People are compelled to give back; the Norm of Reciprocity explains why.

by | Jul 14, 2020 | Loyalty Programs, Loyalty Psychology

INSIGHTS

What is the Norm of Reciprocity?

The reciprocity norm refers to an expectation that people will help those who helped them (Gouldner, 1960)[1]. For example, one person buys another lunch, and the other person feels a compulsion to return the favour.

Regan’s (1971)[2] study (where subjects reported liking a person giving them a free Coke more than when no Coke was provided) also studied the effects of reciprocity.

It found that providing a subject with a free Coke made them more willing to comply with a request from the provider to buy a raffle ticket. Subjects reported that it was not because they liked the provider more, but because they felt obligated to return the favour.

Regan’s experiment built on the earlier study of Goranson and Berkowitz (1966)[3], who found evidence that conferred favours generate feelings of obligation and the desire to reciprocate.

They provided a large group of female students with a dull task and informed them the successful completion of the task would win a cash prize for their supervisor. Subjects who received voluntary help from the supervisor were observed to work harder that those who didn’t.

Studying the power of reciprocity, Kunz and Woolcott (1976)[4] examined whether people would send a Christmas card to a complete stranger who sent them one. For Christmas 1974, they sent 578 Christmas cards to strangers, and received an overall response rate of an astonishing 20 per cent.

A follow-up study by Kunz (2000)[5] found the same 20 per cent response rate, however a similar study by Meier (2015)[6] received just a 2 per cent response rate. A second study by Meier indicated two potential reasons for the low response rate; perceived threat/suspicion and high e-mail use (something which was not mainstream during the Kunz study period).

Reciprocity does have its limits. Although a person may feel obligated to return a favour, they do not always carry through with the intent. Brehm and Cole (1966)[7] found that the desire to reciprocate does not always correlate with the actual behaviour.

The Norm of Reciprocity and loyalty programs

There is evidence that reciprocity translates to customer loyalty. Morias et al (2004)[8] studied tourism operators and found that that if customers perceived that a provider was making an investment in them, they in turn made a similar investment in the provider, and those investments led to measurable loyalty.

This suggests that investments of love, status, information and time are more closely associated with loyalty than investments of money (e.g. points and miles earn). They concluded that their findings explain how well-designed loyalty programs may lead to increased psychological attachment to the brand and company.

Ryu and Lee (2013)[9] investigated how upscale restaurant customers viewed restaurant quality, relational benefits and favourable reciprocal behaviours based on how much the customer perceived the restaurant was investing in the relationship, rather than the actual quality of the food.

Hertz Gold Plus Rewards[10] capitalise on the norm of reciprocity by giving their members free vehicle upgrades when better vehicles within their fleet are available. This gesture generates very little incremental cost to Hertz, however having happy customers drive away in a vehicle that’s more valuable, advanced, spacious and stylish than what they originally booked can generate incremental benefits for Hertz thanks to the norm of reciprocity.

The member is likely to feel positively about the relationship and may feel inclined to find ways to give back in the form of purchasing additional add-ons (GPS, full insurance or an extra day), repeat business, social sharing, a positive review or persuading a friend to join, even when there may be cheaper alternatives available.

Therefore, free upgrades can provide a fantastic return on investment for Hertz and lay the foundations for future business, referrals and long-term loyalty.

Summary

I love the concept of reciprocity because every loyalty program operator hopes that the benefits they deliver as part of their program and indeed, as part of their overall strategy, will in some way be reciprocated by the member.

In its purest form, reciprocation usually results in a transaction by the member. However, reciprocation can also manifest itself in other ways, such as the member providing data about themselves, referring other members, providing positive feedback and any other number of actions which are highly valuable to a brand.

So, what brands should really be doing is continuing to invest in that customer relationship because your customers have a lot to give; you just have to give them a reason to do so.

Max Savransky is the Chief Operating Officer of Loyalty & Reward Co, Australia’s leading loyalty consulting agency. Max has 11 years experience within the loyalty industry and specialises in program design, commercial modelling and member lifecycle + engagement strategies. Max works with a wide range of B2B and B2C clients to execute on our proprietary Deep DIVE© design process. Max is also a key contributor to www.rewardco.com.au, a global resource centre for everything loyalty.

Connect with me on LinkedIn!


[1] Gouldner, A. W., 1960, ‘The norm of reciprocity: A preliminary statement’, American Sociological Review, Vol 25, pp161–178.

[2] Regan, R., 1971, ‘Effects of a favor and liking on compliance’, Journal of Experimental Social Science Research, Vol 5, pp627-639

[3] Goranson, R. E., & Berkowitz, L., 1966, ‘Reciprocity and responsibility reactions to prior help’, Journal of Personality and Social Psychology, Vol 3, Iss 2, pp227–232.

[4] Kunz, P. R., & Woolcott, M, 1976, ‘Season’s greetings: From my status to yours’, Social Science Research, Vol 5, Iss 3, pp269–278

[5] Kunz, J, 2000, ‘Social Class Difference in Response to Christmas Cards’, Perceptual and Motor Skills, Vol 90, Iss 2, pp573–576.

[6] Meier, Brian, 2015, ‘Bah Humbug: Unexpected Christmas Cards and the Reciprocity Norm’, The Journal of Social Psychology, p156.

[7] Brehm, J. W., & Cole, A. H, 1966, ‘Effect of a favor which reduces freedom’, Journal of Personality and Social Psychology, Vol 3, Iss 4, pp420–426.

[8] Morais, D. B., Dorsch, M. J., & Backman, S. J, 2004, ‘Can Tourism Providers Buy their Customers’ Loyalty? Examining the Influence of Customer-Provider Investments on Loyalty’, Journal of Travel Research, Vol 42, Iss 3, pp235–243.

[9] Ryu, K., & Lee, J. S, 2017, ‘Examination of Restaurant Quality, Relationship Benefits, and Customer Reciprocity From the Perspective of Relationship Marketing Investments’, Journal of Hospitality & Tourism Research, Vol 41, Iss 1, pp66–92.

[10] Hertz, Hertz Gold Plus Rewards program Benefits, https://www.hertz.com.au/rentacar/misc/index.jsp?targetPage=membership_benefits.jsp, accessed 29 June 2020.

Recent Posts

UBER HATES ME. My life-long quest to join Uber Rewards.

Why does Uber hate me so? Let me count the ways. Actually, there’s only one way; Uber Rewards. At the end of 2018, Uber announced the launch of their points and tiers loyalty program. Starting with nine cities in the US, they extended to the entire country in early...

The beauty behind Mecca Beauty Loop

When conversing with clients, I often get asked the question ‘what’s your favourite loyalty program?’ I’m always joining, engaging with and contributing to hundreds of different loyalty programs, all of which I closely study the framework, the mechanics and the...