This article may contain affiliate links, which means that if you make a purchase with my link I receive a small commission, which will feed 4 hungry budgies 🦜. It’s appreciated.

Understanding people and psychology is a key factor when it comes to running a successful business. Because if you don’t understand how people tick, then it’s going to be really hard to see where your business is in a good place to help them.

One of these principles that has a HUGE influence on the success of your business is the ‘Law of Reciprocity’.

The Law of Reciprocity is a social psychology principle which states that people tend to respond to a positive action with another positive action, and to a negative action with another negative action. It’s the thing that is responsible for us being nice when someone is nice to us and wanting to snap something mean back at someone, when they’re being mean to us.

This principle was first described by sociologist Alvin Gouldner in 1960, but it has been observed in different cultures and contexts. There have been many studies that demonstrate the existence of the Law of Reciprocity, such as the famous "cookie study" conducted by Dennis Regan in 1971. In this study, participants who received a free can of soda from a confederate were more likely to buy raffle tickets from them compared to the control group who did not receive any soda.

So we know now that people are more likely to take an action we would LIKE them to take, IF we did something nice first. And they’re less likely to do so, when we weren’t nice in the first place.

It’s simply the idea of returning favours.

So, here are 7 ideas on how you can use the law of reciprocity in your business - with some real life work examples out of my last 7 years in business, tech and marketing.

If you have a membership offer then you can do this easily by giving people for example 2 weeks free access - and making sure that they get ample support in those 2 weeks!

Or if you are selling a course of sorts, give people the first module of the course for free, so they can check it out and then offer them to upgrade to the full experience.

I often get pushback when I suggest this to clients because they are scared that people will use them and they will never convert. However I have tested this at length with my last client and we have successfully increased course sales by 26% when we made the first module free.

Interestingly for one course it didn’t work. That course also had a refund rate that was double that of any other product, this indicated that there is an issue with the product NOT with the way it was sold, hence why people weren’t converting from the first module to the full course.

Of course, if you’re selling a $9 ebook, then that’s not going to be an option, but if you have premium clients, consider sending them a thank you note, or even a welcome gift when they join your program. It will make people feel appreciated and looked after - and it’s lovely for you to see as well.

We have seen the impact of this when it came to selling a 10k certification program. Instead of just sending advertising emails, we mailed some inspirational postcards and a small gift and also sent a printed document with information about the certification - and the feedback has been consistently positive with almost 40% of the participants of the previous program opting to do the certification.

Those customers that keep coming back to buy from you probably make up 80% of your revenue (if you don’t know why I’m saying that, read this article and you’ll know).

The ways you can increase revenue in your business are limited, and that’s a topic for a separate post. One of them is to increase the amount of money each person spends within your business, so it makes sense to say thank you to your most loyal customers and you can do that through bonuses and discounts or deals. And in turn you will continuously bring them back to buy from you and increase the lifetime value of each customer.

We have used this strategy by strategically sending out coupons to customers when they reached certain levels of spending. You can also combine this with other strategies such as the free trial. Include a free trial of your next more premium program when someone buys the program prior to that. This will help you to keep people on the ball and to help them grow over a long period of time.

Marketing doesn’t end at the sale. If you know the customer lifecycle, then you know that after the sales it’s all about retention and referrals. So, make sure that your customer service is stellar and you will not only reduce refunds but also encourage your customers to buy from you time and time again AND they will send their friends too, because they know that your business is a business that is NOT just after the money but also wants you to have a stellar experience - even after money has already exchanged hands.

Whenever you ask someone for feedback and then you implement the change coming from that people feel seen, heard and respected - again resulting in them holding your brand in high regard. So ask your people what they need more of - and then provide it.

I know everything in the online marketing space over the last 5 years has been about automating and building funnels and what not - but I am firmly in the boat that this trend is going out of fashion. The businesses that make the most amount of money are the ones that take their customers seriously and speak to them as often as possible. Provide phone support, reply to emails with something other than an automated bot and be there for people. Hear their stories and truly understand their challenges and they will remember you.

It’s part of our job if we’re creating content to give knowledge away and to encourage others to make things happen and achieve their goals. If you gatekeep information it just doesn’t look right. So share and share freely, give your time within reason to things that have no inherent benefit to you, because it always come back to you by the bucketload.

So, which of these strategies are you going to apply in your business going forward? How can you help your audience? How can you pay it forward to someone else?