Hello, and welcome to episode 40 of coffee with Cush. We are starting a series now, which is like psychological principles in marketing. I love psychology. In when I was young I used to read, I studied psychology at a level and didn't carry on in university. But I continue to like read around all sorts of elements of cyber I loved like psychological principles in real applications. I loved books like Freakonomics and influence and the power of persuasion, Robert Kal Daly, that was such a great book. And so I continue to read. And I still do, actually, I find those books really interesting how like human behavior is so malleable, it's so predictable, actually. And whether you're conscious of it, or not, in marketing, psychological principles are used all the time. In this episode, we're going to just focus on one. And we're going to just keep doing this until I kind of run out of psychological principles to talk about to be honest. So I'm not even sure how many is going to be in this series. But we're just going to keep going, probably once a week until, until I've run out of principles to talk about until I've just run out of things to talk about. So I'm gonna start with reciprocity, and the concept of reciprocity. So as a psychological principle, reciprocity is essentially the feeling that you must do something for someone if they've done something for you. And there are so many examples in real life. So in our cultures, for example, there's this concept that if a neighbor brings you a plate of food, which happens regularly, right, so you know, they'll cook something, they'll they'll put a plate together, and they'll give you that plate as your neighbor. And the concept is that you can't return a plate of food empty, and it translates directly like that, you can't return a plate of food empty. So that's like, an example, I think you'll you'll have lots yourselves as well, of examples of reciprocity. And it stems from our history, right, as human beings, I mean, until we had money, and even for a long time, after we had sort of currency, in forms of gold and silver coins and things, the barter system worked, and the exchange system worked. So there was, you know, it's a very much part of our DNA, if something is given, then the receiver expects, or it has an expectation that he must give something in return. And so this principle, has been in our history since forever. And and of course, marketers use it on a on a daily basis. And you may not even be aware of how marketers are using the principles of reciprocity, but we're gonna go through them and you'll be able to spot them pretty easily after, after this podcast.
There are a lot of advantages to reciprocity, right? So it builds relationships, you know, I think that whenever there is an exchange, there is an Arabic saying, which, which is essentially directly translates to we have shared salt, okay? What it really means is that, if you've sat at a dinner table with somebody, the act of sitting at their dinner table, and eating with them, is a milestone in the progression of that relationship, a very significant milestone, it will be very difficult for you to do something against that person after you have shed salt, or I think, break bread is another. Another example of that, you know, it's very difficult to sort of cross those social boundaries after you've eaten with someone. And so, you know, the act of reciprocity builds personal relationships builds interpersonal relationships. And often it triggers emotions, too, right? So this is a great episode of The Office, the American version of the office where Dwight comes in and brings everybody bagels in the office, and he goes around. It's a really like contrived and obvious thing that he's doing. He goes around and he says, Hey, guys, I went all the way to New York. And I got everyone fresh baked bagels, and he hands them out. And as one takes the bagel, he says, You owe me. And then he keeps going around and says, Hey, go enjoy your bagel. Just don't forget you owe me. And then when he gets to Andy, and the takes it and why it says, Don't forget you owe me now Andy is, you know, bit neurotic is like, Well, I hate being in debt to anyone. So what does Andy do? He takes his briefcase and he shines his briefcase, and they says, Look, thank you for the Bible. Here's what I did. And then this sort of continues for a while where they keep doing one upmanship on reciprocity, and that's like a really, it's kind of a humorous way of demonstrating the principle that kind of exists within all of it.
