The Rule of Reciprocity is a basic law of social psychology that says we pay back what we receive from others. In other words, if someone does you a favor, you’re likely to return the favor. If someone provides value to you, you’ll feel inclined to reciprocate.
Think of reciprocity as a loop. When another person opens a loop of reciprocity, we feel an urge to close the loop.
Reciprocity has an even stronger effect than simply prompting an equal return. We have a deep-seated need to feel even. If you do something nice for someone else, they’ll feel a strong desire to do something nice for you. We have an intrinsic need to wipe away any trace of indebtedness. We don’t want to feel like we owe someone, so we’ll do whatever it takes to settle up. For this reason, if you give someone a gift, they’ll not only get you a gift, but it will likely be a gift that’s slightly greater in value.
For instance, if you and a friend go to a coffee shop and you pay for their coffee, they’ll be more likely to buy you lunch in return. A lunch is more valuable than a coffee, so by paying for a full meal they wipe the slate clean without any doubt. Unless you already understand how the Rule of Reciprocity works, this kind of thing happens all the time and almost entirely on a subconscious level.
You can use this basic principle to your advantage by going out of your way to give someone value. In doing so, you increase the likelihood of them buying what you have to sell.
When you give something of value to someone else, you generate credits. You’ve built up goodwill. It’s not necessarily guaranteed that they’ll reciprocate on their own, but if you ask for something in return, they’re much more likely to oblige.
Lead with Giving
In any encounter, we constantly evaluate whether someone is a giver or a taker. “Is this person offering value to me or trying to take something from me?” The way we determine this is simple: Did they lead with giving or with asking? It’s all about the first act.
Give first, then ask. Never lead with an ask before you’ve given value. You have only one chance to make a first impression. The first impression cements your intentions. Let your first impression be an offer to help, provide value, or give. If you mess this up, you’re automatically labeled as a taker, and takers get ignored. Nobody likes takers. The worst offense is when someone responds to a gift with yet another ask! This works against the Rule of Reciprocity.
If you want to build a relationship with someone who’s an influencer, give them something of value—with no strings attached. Just do something nice for them. Don’t give value and then ask. Don’t ask for anything at all. Just give.
Well-known people are constantly solicited. Everyone asks them for favors. Giving is the only way you have a chance at receiving a response. You can’t ask first; you must first provide value. Even then, that’s just the cost of entry. Chances are you still won’t get anything from this person because they probably deserved whatever you gave them. After all, they’ve already given you value, which is why you’ve heard of them in the first place.
Build the relationship first. If you want a fighting chance at making a good impression, you have to establish yourself as a giver and not a taker. The only way to do that is to give with no strings attached. Do not ask for something in the first message. Don’t even ask for something in the second message. The words me or my should be absent from your entire message. Your language should be all about them. Say, “How can I help you? Is there anything I can do for you? I noticed you could use some help, so I went ahead and did this for you. Thanks for everything you do.”
The next step is to repeat. Keep giving more. If you don’t get this through your head, you’ll be ignored. There are millions of people out there who all want to take. They want to take time, money, attention, resources, advice, exposure, audience, and endorsement, and they’re unfortunately all too common. These people are cheaper than a dime a dozen, and they will be ignored.
Do you want to stand out? Be different. Give.
When people see you as a giver, an incredible thing happens: people become motivated to outgive you!
If you’re focused only on yourself and trying to get whatever you can, you’ll blow your chances of getting anything because you’ll be labeled as a taker.
What you should be doing is incentivizing someone’s inherent generosity. Giving incentivizes giving. By offering value with no strings attached, people are motivated to outgive you. Not only do you feel good, but you make them feel good for giving, and you will get more than you ever could have hoped for in the first place.
Close the Reciprocity Loop
Giving value comes in many forms, but it’s always a great way to get attention. Depending on your goals and what you’re selling, value could be secured through free samples, educational material, a chapter of your book, a lesson from your course, videos, and more. Sometimes it can be services or personalized advice provided free of charge.
Freely giving of yourself sounds strange coming from a business perspective, but it’s an investment in the long game. You could sell everything, and certainly some businesses do, but by giving away just 10 percent of your best material for free, you breed loyalty. You also create an interesting story that causes people to spread the word about you.
