The Code of Hammurabi, one of the oldest sets of written laws has a detailed treatise on the theory of reciprocity. While the code’s description of reciprocity in much more visceral terms (“an eye of an eye, a tooth for a tooth”), what is important to note here is that this concept has been around since the dawn of time.
In the real world, you will notice instances of reciprocity all around you. The people who do good for the benefit of others are building a deep and emotional connection with them in the expectation that they do the same in return.
Now, reciprocity is not just limited to your parents, family members, friends, or close relatives. It is a relationship-building concept that can even be applied to your customers.
The following article explains how you can employ the psychology of reciprocity in business, and how it helps you boost your sales and conversions.
So, let’s start with the very basics.
Reciprocity and how it works
Let’s suppose you have a friend (we all have that one friend) who helps you out when you’re in a fix. Now would you pay it back when that friend is in need of assistance?
If you’d said yes to this dilemma, then congrats to you, you’re now a member of the “reciprocity club” since you’ve taken part in a mutually beneficial relationship.
Speaking from the definition, reciprocity is essentially a theory of actions; wherein an action performed by one individual is reciprocated by another action performed by the individual towards whom the first action is performed.
In simple terms, if you do something good for someone, then ideally, they should do something nice to you in return.
Now, let’s talk about business. Ever wonder why that restaurant waiter served you extra nicely? Or notice that valet handling your car exactly as how you would handle it? Well, they give off a good impression of their employer’s customer service with such actions and expect that you increase their tip, or come back again.
Reciprocity is the foundation stone of all profitable companies. By focusing on customer service, they expect more customers to come in. The best way your business can build such relationships is through a rewards program!
Reciprocity and a rewards program
Promotional discounts, free products, invitations to special events, members-only access to certain products, and coupons – you’ve heard of them all. They’re rewards given to consumers for being such good customers.
By providing value in the form of rewards, businesses create an emotional bond with the customers; who, in turn, are expected to become loyal customers who purchase more products or become brand advocates.
Now, the psychology behind it that when firms act in favor of the customers as opposed to profits, they make the customer feel at ease knowing that they’re looking out for them instead of just focusing on the bottom line.
This thought, combined with the discounts and promotions that they earn prompts them to make repeat purchases, and embody the voice of the brand.
While in the short run, it may seem for many businesses that they’re losing business, but it’s more valuable for the company in the long run.
Implementing a reciprocity program for your store
Now that you’ve got a primer on the psychology of reciprocity and rewards, its time you learn about implementing it for your business. Now, this guide is meant to target both online and regular businesses to ensure maximum value for individuals operating in any niche.
If you’re an eCommerce store on WooCommerce, then it’s best to use the Referral System plugin to implement some of the following strategies that we’ll be talking about in the coming sections.
Offer sign-up points and more…
Offering customers points for simply signing up on your site, subscribing to your newsletters, or having a birthday is a sure-fire way to make them a loyal member of your business.
When you award customers with points for the smaller things, it feels as though you’ve done them a great service. As a thank you in return, they are going to reciprocate by purchasing a product from your store.
What is important to note here is that these relationships create a lasting impression of your business in the eyes of the consumer and enables them to keep coming back to your offerings.
Why? Because the first time they purchased a product from you, they remember the fantastic customer service they received.
Referral System for WooCommerce helps you implement such a customer loyalty and rewards program for your store. You can integrate a points and rewards system and set up prompts for actions through which you would distribute those points to customers.
Reciprocity and social sharing
Another fantastic way to increase reciprocity is to reward the customer with points or coupons if they share your content or your brand on social media.
You can create a reputable social media following for your business very easily. You just have to provide good customer service, prompt them to share your brand on social media, and voila! You’re now taking advantage of their social circles for your business.
Additionally, you can also advertise your loyal customers on your website. The customers will be even more satisfied with what you’re doing for them and will reciprocate by voicing your brand on social media.
The primary benefit of it is that, in time, these customers do have the potential of becoming your loyal brand advocates who embody the voice of your brand both online and in the real world.
Referrals involve a three-way process of relationship building which, when done correctly, can mean a boost of conversions and sales for your business.
We said three-way since it involves a customer recommending your store’s product to their friends, family members, or close acquaintances.
In this relationship, everyone benefits since ideally, the referrer and the referee get points and rewards for taking this action. Both the former and latter can receive discounts on the products with this process. For the product owner, it means a new customer has arrived on the store and its time to nurture that lead.
Referral System for WooCommerce allows you to include such a referral functionality on your store either through points and rewards or fixed percentage/price discount coupons on referrals.
Add value to customer purchases
The best way to tempt a customer into purchasing your product is to add value to it. It could either be in the form of providing good customer service or simply adding a “freebie” to your customers’ purchase.
If it means that a customer will become loyal, there is no harm offering something a little extra with a purchase.
The psychology behind it is that when you give customers a bit extra, you’re essentially saying, “Hey, we care about you!” This creates a perception that you’re treating your customers like they’re VIP. Such small and courteous gestures can go a long way in ensuring that your customers will stay doing business with you.
It’s a program that offers success!
To conclude things, we would just like to say that reciprocity is an important factor both in real life and in any business setting.
While investing in reciprocity and rewards programs might sound counter-intuitive to your bottom line right now, you will accrue significant benefits with it in the long run.
So, go out there and start benefiting from the fantastic concept of reciprocity today!
Ammar Naeem, Head of Content, Codup