This, there is definitely an element that within within all of us, it will be difficult to just accept gifts from people. And there's lots of science behind this as well. It's not just like, theory, there's a lot of science behind it. But there are a lot of long term benefits that arise from reciprocity, again, like building closer relationships is really valuable. And again, I'm deliberately not talking about marketing yet, because to a large extent, marketing has manipulated that the concept of reciprocity for its own benefit. And, and I'm as guilty of that, as anyone else, I'm just making you aware of what it is that marketers do to utilize this psychological effect. But in the real world reciprocity, helps in building relationships and helps in building trust between people trust between communities. And so if you if you get to tribes, even like in Sudan, tribes in Africa, will often exchange gifts as a representation of peace, but also a representation of mutual respect. And that, again, it like builds those relationships over time. So there are lots of examples of reciprocity in marketing, you've got loyalty programs, free trials,
you've got free ebooks, webinars, free webinars, free learning all sorts of stuff, we're gonna get into that in a bit. But I want to go into a bit of the science of reciprocity, because there's so much data around how effective reciprocity is, I think one of one thing that everyone will be aware of is like,
small things that waiters do in restaurants, particularly in the States, by the way, but in restaurants around the world as well. So those this monster, you were,
a waiter would come. And the control group was that he would just hand the table the check. And then that was the baseline tip, they were waiting to do a measuring tips to the waiter. So that was the baseline and the tip, then in the second group, he would come with a mint on the tip, and you saw a 3% increase in tips when the waiter brought a single mint. In the third group, the waiter came, brought a single mint, and then came back a few minutes later with one extra mint, and put it on the table. And then and that sort of 13%, one 3% increase in tips. And then in the final group, the waiter came with that check and a single mint, he put it on the table, he went away, he came back and he vocalized, I brought you more mints because I see there's more of you on the table. So he personalized the gift if you like and that saw the highest increase in
tips, there was a 20% increase in tips. So this is like a really simple live exam example of reciprocity. And you'll notice it you'll notice small things as well when our waiter does a smiley face on your check the science behind that, you know, that has proven to increase ticks, when he brings extra entrees or extra sides or when something you know, something may already come with additional say, Hey, I brought this to extra. This is all part of the use of the psychological principle of reciprocity in order to get more tips. At the end. There's a really famous experiment called the Reagan experiment, which is in the 70 I think was like 1970 or 1971, where
they had participants in an art installation. And there was a researcher and the researcher would strike up a conversation with an individual. This is before the times of like ethics and psychology and they can basically get away with anything without telling people that they were fat participants. So he will strike up a conversation. And then he would go away and bring the participant a coke to drink it by himself or coke and then bring the
brought you this unprompted gift. And then later he would ask the participant to buy him a raffle ticket. And those who had received a coke bought significantly more raffle tickets for the researcher than those who did not receive a coke. So again, a really sort of simple demonstration of reciprocity, one that everyone will have come across as when you're walking down a street.
The Harry Krishna is this a lot, but you see it in lots of places now, where they will give you a free gift, they'll give you some flowers or they'll give you a book. And the idea is that by taking that free gift, even though you're aware of it with an unsolicited gift, you are more likely to increase your contributions and in fact, that's exactly what happens.
that, you know, contributions increased significantly. Another example is, you know, corporate gifting. And when I
[email protected], before we were bought by Sabre holdings, we we didn't really have a policy around corporate gifts, I used to negotiate contracts, right. So, you know, I would fly into a country and
a supplier would put me up in a five star hotel and, and that was professional. So it made no difference. It was like it was almost expected. This is kind of what you would expect you're a buyer and so you're negotiating contracts. And then there would give gifts. And informally we had this idea that if the if there was a big gift, he would like distribute it around the team and things that was nothing formal about it. And then when Sabre holdings, Travelocity bought last minute Volcom, they implemented a $20 gifting policy. So if it was under $20, you could just keep it if it was over $20, you declare the gift, and then it would go into a pot, and at Christmas, it will be distributed to everybody. The point is that corporate gifting works, right. So there is definitely an element of reciprocity. Now I fought very hard against it for ethical reasons, I fought very hard against it. But I know that it works in like my own personal experience in my lead generation experience, that corporate gifting me really does work. So that's a good example of reciprocity as well.
Finally, there's a famous experiment by brand that I'm not going to mention, which is the free ebook experiment. So they sent out a split test email, right. So the first email was their standard email, and the second email was offering a free ebook, right, and then a 50% increase in open rates and engagement as a result of the free ebook offer. So there is definitely like an element of reciprocity that happens just automatically. And this, there's like sociological reasons why it happens, there was a benefit to humanity, there still is a benefit to humanity. And you see it in everyday life. Now, how has it been manipulated, in terms of being used for, for marketing. So there are lots of ways loyalty programs, in referral programs, free trials and samples, corporate gifting, and swag, and most commonly now is in content marketing. So let's go through each of these sort of one by one. And we'll start with content marketing. So this overarching concept, which I think almost all brands are engaged in now, which is just give value, right? So you give value and you just keep giving value. And then customers come and that is at its base, basal level.
