When’s the last time you paid for breadsticks?
It sounds like such a strange concept, right?
Thought so.
From breadsticks, free samples, and fortune cookies, there is one common theory that growth-loving business owners have been employing for ages.
And that concept is called reciprocity.
In this guide, we’ll look at how you can leverage reciprocity to supercharge your growth and make more sales.
Reciprocity Works
Giving your prospects and customers things for free is powerful.
When you give them something for free, you can elicit a number of feelings from them that can lead them to take action – sometimes without them even knowing that your freebie caused it!
You can say that we are built to give back.
In social psychology, this process is known as reciprocity or the process of rewarding positive action with another positive action.
We feel happy, positive, and sometimes even elated when we receive things for free.
Our automatic reaction right after is to do something for the giver.
There are the usual pleasantries of expressing your gratitude through words, but most of the time, you want to do more for the person and find something of equal value to exchange for the prior good deed done to you.
The key here is understanding the human connection and the social behavior associated with giving things out for free.
This is how a lot of businesses have successfully leveraged reciprocity to grow.
Why Breadsticks?
The best examples of freebies isn’t even in SaaS!
It’s breadsticks.
Notice that when you go to most restaurants for a sit-down dinner, they give you free bread when you get comfortable?
They do that for a number of reasons:
- Bread is cheap – they can easily factor the cost of the bread into your meal or the overheads.
- Bread keeps customers engaged – they can easily forget about the wait time for the meal and it gives them something to do.
However, the two other reasons they do it are because:
- Bread makes them happy
- It might induce them to want to tip or order more
As you can see, the real reason they utilize reciprocity is to enhance the experience of the customer. The customer is given a positive feeling and they feel socially inclined to answer back with something positive, too.
A Piece of Research
An experiment published in 2002 by David B. Strohmetz, Bruce Rind, Reed Fisher, and Michael Lynn, discovered that customers tipped more if their servers would bring them some chocolate with their bill. A second study in the same experiment also noted the variance in the amount of tip given when the method of bringing the candy or the amount of the candy was changed.
Here is an excerpt from their abstract:
Study 1 found that customers who received a small piece of chocolate along with the check tipped more than did customers who received no candy. Study 2 found that tips varied with the amount of the candy given to the customers as well as with the manner in which it was offered. It is argued that reciprocity is a stronger explanation for these findings than either impression management or the good mood effect.
Types of Freebies
Product Samples
The most common type of freebie is the product sample – especially if you have a tangible offer. They’re usually employed to give prospects a “taste” of what you have in store with them.
They’re great for primary marketing touchpoints even if prospects don’t buy immediately because you’ll usually be their first choice should they wish to use a similar product in the future.
Free Trials
Free trials are like product samples, but they propel a prospect right into your funnel since they will already be using your service. There’s the added benefit of them avoiding the hassle of switching to something new.
Freebies & Giveaways
Random freebies and giveaways enhance the experience of your customer.
If they are still a prospect, it helps them build a positive relationship with your organization since they want to give back.
After Sales
Like in the study conducted in 2002, the better the aftersales freebie is, the more likely it is for a customer to reciprocate by e.g. buying in your upsell, etc.
How Should You Give Things Our For Free?
Factor in the Costings
You’re still running a business, so you need keep in mind the costs.
If you’re giving out a service, you need to compute the cost of time and effort involved.
The cost of the freebie, whether it be to encourage prospects to try out the product or to persuade them to buy into the upsell, has should already be factored into your costs.
For example, most restaurants that give out free breadsticks have already built in the maximum cost of the bread into the average meal sales they make per diner. For others, the freebie can be part of the overhead so they don’t have to worry about costs varying per customer.
Growth hackers like yourself should consider factoring your freebie cost into your marketing budget; it’s the easiest way to categorize your expenses properly and makes sense since you’re using freebies to bring in new customers.
However, consider moving it as part of your costs of goods sold once if you decide you want all your customers to get something for free every time they purchase something from your end.
Make It Part of the Experience
Since you’re building on an intentional relationship with your prospect, the freebie should be integrated into the experience.
Look at how Chinese-themed restaurants give out fortune cookies at the end of the meal or how bread is served before any course at a good restaurant. People going there know that it’s part of the experience; it’s baked into their minds that it’s part of the service you provide.
By doing this, you can enhance the emotional aspect of the purchase decision and make them feel great about transacting with you.
Remember the study that we talked about earlier in this guide?
That’s the feeling you’re aiming for.
You Need Feedback
Once you give stuff away, you need to make sure that your customers/prospects are reacting well.
That’s where feedback comes in.
You need to know what people think about the things you’re doing for them, so that you know if the freebie gave them an experience that they wouldn’t get from anywhere else.
Takeaways on Reciprocity
I like to believe that humans are not inherently selfish.
When you give, people are also expected to give back to you.
That’s the way all of us are built.
Similarly, you should seriously consider investing in your prospects and customers because they are responsible for your growth.
Many business owners dislike giving things out for free because it hurts their bottom line. I don’t blame you if you belong to this group, but you need to view reciprocity and freebies as an investment in your growth.
So there you have it.
The more you give to people, the more likely it is that they will return the favor
