Motor Industry KPI and best practice provided by Jeff Smith

One of the first laws in Social Science is the law of reciprocity. Learn how to use this automated reflex to your own advantage and influence people with integrity.

  You Scratch My Back and I’ll Scratch Yours.

If you want to improve relationships then you should tap into the power of reciprocity. All civilisations thrive on this principle and in some cases it’s a means of survival. In modern day life we tend to overlook this principle as a tool of ethical persuasion so here’s a few tips on how to recognise it when it happens and how to use to your own advantage.

People refer to The Law of Reciprocity in many forms. “I’ll scratch your back if you scratch mine”, “You reap what you sow” and “You get what you give.”

The basis premise is that others will reciprocate in kind based upon the way you treat them; you buy someone a pint and they feel obliged to buy one back for you. If you keep on buying the beer and the other person does not offer to buy any what would happen to that relationship? Celebrations such as Thanksgiving and Harvest Festival are all based upon reciprocity; the world gives you what you give to the world.

Dr. Stephen Covey, author of The 7 Habits of Highly Effective People, uses the phrase “emotional bank account” to describe the principle of reciprocity and the corresponding credit-withdrawal process in relationships. Using the metaphor of a financial bank account, the emotional bank account describes the trust that accumulates in a relationship. Like the financial bank account, you must make deposits before you can make withdrawals and that’s an overriding factor here…you must give before you receive.

Important factors for consideration of reciprocity:

1. People who give “expect repayment”, that’s how our brain is programmed because Reciprocity is an implicit assumption in most of our relationships. When someone does something for you, they implicitly expect that when the circumstance is right, you will do something of approximately equal value for them. For example, if your neighbour helps you put up a fence in your garden, your neighbour will “expect” you to help them when they are in equal need. If you cover for someone at work, you expect that they will cover for you when you need their help.

2. Reciprocity must be mutually rewarding. Success is dependent upon the satisfaction of all parties in the exchange. Even when one party is the main provider, they still often have the expectation that they will recompensed - if not from the other party then from the world at another time. You will have heard the term “what goes around comes around”.

3. Gestures do not automatically accumulate. The value of a gesture can increase or decrease and people may forget or fail to recognise small gestures. And of course the converse is true; people will instantly recognise really big gestures and remember them for longer periods. The value of a gesture is not decided by you, but rather by the recipient and as a result, their act of reciprocity will be based on their value and not yours. A number of gestures on your part may be reciprocated by a single gesture by the other party.

4. Reciprocity is a very powerful business tool. The expectation of giving and returning favours creates an obligation to stick to agreements. This is a very powerful and psychologically binding expectation. Although they may never discuss the expectation openly, it is always there and affects negotiations and relationships for long periods of time.

5. Beware! Reciprocity can be both positive and negative. If you harm others, they may seek revenge or retribution. People are driven to make things even in a relationship. They want to do good for those who have treated them well. They want to do harm to those who have harmed them.

OK, now that we have the basic principles outlined, here’s how you use reciprocity to good effect in the workplace.

Firstly, here’s what not to do:

You do a favour like helping someone at work to create an important proposal and they reply by saying “Thank you, I really appreciate your help on that proposal.”

The typical response is, “Think nothing of it, it was my pleasure.” In this moment you have completely bungled the law of reciprocity and put nothing in your emotional bank account. In the mind of the other person, you have said “have this for free and you owe me nothing”. The bad news here is that if you want help from this person in the future, your gesture of help on the proposal will not be recognised, even though you might expect the gesture to be repaid. 

So what is the answer, how do you use this to your advantage?

Well again, what you don’t do after they say “Thank you, I really appreciate your help on that proposal” is to reply by saying, “well yeah buddy, now you owe me one!”  A comment like that would immediately wipe out any credit you think you might have deposited.

Here’s what to do…

“Thank you, I really appreciate your help on that proposal”

“It’s my pleasure and I’m glad that could help you” [now for the killer blow] “I’m sure that if the situation were ever reversed, you would do exactly the same for me, wouldn’t you?”

BAM! The psychological gesture has been firmly deposited in the emotional bank account and your work colleague will feel compelled to return the gesture at sometime in the future. In fact, they will go out of their way to help you because they will feel the burden of reciprocity.