Reciprocity in action. If I keep giving value to you, and you keep getting value from me, then at some point, that value exceeds the fact that it creates a cognitive dissonance in your mind and you feel the need to reciprocate in some way or other. Sometimes that's becoming a customer. But other times, it's just about
sharing content or leaving a positive review or recommending to a friend or whatever it is, but there has to be some element of reciprocation in order for the cognitive dissonance to disappear to dissipate. So really good examples of this like HubSpot. HubSpot do this fabulously well, because behind what appears to be uncertain, what appears to be unsolicited value that they're delivering to you, is actually an incredibly complex and impressive system of behavioral targeting. So they will track your on site behavior and your and your, your app tracking all your online behavior. And they'll deliver content to you what feels like uncannily perfect time and your engagement when that content creates a sequence of future content. And so you end up going down this path and getting more and more and more and more and more and more value from HubSpot. Now they play the long game, right? So HubSpot content, a lot of health sites content will be for junior marketers. In that you know, it we'll be talking about, you know, what are the benefits of CRM systems? How can you use CRM systems to your advantage? How can you use what is behavioral targeting all of these things, which are quite base level, sort of concepts for junior marketers, but they're playing the long game, right? Because that reciprocity, feeling that still exists when that junior marketer becomes the VP of marketing, right? So they really do play it out over a period. They also obviously target VPS but I remember from early in HubSpot lifecycle, they were doing this they were really targeting in fact, they were one of the few.
They were one of the few companies to respond to my question around behavioral targeting on Twitter.
that, when wasn't like 2010 or something like that, like really early on, right. And so they directly responded they had already set up by that time mentioned tracking or whatever it wasn't they were, they were responding directly. And so another one that does that really well is act on that email marketing solution, they do that fantastically. They use their own tool. They, they they drink their own Kool Aid, as they say, and that reciprocity Agha have in the past at multiple companies been a customer of HubSpot and of act on. And I continue to be at a number of our clients, you know, a customer of theirs and a recommender of theirs. And in part, it's because of the value they added to me earlier in my career entirely for free, entirely unsolicited. And so, you know, reciprocity really does work in the short term and in the long term. So another example is loyalty programs, right? So let's face it, Starbucks doesn't have the best coffee. I mean, it really doesn't, it ain't great. But yet Starbucks is the market leader by some way. And I'm not saying it's because of loyalty programs, it really isn't. It's overall because of the the concept that they've created in the third place. But But loyalty programs have an element have a part to play here, right? Whenever you go to a Starbucks, I don't have that, right. So. But whenever you go, that's how you pay my card or my app. They always I mean, I can go to the same Starbucks 1000 times and still say, why don't you just get the app. And the reason I don't is because porosity, like I don't want to feel entirely wedded Starbucks. And yet, I still go there, because of the Wi Fi. If I want to spend the day working in somewhere else, I'll still go to a Starbucks. So
now people often think that the loyalty program, you know, you use the app, you get a free coffee every 10, or whatever it is, they think that they're using, the way they reconcile that in their mind is that well, I'm going to I'm going to use, I'm going to keep going to Starbucks, because I will get a free coffee, ultimately, they see it from that perspective. But there is another element of play, which is simply reciprocity. They know that they have in the past collected free coffees, and they feel the needs subconsciously, to continue to reciprocate and then get that free coffee in return. And that's how loyalty programs essentially work. They leverage that, in part, and they leverage the concept of reciprocity.
