When we were young and dependent on our parents for money, my friends and I would “go Dutch” every time we went out to eat. Years later, one of my friends got his first job. With his first pay cheque, he picked up the entire bill at one of our outings. He didn’t know it at the time, but he started something in our group. As each of us made our way into the workforce, got a raise or changed jobs, we would take our friends out for a celebration.
This illustrates the concept of fairness and reciprocity. It was fair to cover our own expenses. But we reciprocated when we were shown generosity. The idea that we respond to each other in kind influences all sorts of decisions that we make on a daily basis. How much we tip our servers, what we buy for our best friend’s wedding, holding the door for the person behind us or leaving a complaint on a company’s Facebook page.
Fairness and reciprocity aren’t necessarily a dialog between the same two parties. For us to react appropriately, however, the action and its effort must be visible to us. Dan Ariely relays a story about a locksmith. As an apprentice, the locksmith took a long time to pick locks and often broke them in the process. But his customers happily paid him and even tipped him for his troubles. As he got better, he picked the locks faster and left the locks unbroken. He expected his customers to be even happier; however, the opposite happened – his patrons became less appreciative and stopped tipping. In effect, they rewarded effort but punished expertise. More often than not, we’re unsure of what a product or service is worth so we fall back on metrics that we can observe such as perceived effort or time and materials.
So what does this mean for your business?
- What am I getting out of it?
When you ask your customers for information, such as their email address, make it clear what you’re offering in return. For example, instruct your customer service representatives to ask “What’s your email address so that we can send you a coupon for 25% off your next purchase?.” Similarly if you’re trying to convince users to sign up for your newsletter, show them previous newsletters.
- Give away free content.
Consider offering value upfront, and let your customers reciprocate. This is how a lot of online communities work. Take, Stackexchange, a self-governing platform for questions and answers. Developers go there to get help from other developers. When their questions are answered, they are more likely to answer someone else’s question.
- It’s your turn.
Your customers have already given you their time and attention. In return, they expect you to solve their problems. Find out what their pain points are and reward them for their efforts. And if your customers have already given you money, make sure you deliver on your end of the transaction. If they feel wronged, they may respond in a way that mirrors their negative experience.
- Be transparent!
It’s hard for people to value something abstract such as a service. In business environments where a lot of the value happens behind the scenes, show your process and give visibility to the hard work that goes into it. Here at Intelliware, we often give our clients a tour of the office, and we help them understand and embrace our Agile process. We show them how we prioritize index cards and post them in our project rooms to determine how we build incremental functionality. Because software development is such an abstract endeavor, these practices allow us to cut long feedback cycles and work in productive rhythm (reciprocity).
Finally, I’d like to leave you with an inspiring story from rhoner, a user from the online community, Reddit. He recalled a time he was stuck on the road due to a blown out rear tire. Many cars passed by in the four hours that he was by the side of the road. Finally, a man stopped with his family of six. He knew very little English, but went above and beyond to help. When rhoner tried to offer him money for his trouble, he refused. Struggling with the words, he parted with: “Today you… tomorrow me.”