5 Reasons Retailers Should Embrace Reciprocity Marketing

Give to Get. The Golden Rule. The Law of Reciprocity. However you call it, the age-old rule of give and take still remains true, both in life and in business. The idea is simple: when someone gives us something, we feel obliged to repay that debt. In a famous study from 2005 that analyzed the persuasive power of a post-it note, Randy Garner, a professor of behavioral science at Sam Houston State University, described how feeling obliged to reciprocate a favor “can occur despite the fact that we may never have requested the favor in the first place.” From a retail perspective, the “Give to Get” strategy is one of the most effective ways to gain new customers and keep current ones coming back for more.

Here are five reasons retailers should embrace reciprocity marketing:

 It Drives Foot Traffic

The battle of bricks vs. clicks is, by far, the biggest challenge facing retailers today. While online shopping is rapidly growing (+27% between 2011 and 2012 according to the U.S. Census Bureau statistics), brick-and-mortar retail establishments rose by just 0.1% in the same period. Getting the customer to simply walk into the store is a top priority so why not implement a reciprocity marketing strategy that drives foot traffic by offering needed services or freebies? The Dunkin’ Donuts “Eagles Win, You Win” campaign is a great example of the Give-to-Get principle in action. In 2013, Dunkin’ began to offer its Philadelphia area customers a free coffee – redeemable exclusively via its mobile app – the day after the Eagles win a football game. Dunkin’ claims that over 250K customers redeem the free Eagles coffee offer every week after a win! Thousands of customers had a real incentive to download the Dunkin’ app, opt-in to continue to receive promotional messages from Dunkin’ via push notifications, and likely went on to purchase a donut or bagel to accompany that free coffee thanks to their reciprocity instinct!

At ChargeItSpot, we offered smartphone-dependent consumers free phone charging as a way to increase foot traffic to brick-and-mortar stores. Our free mobile app alerts users when they’re running out of juice and points them to the nearest location that features one of our free charging kiosks.

 It Increases Loyalty

Reciprocity should be a fair exchange: a retailer may want your phone number or email address to gather actionable data that can generate incremental income, while a consumer may want to receive exclusive offers or access to in-store private events.

That is why so many stores offer free loyalty memberships: from the Bloomingdale’s Loyallist card that offers points for purchases and free shipping via its site, to the Neiman Marcus InCircle card that adds complimentary gift packaging and concierge services, the perks of free memberships can be very enticing for customers.

A loyalty program provides the perfect opportunity for retailers to develop a deeper understanding of their customers, gaining valuable insights into their shopping habits. That insight allows you to engage with your customer, winning their trust and loyalty.

It Boosts Sales

It’s no secret that free samples boost sales. A recent article in The Atlantic analyzing the psychology of sampling programs noted that samples can boost sales by as much as 2,000%! Samples not only incentivize people to keep buying or to try new products they’ll love, it also makes them feel valued and triggers the reciprocity instinct. Word-of-mouth marketing is also a tremendous driver of sales. An article in the Journal of Marketing also showed that people who receive free samples talk about it 20% more, while coupons didn’t seem to make a difference.

Traditional tried-and-true sampling programs aren’t the only way to boost sales. Innovative retail technologies can also have a positive impact on your bottom line. Our phone charging stations, for example, generated a 54% increase in conversion and a 29% increase in basket size. Adidas installed 3D interactive virtual footwear walls so customers can access the entire Adidas offering. Stores typically stock only around 200 pairs of shoes, whereas the virtual footwear wall gives shoppers access to over 4,000 models as well as intelligent search tools (that gather customer data) to help them narrow the selection of products that are right for them. The results? A whopping 40% increase in sales!

 It Makes Your Customers Happy

Emotional engagement with your customer is the “holy grail” of marketing yet not enough retailers are giving their customers the time and personalized attention they need in order to become loyal shoppers. One of the reasons e-commerce is thriving is because of pioneers like Tony Hsieh of Zappos who are committed to WOW-ing their customers. The Zappos customer service tales are the stuff of legend: they’ve sent flowers to customers who mentioned losing loved ones, helped out with driving directions and even looked up the numbers to nearby pizza places so their customers wouldn’t go hungry.

The recent surge of “surprise and delight” campaigns is definitely a move in the right direction. One of the most viral examples of the “surprise and delight” strategy came from a rather traditional, old-fashioned brand: Morton’s Steakhouse. In 2011, a traveler jokingly tweeted Morton’s, requesting for a steak to be waiting for him when his plane landed. So Morton’s went ahead and sent a tuxedoed staff member to the airport to wait for the traveler with a big, juicy Porterhouse – free of charge!

A positive, memorable experience is a win-win for everybody: it makes customers happy, drives word-of-mouth, and keeps them coming back to your store.

 It Provides Valuable Data

Every major retailer has now integrated a data collection program into its store. However, some retailers haven’t thought through their data collection strategy. It’s important that retailers earn the privilege of receiving their customer’s data. They should provide true value – relevant offers, a personalized shopping experience, or even free wi-fi – in exchange for that phone number or email address.

One of the more fun ways we gathered actionable data for a client is by integrating a sweepstakes into our kiosks. One of our retail partners, PREIT malls, was hosting a holiday gift sweepstakes contest and so we promoted the contest on the exterior of our kiosk and integrated it into the user interface by customizing the security images to reflect holiday gifts customers could enter to win. Customers got a free phone charge and could also enter to win amazing holiday gifts, while PREIT used that data to educate themselves on what their customers really wanted for the holidays.

Marketers have almost universally adopted the “surprise and delight” strategy, rewarding customers with unexpected freebies or discounts. It’s now time to align your sampling and campaigns and complimentary services with your business goals by harnessing the all-mighty reciprocity instinct.

Doug Baldasare is the founder & CEO of ChargeItSpot

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