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give a littleTis The Season: Give A Little and Earn A Lot of Customer Loyalty

Reciprocity, or what I like to call the “favor principle”, is an element of social psychology that is very important to understand when running a business. It basically involves the feeling and response someone gives when shown an unexpected kindness. Essentially, when one person acts in a friendly way towards another person, the person receiving this kind actions will be far more inclined to reciprocate in a friendly or helpful manner. I guess that’s a really wordy way of saying, “give and you shall receive” and clever store owners can apply this very principle in marketing to their benefit.

What Is a Kind Action?

To understand the favor principle, you must first understand the nature of a “kind” action. The intent behind your action is the most important element, as this is what will guide how the favor is both received and reciprocated. When applied to business, a kind action is something that will make your customer feel unique or special. Finding a way to bring a bit of personalization to what you’re offering is a great way to achieve this.

Going back the main point of the nature of a kind action, the most critical element is making sure that your offer is a genuine attempt to give for the benefit of your customer. People know when they’re being bought, and when someone receives with no expectation of something in return, they are much more likely to reciprocate that gesture.

How We all Live by the Favor Principle

We know that people who function according to the norm always follow a certain process of giving and taking. Indeed, this rule of reciprocity is so engrained in our being that we simply can not fight it. History has shown that this system has actually driven the economy in various societies, where people traded goods rather than money, for instance. The barter model, in that sense, is the economical application of the psychological favor principle. As Peter Parker’s Uncle would say, ”with great power comes great responsibility.”

How to Use The Principle of Reciprocity

Understanding how to use the favor principle to win customer loyalty is vital to the success of your business. Luckily, it is actually very easy to understand how this works. All you need to do is give your customers something with perceived value, such as a piece of information, a service, a gift or anything else that would be considered as a favor. This will leave your customers with a sense of obligation.

At this point, you can ask for something in return like a positive review or a like on Facebook and you will be likely to receive it. A good example of this is found in Hare Krishna devotees, who would give a flower or publication away for free, clearly stating that it is a gift. Once accepted, however, they would ask for a small donation. In most cases, they would receive this and this has enabled this organization to grown substantially. Applying this to your sales strategy is a very effective manner of increasing customer loyalty and, thereby, profit.

How to Use It to Win Customer Loyalty Online

There are a number of ways that you can apply the favor principle to your online business. For instance, you can give away products, discounts and samples. But remember that what matters is that you do this in such a way that you build indebtedness in your customers. However, this can be quite difficult to grasp online, as you are missing the key ingredient of personal interaction.

human bean coffeeIn order to make your customers shopping experience more personal make sure that you address offers directly to the customer rewarding them for shopping at your store. For example I love my coffee. I stop by the Human Bean fairly often on my way in to work for my morning Americano. Yesterday I received a text from the Human Bean saying, “hey Chris, just wanted to let you know that if you stop by today between 1-2pm you can get a free coffee.” How much did I love that?

Ecommerce rewards programs like offering your customers a discount after they have added items to their carts, free shipping, or even a free gift are great ways to make customers feel special and encourage them to come back to your store.

This principle is so fundamental, so easy to implement and so frequently overlooked by new store owners. We can’t forget the simple truth that people buy from people, so forget about the hard sell and put human nature to work for you and watch your sales soar.

If you’re a store owner, I’d love to hear how you’ve put this principle to work for you or if you have any insightful tips on great rewards programs or creating a more personal shopping experience. Just add your comments below.

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