Using reciprocity to trigger customer loyalty

How free whitepapers create customer obligation

Sometimes it helps to take a step back from the everyday tactics employed in digital marketing, and look at your customers from a different perspective. Take reports and whitepapers for instance. As digital marketers, we know that value adding free content works for customer engagement and for our search rankings. Google loves good quality, relevant content – and your customers and prospects gain great value from reading engaging reports and whitepapers (just take a look at Smart Insight’s own free range of reports and how to guides).

But let’s take that step back.

Let’s move away from viewing the world through our digital lens, and try and see it from a behavioural perspective instead.

Tactically, we know free content is a great customer acquisition tool, but could there be more to it than this? Could free content be used as part of your customer conversion, and even retention strategies?

Evolutionary origins of reciprocity

Humans are social animals, and over time we have developed a strict set of rules and etiquettes that guide our social interactions. This has nothing to do with good manners, and everything to do with evolutionary survival. During a relatively recent volcanic ice-age, sometime around 70,000 BC, the number of living homo-sapiens is suggested to have dropped to under 1,000 (that’s less than the world’s current population of Giant pandas!). The only thing that kept us from going the same way as the dinosaurs and Neanderthal man was our ability to operate as a team. Concepts such as justice, fairness and cooperation are hard-wired into our brains to aid survival, and are just as powerful today as they ever were.

This leads us on to the social science theory of reciprocity, which was first identified by Prof. Dennis Regan whilst studying at Cornell University in 1971. The theory states that the gifting of an item or service creates a social obligation for the receiver that they will feel the need to repay. From an evolutionary perspective, reciprocity means that people who give freely of themselves are well rewarded for their efforts at a later date, providing them with a social safety net when times get tough.

In Regan’s experiment, subjects were partnered with a stooge whilst enjoying a University art installation (the stooge was in fact Professor Regan’s assistant). The assistant would briefly disappear, returning with a free (and unasked for) fizzy drink for the subject to enjoy, before going on to ask the subject to purchase some raffle tickets. For the control group, the same situation was recreated, however, in this instance, the assistant asked the subject to purchase raffle tickets without first gifting them with a free drink.

As might be expected, the act of giving a free gift had a strong effect on the number of raffle tickets purchased, with the mean number of tickets increasing from 1.08 up to 1.73, once the gift had been accepted. In digital marketing parlance, that’s an uplift in conversion of over 60%. It was also noted that reciprocal value often exceeded that of the original gift, as raffle ticket spend more often than not exceeded the cost of the fizzy drink.

Customer retention is a strategy that can also be engendered through the use of reciprocity. Another classic reciprocity case study is that of Brigham Young University’s Philip Kunz. One year, Kunz decided to send out 600 Christmas cards to strangers selected at random from the phone book. The theory of reciprocity suggests that Kunz should have received a number of cards back from strangers feeling an obligation to him; and indeed, this proved the case, with over 200 turning up in his post box that year. However, what proves relevant to customer retention is the recurring nature of this obligation – the experiment took place in 1974. Fifteen years later, and Philip Kunz was still receiving Christmas cards from strangers!

So, how does all this relate to your digital communications strategy?

We have identified that the giving of free gifts, whether fizzy drinks, or written content, creates a social debt which the receiver feels an obligation to repay. Moreover, we have seen that this debt may be repaid at higher value than the initial gift, and that the obligation is a recurring one.

Much like Philip Kunz's Christmas cards, your online content, when given freely and packaged correctly, will generate long lasting customer obligation which will ultimately lead to increases in both your online conversion and retention rates.

How does this look in practise you may be asking yourself? Check out Simply Measured's example below for an understanding of how reciprocity should be employed online. With an impressive 12 (count them!) free report generation tools, I haven't even used their services, but am already feeling an obligation to them to sign up for a paid package!

Reciprocity is an essential part of the digital psychology toolkit

But how can you make reciprocity work for your digital marketing strategy?

• Be generous with your resources. Whether providing whitepapers, webinars, podcasts or infographics, be sure to provide beautiful and well-constructed content. In Kunz’s experiment, high quality/high value Christmas cards received significantly better response rates than cheaper looking/feeling cards.
• Avoid sales messages. Your infographic may be designed by Da Vinci and written by Dostoevsky, but the moment it becomes a sales piece, it loses all value as a reciprocity generator. Concentrate on giving your prospects a gift worth giving, cut the sales spiel, and let human nature do your selling for you.
• It’s all about the packaging. Ensure your prospects know you’re giving them something a gift through the use of both semantic and design devices. Be liberal with the word 'free' and ensure a distinct action is required by the prospect to gain access to their gift, such as a 'Click here to download your free PDF' call to action, (clicking a download button unconsciously signifies acknowledgement and acceptance of your gift in the prospect's mind).You can even package non-gift messages up as gifts, such as the below example from Amazon, who turned a promotional piece for their Amazon Prime service into a 'gift' through the use of a ribbon and bow design.

I hope you've enjoyed stepping outside of the traditional digital mind-set and into my exciting world of digital psychology. This is the first of a series of articles for Smart Insights on the subject, and I look forward to revealing many more secrets of online persuasion and conversion over the next few months. If you can’t wait until then – do drop me a line to learn more.