Maybe you notice someone who’s been a longtime fan. What if you reached out to them and sent a personal message or gave them something for free? What if you sent them a gift? Think about the impact that can have! Because people are hardwired to return favors—and even go above and beyond in doing so—you’re almost guaranteed repayment in some form. Maybe they come back and buy an even higher-priced item out of gratitude. Maybe they tell all of their friends about you. Giving some value for free can be a great marketing strategy. You certainly can’t give everything away, but even something small will go a long way.
The goodwill you’ve built up—or credits—won’t last forever though. If enough time passes, these credits can expire. From a business perspective, you want to cash in on the reciprocity by closing the loop with an ask in a reasonable amount of time. Some people will inherently pay you back after you’ve done something for them. Others will happily do so but only when prompted. It’s important that you don’t wait too long or the reciprocity will expire, and an open loop will no longer exist.
Spend Your Reciprocity Credit Wisely
This is where you need to be strategic about how you spend the reciprocity credit. For instance, let’s say you sell coffee mugs on your website for fifteen dollars. If you’ve invested heavily into a person and given them a lot, they will likely feel the desire to repay you. But if the value of the investment you made isn’t clear, then any repayment will close the loop. So, if you’ve given them two hundred dollars’ worth of value, but that value isn’t clear or it’s intangible, they may simply buy a fifteen-dollar mug to repay you. From their perspective, the reciprocity loop has been closed.
It’s worth thinking long and hard about the options you have available for people to close the loop of reciprocity. Creating value isn’t free: it costs you either time or money. From a business perspective, you have to think about that investment. Maybe, if you had a five-hundred-dollar product, the person you invested in would have bought that. They might have bought the mug simply because it was the only option available. They were willing to pay you back in any way possible, but the means you had for doing so were limited.
Consider the extent of the value you’re providing. If it’s significant, you want to make sure equal and adequate opportunities are available for someone to compensate you back. If you don’t have products or services large enough to match the amount of value you’re providing, consider either creating them or decreasing the amount of value you deliver up front. Otherwise, such lopsided reciprocity will result in giving yourself out of business.
Don’t Display Ads or Seek Sponsorships
When you put ads or sponsors on your content, you’re selling your listener or viewer as the product. They are the product because you’ve sold their attention to the advertiser. You are the seller, the advertiser is the customer, and the audience is the product.
When you sell your listeners’ attention or data, they become the product. This earns you zero reciprocity credits because you dictated the terms of the transaction. By selling the attention of your audience, you’ve defined the payment method: attention. Your audience is paying for your content with their attention. They didn’t make that choice; you did. As a result, the transaction is complete and the reciprocity loop has been closed.
If you have ads or sponsors on your content, reciprocity between you and your audience ceases to exist. The debt has been paid in full. It doesn’t matter if your customers have paid you $0.00. They owe you nothing. You don’t get to call them freeloaders. The arrangement you set up was to make your audience the product. You then sold the product, your audience’s attention, to the advertisers. This closes the reciprocity loop and completes the transaction.
You have no leverage to ask the audience to buy your products because you already spent any reciprocity credits you might have earned. You can’t guilt them into donating because you already forced them to pay you with their attention.
All things considered, monetizing with advertisements and sponsors is a shortsighted strategy. You cash in on the immediate transaction, but no reciprocity remains for even greater compensation.
Relationship marketing is a different way of doing business. We’ll cover relationship marketing in greater depth in the next chapter, but, essentially, you don’t make your audience the product. Instead of selling your audience, serve them. With relationship marketing, you don’t put ads or sponsors on your content—you’re not selling their ears, eyes, and attention to advertisers. What does that mean? It means you’re providing free value to people and giving them the opportunity to compensate you back. You’re not mandating the transaction terms. Rather, you’re giving them the choice of whether or not to be a freeloader.
Be Wary of Donations
What’s wrong with donations? Absolutely nothing. But it might be shortsighted to accept donations if you want to make money.
Donations are a way to give people money if you’ve gotten value from them or you believe in what they do. It’s an alternative to general commerce, where you buy goods or services and exchange money. A donation is often based on a feeling. Maybe someone did something good for you or you enjoy their show and they accept donations. A donation is a way to pay someone back and let them know that you appreciate something they did.
