The Concept of Reciprocity in Marketing

Androniki Bossonis

There’s a reason why supermarkets give out free samples…they are engaging a tried-and-true methodology derived from the Reciprocity Principle.

The reciprocity principle is a well-respected law of psychology, based on the natural human tendency to feel compelled to return a favor, or do something in return for having received something. Have you ever felt obliged, or even just inspired, to purchase the product you just received a free sample of? Retailers bank on this phenomenon that consumers are willing to purchase after receiving something for free (mainly because it works).

From an evolutionary standpoint, we likely survived as a species by being fair and cooperative with other tribe members. Whether or not there is a genetic component, the social behavioral norm of reciprocity is standard in just about every culture in the world.

The principle of reciprocity does not only apply to free samples at Costco; the concept is standard in marketing for all types of industries because it significantly increases conversion rates.

Are you more likely to sign a one-year contract if you get three months free? Are you more likely to buy two if you get one free? Would you sign up for a store credit card that you know you don’t need, in exchange for 20% off your purchase? Are you more likely to move forward with a service that offers a free, no-obligation estimate?

When generating leads online, what are some ways to utilize the concept of reciprocity?

Information: We’ve all clicked on an article headline that seemed like a good read, only to find a pop-up message from the publisher stating that we’re allowed 6 free articles, after which we’ll need a subscription. We’ve all tried a service or app for free for 7 days or 30 days before making a purchase. Have you watched how-to videos, and wondered why companies would spend time and money to give away free information? Marketers know that giving a little bit away will result in more sales in the long run, as opposed to requesting payment before receiving anything at all.

Gated Content: Have you ever downloaded a free guide, template, infographic, tutorial or white paper, or signed up for a newsletter in exchange for your name and email address? This is a key component of digital marketing for two reasons: you’ll remember which company gave you the free, useful information when it comes time to make a purchase decision, and they were able to capture your contact info for marketing nurture without violating anti-spam laws, since you opted in. It’s important to note here that if you want to offer gated content in exchange for contact info, make sure you are still giving away some content first. For example, your landing page should provide free content about the gated content, and how the gated content will benefit the consumer. In other words, make sure you give them something before you ask them for something, even if you’re just asking for their contact info.

There have been studies proving that site visitors show a much higher willingness to provide their contact information in exchange for informative content if they were given some free information first. Merely telling people to fill out a form in order to receive free content is not enough; the best results come from providing something first to engage the reciprocity principle.

You may recall when smartphones first became popular, it was normal for an app to begin asking for permissions to use your location, camera, microphone, etc., from the moment you launched the app for the first time. It took awhile for companies to realize their app usage experienced immediate drop-offs after a demand was made from the user. Nowadays, it is standard for apps to not ask for camera permissions until you click on a feature that requires a camera, or to not ask for location permissions until you select a feature that is location-specific. Software companies have learned to let people experience the app first before asking for anything, a.k.a. the reciprocity principle.

Free Estimates: Some of us are old enough to remember the days when home services industry consumers had to pay for estimates. The best-case scenario was that the cost of the estimate would be deducted from their invoice. This nothing-for-free attitude was standard until marketing behavior research has proven that the most successful campaigns and companies provided free estimates. Software platforms that utilize A.I. digital quotes/estimates technology allow companies to offer instant, accurate estimates on their website, 24/7, without putting a strain on their sales team. The concept of estimation-as-a-service allow home services industry companies the ability to digitally interact with and provide valuable information to consumers…casting your brand in a favorable light because you gave them something. Consumers appreciate the timely access to valuable information, especially when they don’t have to jump through hoops or wait to schedule appointments to get the answers they need. Your salespeople move from running around building estimates, to closing deals on estimates that the consumers chose to move forward with. More leads are converted to sales with less time spent working the leads (shorter sales cycle).

If you want to build trust in your brand, product, or service, you would be wise to consider being the first to provide something of value to you target audience. Whether during online engagements or in the field, offering something before taking sets the tone of trust and positivity at the crucial first stage of a relationship.

by Androniki Bossonis