Psychology plays a huge role in marketing. Understanding how people think is the foundation for any effective marketing campaign. This is the reason why marketing professionals spend hours and hours compiling data about different market segments. We spend time doing research on market demographics, psychographics, and behavioral trends so that we can better understand our audience. Unfortunately, there is only so much that one can do by analyzing numbers and statistics. This is where psychology comes in. Understanding how your audience thinks is more valuable than any demographic statistic such as age, gender, and income. Psychology is the art of studying the mind, and the mind controls every single thing we do. Any serious marketer should study psychology to enhance their marketing abilities. This is the first of many articles to be posted on “Psychology in Marketing.”
A few days ago, I was reading a book titled “Influence: The Psychology of Persuasion” by Robert Cialdini. The book discusses the psychological phenomenons surrounding the art of influence, and how these principles can be used to increase your persuasion skills. This book is a “must read” for any serious marketer. After all, isn’t the general idea behind marketing to persuade your audience to purchase your product or service? This book highlights many valuable persuasion tactics, but, for the sake of brevity, I will focus on only one: the concept of reciprocity.
The concept of reciprocity is very simple. In short, the concept states that people feel obligated to give back when they receive. If you give someone something or do something for them, they will feel obligated to return the favor. This rule does not just apply to one market segment: it applies to everyone. Think back to the last time someone did a selfless favor for you. If you are like the rest of society, you probably felt an urge to do something in return for that person. The response is like a trigger, and most people are not consciously aware that it is happening. Understanding how reciprocity works and how it can be used to influence others will take your marketing efforts to a whole new level. Robert Cialdini writes that “The rule possesses awesome strength, often producing a yes response to a request that, except for an existing feeling of indebtedness, would have surely been refused.” Take a second and think about how truly powerful this is. Understanding this rule can help you receive a yes response in cases where you would have otherwise been refused. Imagine what that could do for your business.
This is great news for you. What this means is that you can use the reciprocation rule any time you want. All you need to do is give. The reasoning behind this is that most people will accept a “gift” when it is presented to them. In most cases, it would be rude not to accept. When a person accepts the gift, you have instilled a subconscious sense of indebtedness in them. Now, imagine if you started giving something away to a large number of people. You now have a large group of people who feel indebted to you or your company. If that is not a great marketing tool, I don’t know what is.
Robert Cialdini gives many great examples of this in his book. Long story short, exchanges do not need to be equal for the reciprocation rule to work. This concept is fairly easy to understand. Think about a time when someone was kind enough to give you something that may be considered insignificant. This can be something as simple as a drink or a piece of gum. The fact remains that you probably felt some desire to return the favor, and you were not focusing on the monetary value of the exchange. You probably didn’t think “I received a soft drink, so I owe someone a soft drink,” but instead, “This person did something nice for me. I would like to do something nice for them.”
Chances are, you already know where I am going with this. You can utilize the rule of reciprocation in many aspects of your business. Here are just two examples:
“What!?!? This is madness!! I can’t just give my product away for free!” If you are thinking like that, you have failed to understand the rule. Giving something away for free is your way of “investing” in a new customer. If you are already engaging in marketing of any sorts, you are spending good amounts of money to acquire new customers. This means that you are already “investing” in new customers. Why not try a new tactic? Giving something to your customers can serve many purposes. It can be a sign of goodwill, it can allow customers to try out your product when they otherwise may not have been inclined to, and, of course, it initiates the reciprocation rule. Now, I am not saying to just give your product away because that wouldn’t be realistic. I am just saying that you should give something away. This can be as simple as a smaller sized sample of your product, a free coupon, or even a valuable piece of information. Remember, the reciprocation rule states that exchanges do not have to be equal. What you choose to give away should be relative to your business. Keep in mind that you should not be giving something away just for the sake of receiving something in return. People are not stupid and they know when they are being manipulated. You also do not want to give the freebie to as many people as possible just for the sake of it. Focus on customers that are good for your business, as some people just enjoy the excitement of free stuff. Make sure that you give something that a) is cost effective for your business b) actually provides utility to your customers, and c) seems like a genuine gift. If you can balance the three, you should see great results.
Many businesses are troubled with the issue of keeping their employees motivated and working hard. The issue is not all that trivial if you know how to handle it. If you need something from your employees, what is a great way to get it? You guessed it: the reciprocation rule. Of course, you are not going to be giving your products away to employees as that would not serve the same purpose. Instead, give your employees what they want or need. I can give you a personal example to support the power of this tactic. When I have employees that are performing well, I will often reward them with a paid day off or a similar reward. While you can wait for your employee to ask for it, you can also initiate it, which is exactly what I do. Some people may argue that it is inefficient to give an employee a paid day off when they haven’t asked for it. That could not be more wrong! When I have used this tactic in the past, employees have been extremely grateful and it showed in their work. I have seen productivity increase by as high as 50% for a single worker after I rewarded them with a surprise paid day off. Of course, I was not using this tactic to manipulate my employees. I was using it as a reward for good work, but the effects remain the same. If you’re all about the numbers and want to talk about ROI, I would trade one day’s salary for a 50% productivity increase any day.
Hopefully, by now you understand the sheer power of the reciprocation rule. If you know how to use it properly, it can be a great tool for your business. In most cases, taking advantage of the reciprocation rule will have multiple benefits, such as getting customers to try your product. It can also be used to gain a competitive edge in industries where your competitors are not utilizing this tactic. Think of the different ways your business can use this tool to grow. I have given two examples, but there are many more. Get creative, be genuine, and use the proven power of psychology to enhance your success.
Like any marketing tactic, this will not work 100% of the time, and tweaking and optimization are vital to the success of this tactic. Make sure to utilize this tactic in a way that is right for you and your company. Know what your goals are and use this tool as a way to achieve them when when possible. Think about how your audience will react to your efforts and make sure this aligns with your brand objectives.
Free Reports/Analyses – Some companies will offer free reports or consultations to potential customers. Of course, this serves the purpose of getting new clients interested in your company, but the reciprocation rule is still present. Which company are you more likely to work with: one who has provided you with valuable information or one who is simply selling their services?
Free Accounts for Paid Services and Product Demos – A lot of service based companies with multi-level packages will offer free accounts to attract new clients. This serves the purpose of allowing customers to test your product before they buy it, but it is also a favor to the customer. Which company are you more likely to work with: a company who has allowed you to try their product for free or a company who insists you pay to be able to use their product?
Free Samples – Giving away free samples is not a new concept. Companies give out free product samples to allow consumers to try their product before they buy it. Giving away free samples can also leave customers feeling indebted to a business. This works especially well when the free sample is given in person. Which company are you more likely to work with: a company that has given you a sample of their product for free or a company that merely advertises the benefits of using their product?
Coupons – Distributing the right coupons can trigger the reciprocation rule. I received a coupon for a free pizza one time. When I went to use the coupon, I ordered other food as well because I didn’t feel right just taking the free pizza. Giving away useless or low value coupons will not have the same effect. Which company are you more likely to work with: one who has given you something for free or one that keeps asking for your money?
Friendly Gestures – Many companies send out holiday and birthday cards to their clients. They get absolutely no monetary gain from this….or do they? Taking the time to give someone a well-written note can be considered a favor by many people. The recipient is usually left with a positive feeling, meaning they are ready to reciprocate. Which company are you more likely to work with: one who has given you personal attention or one that seems like a faceless money machine?