Who wouldn’t want to take donations? It’s great to get money for what you do. Maybe you run a show or regularly provide free education. If someone wants to donate money to you, why in the world wouldn’t you take their money?
Because it closes the reciprocity loop.
Just as with small products, if you provide an opportunity for someone to close the reciprocity loop with something disproportionately small, you will leave money on the table. For instance, if you provide a tremendous amount of value to someone—let’s again assume it was roughly worth two hundred dollars—and you accept donations, that person can donate five dollars to you and they will feel as though they’ve satisfied the reciprocity loop.
When I was in need of developmental work, my friend Daniel offered to help. He volunteered his own time, came up with a solution, and delivered it for free. It was very generous.
I asked, “Where’s your tip jar?” I wanted to donate to him. The Rule of Reciprocity had kicked in, and I felt a strong urge to repay him for the value I’d received.
He said, “No tip jar.”
Now, you might be thinking, “How foolish! He just left money on the table.” That was certainly the first thing that came to my mind.
Immediately, I thought, “If he had a tip jar, I would have given him money right now.” I was sure he was missing out, but I was being shortsighted.
Look at what happened: Daniel didn’t have a tip jar, but let’s assume he did. What would have happened? Maybe, in the best-case scenario, I give him fifty dollars. He now has fifty dollars and the reciprocity loop has been fulfilled. He gave me value for free, I paid him back for that value by donating, and now everything is good. The reciprocity loop is closed and the debt has been paid.
This is what most people are satisfied with. They host a regular show, provide educational material, and accept donations, and they allow the reciprocity loop to be fulfilled.
Most people are willing to take this donation money and call it good, but there’s a longer-term play they’re missing out on.
Daniel didn’t have a tip jar, but what did he ultimately get from me?
I talked about him on several of my shows, giving him exposure to thousands of people. I ended up buying his products. I gave him publicity because I felt indebted to him. I gave him thousands of dollars’ worth of exposure. I couldn’t stop talking about the great thing he did.
Don’t underestimate just how huge a breath of fresh air it is when someone gives of themselves freely with no strings attached.
According to the Rule of Reciprocity, when we receive value from someone, we want to pay back that value—it’s intrinsic human nature. The important point is that we not only feel indebted to repay someone, we also want to outgive them. We’re motivated to outgive them because we want to wipe away any trace of indebtedness.
By not accepting donations, you can build up reciprocity that, in the long term, can come back in a much greater form than a small donation. If you have higher-end products and services in place, foregoing even hundreds of donations can be worth the tremendous amount of reciprocity that builds up to the point where one person decides to hire you for a large project. Depending on the client, a large project may be worth tens of thousands of dollars. A high-end product may be worth hundreds or even thousands of dollars. How many times would it take someone donating five or ten dollars to add up to the same amount? When you allow people to donate, you allow them to satiate the reciprocity at an incredibly undervalued amount. They’ll feel like they’ve paid you back and move on.
But if you don’t allow people to donate when you do something for them, you’ll build up such a great desire in them to repay you that they’ll hardly be able to contain it. Even those who don’t pay you back in money will sing your praises to everyone they know.
Look at me: I still can’t stop talking about Daniel—and I don’t think I ever will!
- The Rule of Reciprocity is a basic law of social psychology that says we pay back what we receive from others. In other words, if someone does you a favor, you’re likely to return the favor. If someone provides value to you, you’ll feel inclined to reciprocate.
- You have only one chance to make a first impression. The first impression cements your intentions.
- Your first impression should be an offer to help, provide value, or give. If you mess this up, you’re automatically labeled as a taker, and takers get ignored.
- If you want to build a relationship with someone who’s an influencer, give them something of value—with no strings attached. Don’t give value and then ask. Just give.
- Freely giving of yourself sounds strange coming from a business perspective, but it’s an investment in the long game.
- Giving away your best 10 percent can be a great marketing strategy. You certainly can’t give everything away, but even something small will go a long way.
- If you have ads or sponsors on your content, reciprocity between you and your audience ceases to exist.
- What’s wrong with donations? Absolutely nothing. But it might be shortsighted to accept donations if you want to make money. By not accepting donations, you can build up reciprocity that, in the long term, can come back in a much greater form than a small donation.