Promotional items work not just because of brand recognition: the reciprocity principle enhances the effect.
If you’re at a wedding, and someone buys you a drink, do you feel obligated to buy one for him or her in return? Most of us do. Similarly, if you reach the drive-thru window to learn that the person ahead of you paid for your order, you are more likely to “pay it forward” and cover the order behind you. Both of these scenarios exemplify the reciprocity principle: when someone does something for you, social norms suggest that you return the favor.
This principle is something that has worked in marketing for years. Specifically, businesses will give something away for free or at a discounted price in an effort to draw new customers or clients. Not every marketer considers the power of reciprocity in this strategy. Consequently, when there is no obligation to reciprocate, businesses lose out on a valuable opportunity.
Take Groupon for example. Business owners leverage this and similar models to get people in the door. The hope is that people are so happy with the service or product that they will either become a repeat customer or recommend the company to others. Consumers don’t necessarily feel any obligation to the business that offers the discount, though. Many people only spend money on certain services and products if they can get the discount. This happens a lot with massage therapy. There are so many discounts on massages that no matter how amazing the service is, many Groupon users will never schedule a massage at full price.
On the flip side, you’ve probably seen this at restaurants: if you put your business card in a fishbowl, you can win a free lunch for 4 or more people. If you win, you and your guests are treated to lunch in exchange for information about services (like financial planning or insurance.) Not only are the people at the table politely willing to listen, more often than not, they will at least give their contact information to discuss business later.
One of the major differences in these two examples is that with lunch, the reward was free. When it comes to handing out free promotional gifts, companies always bank on subconscious impressions to yield a return. However, the power of reciprocity is also at play here. In the end, when a promotional gift converts people into customers, it is thanks to the power of both brand recognition and reciprocation.
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