The first step to business growth is to give something away

Have you ever noticed that when you pass a smile to someone, they smile back? Or if you buy a coffee for a colleague, the next time they reciprocate? Or perhaps you helped a friend with a chore, and they’ll say ‘thanks, I owe you one’.

As people we live by the rule of thumb ‘give and you shall receive’ - it’s simple human reciprocity.

So why don’t more businesses apply this principle?

Many businesses think in terms of growth first and view giving as a loss, this is known as ‘Loss Aversion’ or ‘Prospect Theory’. Originally put forward by Kahneman and Tversky in 1979, loss aversion is a founding principle in modern behavioural economics and proposes that people weigh a loss more than a gain.

As a customer, you or I might apply loss aversion to deciding about a purchase e.g., Do I want to buy that perfume (gain) for that price (loss)? A business executive considers these same factors to frame decisions in relation to weighting and evaluating probabilities and developing a risk structure towards or against a preference.

This linear behaviour is mainstream, yet when we alter the decision process everyone stands to benefit.

Reverse Loyalty

As a Human Centred Design (HCD) practitioner a core principle I like to apply is ‘Be loyal before expecting loyalty in return’. At VMLY&R we call this ‘Reverse Loyalty’ and it's an approach we adopt globally when designing customer experiences (CX) in correlation to business growth models. ??

Why should businesses practice reverse loyalty?

To answer this, let us step into the shoes of a customer…

Imagine that as you enter a store you are given a little attention (who me? Why thank you), a little treat (glass of bubbles? Oh, go on then), a few loyalty points before expecting you to spend anything (well I wasn’t expecting that!)

What do you think this would make you: Think? How would you Feel? What would you Do? ?The answer is you would likely:

Think: "Well, that was nice, I’d like to spend some money here" - because now you’re less loss averse

Feel: Happier about spending money - as you’ve already gained something

Do: Likely spend more than you had intended.

Therefore, reverse loyalty proposes the customer gains both the 'gift' and makes a purchase therefore achieves overall higher gain balance and lower loss aversion, whilst in reciprocity the perceived business loss is also now a gain. Win, win.

One simple BS (behavioural science) step to get started

To apply this growth model the first step is to ‘Reframe’ the business ask through the lens of a customer. This means that instead of thinking ‘We need to get customers to…’ you instead start with a How Might We (HMW) statement, which in this case should be angled towards ‘How Might We give a little something to our customers…’

Whether it’s samples, sips of wine or service with a smile. Giving to your customers with no price tag, proposed deal or presumed contract yields higher returns.

One word of caution

?Make sure not to stray into manipulation.

The difference between influence and manipulation is key as we need to be careful not to stray into coercion. There are several influential factors (JGI and pick a list you like) when it comes to CX (and Brand Experience (BX). The ones I tend to keep front of mind are; relationships (who we know), knowledge (what we know), intuition (what we feel), experience (what we’ve done) and ability (what we’re capable of). A business might for example use an expert opinion to validate a product, or embed itself in a cultural movement. This is using, listening to and working with influence.

Manipulation involves the fabrication or manufacture of these principles, for example misrepresentation of statistics in headlines, a celebrity endorsing a point of view or result they have not officially qualified, or a personal gripe of mine ‘lash lengthening mascara’ when in fact the model is wearing false lashes <insert eye roll here>

In summary?

Give first

Receive without expectation*

No manipulation please

Sit back and watch your business grow

Feel good about it

Give back

Repeat

Repeat

Repeat

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*Don’t sulk if it’s not instant, you might get a few people who just take the free stuff and run – that’s OK.

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