’t offer free shipping. It still may be a way to increase conversions and stop customers from searching for your competitors, but don’t expect them to keep coming back as a result of reciprocity. Free shipping now focuses on the economics rather than the emotional or social side of decision making.
Similarly, offering customers 10 or 20 percent off any order of 50 dollars is not a reciprocal form of persuasion. By establishing a type of bartering, the customer does not feel any indebtedness. In order for them to receive the discount they first must make a purchase. This is not reciprocity.
The candy study & its reflection on increased tips
The difference between general and personal reciprocity plays an important role in enhancing the effect of gift giving or discounting. General reciprocity refers to any offer which applies to all customers and is frequently advertised on the landing page. Personal reciprocity on the other hand, are offers or discounts which are made to specific customers during their buying experience. A study of tipping performed at Cornell University demonstrated that customers who received a small gift (mints) tipped more than those who did not. This demonstrates how general reciprocity can drive sales. People who experienced personal interaction and received that gift, however, tipped even more. The study also showed that people who were surprised and had a personal interaction gave the most (as seen in the graph below).
Tip Percentage Graph
(Data from study in the Journal of Applied Social Psychology)
Based on this information, forms of general reciprocity such as providing valuable information or tools will provide a preliminary level of indebtedness within customers, but the most effective method of harnessing reciprocity is to integrate surprise and personalization into the online purchase experience. For example, asking the user if they would like a discount when they have already started to make a purchase will help reduce cart abandonment and improve customer loyalty. Similarly sending surprise gifts along with purchases or during the shopping experience will increase customer lifetime value. While personalization is known to improve customer experience, reciprocity is yet another way in which personalization can be your X factor. By using both a low cost marketing campaign for general reciprocity and a more targeted personal reciprocity one, you will not only increase conversions but also develop a loyal customer base.
Originally published at blog.commercesciences.com on October 23, 2014.
