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Reciprocity Effect – What Is It and How Can It Impact Your Buyers’ Behavior?

Reciprocity effect

Every relationship is based on reciprocation, either personal or business. It is intrinsic to human nature to positively reciprocate when they receive gifts or incentives. When it comes to the business world, the reciprocity effect can be used to influence consumer buying behavior. 

Buyer behavior is influenced by various factors; reciprocity, social proof, liking, scarcity, authority, commitment, and consistency. In this article, we are discussing reciprocity, types of reciprocity, and how it can impact your business. 

What Is Reciprocity?

Reciprocity involves exchanges between two parties that are similar in-kind and value. In simple terms, it is like giving and receiving gifts. All the social norms that apply to gift-giving, applies here as well. This is generally positive, but it can also be negative which we will discuss in detail later in the article. 

In business, reciprocity does not necessarily have to be a transaction with a direct financial gain. It is more of a strategy for building relationships between a business and its stakeholders. Reciprocity affects both consumer and business markets to varying degrees. It can influence buyer behavior, purchase decisions, products and pricing strategies, etc.  This will benefit the business in the long run.  

Types of Reciprocity

There are several types of reciprocity effects which you can find

Types of Reciprocity

Generalized Reciprocity

This type of reciprocity is usually altruistic. The giver does not expect anything in return. The act of giving is merely based on the assumption that the recipient would have done the same thing. 

Balanced Reciprocity

Balanced reciprocity considers the value of the exchange. It has the expectation that the receiver will return the favor with something of equal value. 

Negative Reciprocity

This involves an imbalance in the exchange. When one party is trying to get a better deal than the other, it is negative reciprocity. 

The above types of reciprocity can be further categorized into two; material or financial, and emotional. 

Material or Financial Reciprocity

This is when the exchange involves something materialistic or financial. A good example would be loyalty or referral programs where the customer gets an incentive for doing something in return. 

Emotional Reciprocity

Emotional reciprocity is more nuanced than the above. It is based on psychological factors such as recognition, or appreciation. It can be a simple thank you or an acknowledgment that makes the customer feel appreciated. This influences consumer behavior, especially in direct contact businesses. 

How Can Reciprocity Impact Your Buyers’ Behavior?

Reciprocity involves an exchange between two parties. If you receive something, you feel the need to do something in return. This intrinsic human nature is the foundation of reciprocity marketing. When you offer something to the stakeholders of your business, they feel an obligation to reciprocate the action, be it buying your products or recommending you to a friend. 

How Can Reciprocity Impact Your Buyers’ Behavior?

Increased Brand Recognition

If what you have offered to the customer has already given them a benefit, there’s a good chance that they would recognize your brand as a credible business. For example, if your brand has giveaways or free material available, the consumer is likely to interact more with your business. You have already reached the target customer ahead of the consumer decision-making process. This builds brand recognition. 

Customer Loyalty

If your business offers material or financial reciprocity, the customer may feel an obligation to take their business to the brand that has already given them something. A business needs to identify prospective buyers and offer them something in return for their business. If the post-purchase evaluation is positive, there’s a good chance that the customer will come back to you. 

Value Addition

Another key impact on consumer buying behavior would be the value addition a business offers. This is especially true for business customers. Business markets differ from individual consumers. Business customers tend to look for value addition to their purchases. If your business offers something intangible that adds more value to the customer, you have a better chance at influencing the purchase decision. 

5 Reciprocity Tips for Businesses

We have looked at how reciprocity can influence the patterns of complex buying behavior. From seeking reasonable prices to evaluating alternatives to habitual buying behavior can be influenced by reciprocity. Here are some tips on how businesses can use reciprocity to influence consumer buyer behavior. 

#1 Make Customers Feel Special and Unique

When you make an offer, even if it is a universal offer, do it in such a way that the customer feels it is personalized. Make the customer feel unique and special. This would create emotional reciprocity.

#2 Give Customers a Gift of Value

Make sure what you offer is a gift of value. It should make sense to the customer. It can be something that goes beyond the business relationship. I’m sure, many of you have received care packages, gift hampers, or vouchers from the businesses you interact with. 

5 Reciprocity Tips for Businesses

#3 Suggest Ways That Customers May Reciprocate

Do not order or directly tell a customer how they can reciprocate. Instead, make a subtle suggestion. Give them the power of choice. If you are trying to sell a pair of shoes, do not suggest the best pair of shoes. Give the customer the choice between two pairs of shoes. The chance is that the customer will make a purchase because it gives the customer the power of own consumer decisions.  

#4 Be the First to Give

Reach out to the customers first. Don’t wait till they make a purchase to an offer of goodwill. Consumer goods companies, usually employ this technique. Maybe a buy-one-get-one-free offer or a free item with a little bit expensive item would make the customers reciprocate by making a purchase. 

#5 Keep the Relationship Going

Don’t let it end with one act of reciprocation. Keep the relationship going. Consumer marketers continue their act of giving with seasonal offers or vouchers so that their customers keep coming back. 

Conclusion

The act or reciprocation is hard-wired to human behavior. Using that to understand buyer behavior, and influence rational purchase decisions is important for any business. Even though business sales tend to differ from consumer markets, both are affected by reciprocity. In this article, we discussed types of reciprocity, how it impacts buyer behavior, and some tips you can use. 

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