Field Guide to a Product Mind: Reciprocity

By Jonathan Savage

You book the same hotel instinctively, remembering the personalized gift and message they left for you after a previous visit.

A friend pays you a compliment on your new coat and almost reflexively, you respond with a similar comment about their shoes (whether you like them or not).

You sign up for a free trial of a music streaming service and seeing the value decide to subscribe.

What is reciprocity?

Reciprocity is a principle of social influence that states that people are more likely to comply with requests if they have received something from the requester first. This principle, popularized by psychologist Robert Cialdini in his book “Influence: The Psychology of Persuasion”, posits that people have a natural tendency to want to repay others who have provided them with something of value, either material or social, creating an obligation to reciprocate. In this way, reciprocity can be a powerful tool for persuasion.

What causes it

Social norms: In many cultures, there is an expectation of reciprocity and a sense of obligation to repay others for their kindness or generosity.

Psychological factors: Humans have a natural tendency to want to repay others who have provided them with something of value, either material or social. This can create a sense of obligation to reciprocate.

Emotional connection: When people have a strong emotional connection with someone, they may feel a greater sense of obligation to reciprocate.

Reciprocal altruism: Evolutionary psychologists believe that reciprocity is a result of reciprocal altruism, which states that individuals who act altruistically towards others are more likely to receive altruistic acts in return.

Perceived fairness: People are more likely to feel obligated to reciprocate when they perceive that the interaction was fair and equitable.

Reciprocity in 3 Modes

In Stone Age Economics (1972), anthropologist Marshall Sahlins identified three modes of reciprocity, Generalized Reciprocity, Balanced Reciprocity and Negative Reciprocity.

Generalized reciprocity refers to a form of social exchange in which individuals give gifts or favours without expecting immediate compensation. It is based on the expectation that members of the same social network will reciprocate these gifts in the future.

Balanced reciprocity refers to a type of social exchange in which individuals engage in mutually beneficial exchanges of goods or services and expect immediate compensation. The exchange is considered “balanced” because each person gives and receives equal value in return.

Negative reciprocity refers to a type of social exchange in which individuals attempt to take advantage of others by providing goods or services of lesser value than what they receive. This type of exchange is characterized by exploitation and is often referred to as “cheating” or “defecting.”

Reciprocity in Action

Free Trials

Free trials are a common example of how businesses use the principle of reciprocity to influence consumer behavior. By offering a free trial of a product, businesses aim to create a sense of obligation for the consumer to buy the product after the trial period.

Here’s how it works: The consumer is given access to the product for a limited period of time, typically one to two weeks. During this time, the consumer can try the product and experience its benefits. At the end of the trial period, the consumer must either purchase the product or return it.

The idea behind the free trial is that, by allowing the consumer to experience the product for free, the business has provided the consumer with something of value. As a result, the consumer is more likely to feel a sense of obligation to repay the favor by purchasing the product after the trial period.

Additionally, the free trial allows the consumer to try the product and see if it meets their needs and expectations. This can increase the likelihood of the consumer making a purchase, as they have already invested time and effort into the trial and are familiar with the product.

The clearest example of this is the concept of ‘freemium’ and in-app purchases in mobile. The attempt is to over-deliver a bespoke unique experience and have the user invested in it so much they ‘reciprocate’ by paying for the premium version.

Gift with Purchase

Gift with purchase is a common example of how businesses use the principle of reciprocity to influence consumer behavior. This marketing strategy offers a free gift to customers who make a purchase, creating a sense of obligation for the customer to buy from the business.

Here’s how it works: The customer makes a purchase, and as a result, receives a free gift. The gift is typically something that complements the purchased product or is related to the brand.

By offering a free gift, businesses are providing their customers with something of value. This creates a sense of obligation for the customer to continue to buy from the business, as they feel that they are being rewarded for their purchase.

Additionally, a gift with purchase can help to increase the perceived value of the purchased product. The customer is more likely to feel that they have received a good deal, and the gift can increase their overall satisfaction with the purchase.

