Have you ever received those envelopes in the mail where there’s a little clear window on the envelope and a bright shinny nickel sits there staring you in the eye?
Or perhaps you have donated to St. Jude’s Children Hospital and a month or two later you receive a note in the mail requesting for another donation; however, the request is also accompanied with a gift from the children to you (usually self-adhesive stickies of your address for envelopes)…
Although giving you money out of the blue and giving you free gifts is a nice gesture, there is a marketing tactic going on here which you may not be aware of.
It’s the art of reciprocation.
This is a long time and heavily tested idea which sociologist and psychologist have been studying which shows that we humans have a mechanism inside us which feels the need to repay a favor (or debt). In most cases it comes from our childhood and it’s a notion smart marketers have been implementing in their business for some time now.
Take a look at this study where the American Statistical Association did a test where part of the test was to determine if financial incentives reduce non-response bias in filling out mail surveys. Basically, they were curious if sending a small monetary gift with the survey increased how many people actually took the time to complete and send back the survey.
If you scroll down to page 3 of this study, you’ll see that indeed freely giving away a monetary gift which the subject could keep regardless of whether or not they did the survey resulted in a higher compliance rate than simply asking people to complete and return the survey. It also seems that the more money the subjects were given, the more likely they completed the survey.
How This Relates To Making Money
If you’re a blogger looking to “monetize” your blog, or better put, make money by setting up an Internet business, then you can use the idea of reciprocation to further your profits and make more sales.
Understand that in our society, people have a strong urge, and even might feel pressured, to reciprocate a “gift”, even if it’s an unwanted gift. But on the flip side, no one wants to feel pressured to purchase an unwanted product you might be offering them.
What can you set up in your business which acts like a gift and in return plants that little seed in someone’s mind that they should repay you by purchasing your services?
I of course can’t answer that question for you, it’s up to you to figure out.
My brother and I are going to test this in our local landscaping business. As of right now, my brother does about 25 presentations (a.k.a. bids) a month where he comes up with a landscape plan and cost for a project. He has about a 50% success rate in closing the sale (which is really good by all counts) and this morning we had a business development meeting where we looked at ways to increase his success rate.
The idea of reciprocation was in the forefront of our discussion (and consequently is what spawned this blog article from my fingertips).
We are going to test giving away free $25 gift cards and $50 gift cards redeemable at Lowe’s (a garden and home improvement store). The gift cards will be exactly that…
The potential customer will receive this gift just for inviting us over and listening to our pitch.
So let’s do the math.
Assuming Lowe’s does not give us a deal on gift cards, then if we purchase 25 gift cards for $25 each, then we’d be spending $625 a month in gift cards. If we increase our sales per month by just 1 sale it would be worth it (our net is typically more than $625 per project).
But imagine if we could increase from a 50% success rate to a 60% success rate. That would mean about 2 or 3 more landscape projects a month and thousands of more dollars, just for a $625 investment.
I’ll let you know if the test is a success.
How the Internet Marketing World Does it Differently
Have you ever heard experienced marketers tell you that in order to get people to opt into your email list you need to give away a free mini course or ebook?
Well, yes, that tactic works and is one I implement on pretty much all my niche sites in which I collect email addresses; however, this is reciprocation in reverse. First we are asking for something (i.e. a favor), the person’s email address, and then we will give them a gift.
But what if we changed things around?
What if you give them a gift first and then asked for something in return?
Perhaps you give them a free membership to your program and in that program you show them how you’re the authority, and in that program you push how important your newsletter is to be on.
It’s not the traditional way marketers do it, but certainly warrants testing and is something I’m going to try doing when I release the classroom area of Blog Training Classroom (yes I’m working on it after my hard drive crash lost almost everything I had been working on).
My purpose here is to question the norm and push ahead as a leader in your industry.
Leaders don’t follow, they set the pace and bar at which others follow their lead.
A Word of Warning In Regards to Free Stuff
By doing a favor for someone, even if small or unwanted, has been proven to be effective in influencing others to do what we want. But I would like to offer a word of caution when it comes to doing favors for people.
What you don’t want is to get yourself caught up in doing a ton of favors for people which ultimately could cause you a lot of your time and possibly money.
Back in the day when my WordPress Defender product was new, I would happily do customers little favors here and there, including things like doing the upgrades for them if they bought my book.
Many times this caused more problems than benefits.
Yes if I solved their problems for them they would feel in debt, but because some people had really weird WordPress installations, sometimes the upgrades wouldn’t go as planned and thus their blog might break.
I remember some times I’d spend days working on someone’s blog trying to undo something which I did and didn’t work because their blog had something not normal to it.
In my brother’s landscaping business, he use to do favors for potential customers while he was on a bid if it was something he saw he could fix easily, like setting the correct watering times on the person’s sprinkler timer.
One person’s timer broke when my brother tried to turn the dial.
Who’s going to fix it?
Reciprocation works, if you take the time to figure out how to implement it properly in your business.
What sort of things do you think you could offer as a free giveaway and might be seen as a favor to one of your current or possibly new customers?
Note that the Blog Marketing Academy link is an affiliate link of mine