Reciprocity is always at play in the workplace whether you are aware of it or not. For instance, you ask a Technician to work overtime and they do it as a favour to you. In their mind this favour will be banked and they may “expect” you to let them leave early at some point in the future as a return favour. If you fail to recognise the overtime as the Technician’s gesture (even though they received payment) and you fail to repay that gesture, you will have a problem with any further compliance. If you apply reciprocity, you will not have any problems.

What about people taking advantage?

Let’s say that you often allow a person to leave early and now you need them to work overtime and they refuse.

What’s happened here is that you have bungled your power of reciprocity, this person has expected to be let go home early, it’s nothing special; here’s what to do now. When this person asks to go home early the next time or asks for any other favour, you must ensure that you deposit the favour in their emotional bank account. Here’s how you do it:

“Is it OK if I leave early this evening?”

“Well, I’ve let you leave early a number of times already and I want you to realise that it’s not normal business practice to do this. [here we go now] As a special gesture I can let you leave early tonight, but I want you to understand that I may need this favour returning at sometime by working later when the company needs your help, is that OK?”

BAM! The gesture is now recognised for what it is by the person leaving early and the favour must be repaid at sometime in the future.

How to use reciprocity with customer discounting.

So you’re selling a car, a truck, a bike, a service or absolutely anything and the customer asks you for a discount off your price. Do you give a discount and be thankful that you have sold your product? Well, if this is true for you, you’ve just bungled away your power of reciprocity. Remember how it works…I give you something and you give me something back in return.

How to use this to your advantage:

Customer says, “OK, how much discount will you give me?”

“Well Mr. Customer, I’ll be happy to provide you with a discount, but what can you give me in return?” BAM! The customer will frown and start thinking… Don’t leave a silence here; all you are doing is making them aware that the social law of reciprocity applies in this situation.

“Mr. Customer, our business relies on word of mouth and we grow our business by referral. If I give you a discount, will you provide me with some referrals in return?”

BAM! The customer will say “Yes, of course, now how much discount can I have?”

Now, by using this technique do you think that you will be more likely to get a referral system working more effectively?

Now expand your mind, I’ve given you an example of exchanging a discount for a referral, what else could you exchange a discount for in your business?

Reciprocity and customer satisfaction

Over the years I’ve conducted quite a few mystery shopping exercises and I’ve been appalled by the lack of knowledge and compliance between Sales and Aftersales. Here’s just one example:

I walked into a showroom and asked a Sales person where the Parts department is located and the response was… “Over there” he mumbled. The sales person remained seated at his desk and pointed with his forefinger. Reciprocity still works here because now I wanted to get even; I wanted to give him an equal gesture!

Now consider the effects of positive reciprocity.

Imagine that you are that Salesperson, and you say, “What is it that you are looking for?”

Customer: “I need the price of a clutch for my car”

You say, “OK, come with me, I’ll take you over to the Aftersales Department” (ask for the name here and give your name)

You introduce the customer, now know as Mr. Smith, to the Service Manager and say, “Mr. Smith, this is David, our Service Manger. David, Mr. Smith has just come to us to get the price of a new clutch for his car, I’m sure you can help him, can’t you?”

Service Manger say “Yes of course, Mr Smith” Now the customer feels obliged to enter into discussion with the Service Manager about a fitted price for the clutch. (Another story for another day!)

Before you leave, Mr Smith turns to you and says, “Thank you, that’s very helpful.”

Now don’t just walk away… top up your emotional bank account by applying the law of reciprocity.

“It’s my pleasure Mr. Smith. Now when you’re thinking about changing your car, you will come and see me personally, won’t you?”

What response do you think you would get?

Also, is Mr. Smith like to be happy with the way he’s been treated by the dealership?

What would happen to your CSI score if Mr. Smith were given a questionnaire?

The law of reciprocity is constantly at play whether you are aware of it or not, hopefully you are now more aware than you were 10 minutes ago. Look around you, see it in action and make sure that you don’t bungle you efforts by not using its awesome power.

 If you can think of an example or you have a real life example of how you use reciprocity, please make a comment in the box below.

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This entry was posted on Monday, June 9th, 2008 at 10:52 am and is filed under Personal Development.