Customer Loyalty Programs

Customer loyalty programs are a common example of how businesses use the principle of reciprocity to influence consumer behavior. These programs are designed to reward customers for their repeat business, encouraging them to continue to purchase from the company and creating a sense of obligation for the customer to keep buying from the business.

The customer signs up for the loyalty program and earns points for every purchase they make. These points can then be redeemed for rewards, such as discounts, free products, or exclusive access to products or services.

By offering rewards for repeat purchases, businesses are providing their customers with something of value. This creates a sense of obligation for the customer to continue to purchase from the business, as they feel that they are being rewarded for their loyalty.

Additionally, customer loyalty programs help to foster a sense of community among customers and create an emotional connection with the business. This can increase customer loyalty and make it more difficult for customers to switch to a competitor.

This can be seen in the strategy of gamification, where a company adds gaming mechanics into non-game environments, where users are ‘rewarded’ for completing actions, driving increasing engagement and willingness to purchase to gain advantage and greater reward in the activity.

Referral Programs

Referral programs are a common example of how businesses use the principle of reciprocity to influence consumer behaviour. These programs offer incentives for customers to refer their friends and family to the business, creating a sense of obligation for those referred customers to make a purchase.

Here’s how it works: The customer is given a unique referral code or link to share with their friends and family. When someone makes a purchase using the referral code or link, the customer earns a reward, such as a discount, free product, or cash.

By offering incentives for referrals, businesses are providing their customers with something of value. This creates a sense of obligation for the customer to continue to refer others to the business, as they feel that they are being rewarded for their efforts.

Additionally, referral programs can help to generate new customers for the business and increase brand awareness. Because of social proof, the referred customers are likely to trust the recommendations of their friends and family, making them more likely to make a purchase from the business.

Upsells

Upsells are a common example of how businesses use the principle of reciprocity to influence consumer behaviour. This marketing strategy involves offering customers the opportunity to purchase a more expensive or upgraded version of the product they are considering.

Here’s how it works: The customer is interested in purchasing a product, and the salesperson offers them the opportunity to upgrade to a more expensive or enhanced version of the product. The customer is told that by purchasing the upgraded version, they will receive additional benefits or features.

By offering an upgrade, businesses provide value to their customers. This creates a sense of obligation for the customer to take advantage of the offer and purchase the upgraded product, as they feel that they are receiving a better deal.

Additionally, upsells can help increase the business’s overall revenue and profitability. The customer is more likely to spend more money on a more expensive or upgraded product, which can increase the average transaction value.

Networking Events

Networking events are a common example of how businesses use the principle of reciprocity to influence professional relationships. These events provide opportunities for professionals to connect, build relationships, and exchange ideas.

Here’s how it works: Professionals attend a networking event, where they can meet and interact with others in their field. They exchange business cards, engage in conversation, and often share ideas and resources.

By attending a networking event, professionals are providing their time and effort to connect with others. This creates a sense of obligation for the others in attendance to reciprocate and connect with the professional, as they feel they are receiving something of value.

Additionally, networking events can help to build long-term professional relationships. Professionals are more likely to remember and follow up with individuals they have met in person, which can lead to future collaborations and partnerships.

Final thoughts

Reciprocity is a powerful principle that significantly impacts human behaviour and decision-making. Through understanding and utilizing this principle, businesses and organizations have been able to harness its power to influence consumer behaviour and drive sales. From gift-with-purchase to customer loyalty programs, reciprocity has become an increasingly popular tool for businesses to promote their products and services. However, it is important to remember that reciprocity should be used ethically and with consideration for the consumer. As the principles of influence continue to evolve, it is crucial for individuals and organizations to stay informed and adapt their strategies accordingly. By doing so, they can leverage the power of reciprocity to achieve their goals and drive success in the long-term.

In terms of product thinking and product development, practitioners should always be looking at ways to increase a user’s investment in their product. And why “the first mile of product ” is so critical. Any great onboarding experience for digital products is an exercise in perfecting the reciprocity principle.