referral programs do a similar thing. So Dropbox is a good example. Because, you know, in Dropbox, if, if I was to refer you to Dropbox, you would get some benefit, extra storage, a discount, whatever it is, but I too, would get a benefit. Right. So given that I've gotten the benefit, and you've gotten the benefit, it appears that the only person to have lost out is Dropbox, but of course they haven't lost out because the cost of acquisition is much, much, much lower through referrals. So in fact, net net, they're probably better off, but that feeling has created a sense of reciprocity. And therefore I can continue to do that and feel good, both for myself and the people that I'm referring and for Dropbox. And then when you go to the mall, or you go to a supermarket, and someone is handing crackers and cheese out, there's free samples that you nibble on as you're going through a mall. Well, the reason they do that it's not just about awareness is because it works. It works by leveraging the concept of reciprocity, they've given you a free slither of cheese, okay, now I'm going to buy that cheese. And frankly, how good the cheese was, is only part of the decision making process. Like if you knew a cheese was a seven out of 10. And you knew another cheese next to it was an eight out of 10 You'd always go for the eight out of 10 Cheese. But if you are given a free sample of the seven out of 10 cheese, now it becomes a debate Well, in your mind, you've gotten something for free from them, surely you should reciprocate. Right. And the whole concept of reciprocity in marketing is about leveraging psychological constructs in an inappropriate setting. And this is why it creates such ethical issues. Because reciprocity in this context, isn't really what it was designed for. Reciprocity of as a psychological concept. We designed as a species through generations we designed it of course, right. It's how it's how it happened. Nobody consciously did it. It just happened that way. But it was there to build relationships with with people with individuals
So,
you know, sometimes I have ethical issues with brands that just use it purely to drive short term sales objectives. Whereas other times brands, including ours, you know, we use it to build long term relationships. So how do we use reciprocity? Well, we firstly, always go back to the science, because if we're going to use any concept, we start at the science, what does the science tell us and the science tells us that, if you're offering some of your value will increase your relationship with that person. Reciprocity doesn't necessarily need to be monetary, it could simply be in terms of referrals or reviews. And if it's personalized, it significantly increases the value. So what do we do as a brand when we're doing sort of lead generation? Well, let's take some lead gen activity that we're doing recently for gyms in Saudi Arabia. So we were going to write a white paper anyway. So we're writing a white paper, Jim's in Saudi Arabia, okay. And in fact, it's sort of leveraged against the vision 2030, and how fitness and wellness is a major part of that, and how gyms are engaging in that process. So given we're going to do that exercise anyway, to add value to our existing customers and to future prospective customers, what we do is we reach out to prospects that we would like to work with, in Saudi Arabia, in the gym industry or in the fitness industry, and we say, we're writing this white paper, we'd love to incorporate you in this white paper entirely free of charge with no obligation, all we need you to do is to confirm whether or not you would like to be in this publication. That's it. That's all we do. And some of them come back and say, Yes, we would like to be. And so it costs us nothing to incorporate that brand into this white paper. And once it's done, we send it to them, we don't ask anything of them in return, we don't directly ask anything. Because
if they feel like they've received value, they'll deliver something in return anyway, and nine times out of 10. By the way, the thing that they return isn't then calling us saying, oh, we'd love to be a customer. Because, you know, it just they either have an agency, they have an internal team or whatever. But what they almost always do do is they forward it to other people in the industry that they know, that they feel would benefit from it. And they benefit from our services. And so subconsciously, in their mind, when they're forwarding it, they're forwarding it to people who could become customers, and saying, you know, just make sure that you refer back to me and say, I got it from that. And by the way, that really works. Yeah, it's not like an explosive new client lead gen technique, because we're not bad agency that want five 500 clients, right. We're an agency that wants to work with a select number of clients and, and sort of work with them to make an impact. But what it does is that it kind of allows the market to select the best clients for us, without us having to go and hard sell to every client. So clients end up coming to us. And then we can have a dialogue on equal terms, which of course creates a much greater, much higher value relationship in the long term. So I think that there are big sort of ethical considerations within reciprocity that most marketers aren't even remotely aware of, certainly most consumers are not remotely aware of and that that's a concern. But hopefully, you've learned a little bit about what reciprocity is in terms of marketing, and you'll spot it in the future. And you won't feel any guilt if you decide not to reciprocate because in the end companies are using this psychological technique to to make you their customers to get to your hard earned dollars. So hope you enjoyed this episode. I will be back with the next of our psychological concepts and how they're applied into marketing next week.
