The Law of Reciprocity

The Law of Reciprocity means to give and take mutually, to return in kind or even in another kind or degree. The law of reciprocity simply means that when someone gives something you feel an obligation to give back.

Stephen Covey, author of “The Seven 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.

Nonprofit organizations are masters of turning reciprocity into a money-making tool. For my wife and me, we are huge dog lovers.  A few years ago, the Denver Dumb Friends League sent us a page of personalized address labels. I thought to myself, “Wow, what a nice gift we just received”.  Along with the labels, was a letter with a cute puppy in the corner asking for donations with a return envelope conveniently attached.  Over 20% of recipients respond with a contribution to these mailings; even if the labels are never used. 

Next time you send out a mailing or a thank you letter to a customer/client, consider including a simple gift such as a pen, book marker or letter opener.  The result will be better customer relations and drastically increase sales; especially in the form of repeat business and referrals.

Interviewing prospects using the Law of Reciprocity

When interviewing a potential referral source or client, ask questions that will educate about the prospect and their needs.  One question that I ask all potential referral sources is this: “What is the biggest challenge in your business that you are currently facing”?  The goal is not necessarily to fix their problem, but to provide them with support through an article or referring them to someone who can assist them in their area of challenge.   Purposefully look for opportunities to provide information that is helpful to others.

Reciprocity is a basis of trust and a basis for legitimate power.  The principle is that others will reciprocate in kind based upon the way you treated them. The world gives you what you give to the world. 

Reciprocity isn’t always instantaneous, therefore persistence is vital.  Even if you’ve found yourself saying, “I’ve tried that and it doesn’t work”, don’t give up.  At the appropriate time you will reap a harvest.  By understanding and using the power of reciprocity, you can improve your relationships and avoid mistakes that can permanently damage your relationships.  In life and work, you get what you give.

A True Story

I had a builder who insisted on using only me to do the financing for his condominium project.  A top producing Realtor wrote a contract for himself on one of the units and wanted to use his lender instead of working with me. This agent had a 20 year history with his current lender and didn’t want to chance it with me doing the mortgage financing.  The builder insisted that agent use me as the lender and I can tell you, the Realtor® was none too pleased.  I called the Realtor® and introduced myself.  I asked him to call his lender to find out what terms he would offer the agent to do his loan and I would match it, not being concerned about how much profit I was making.  During the loan process I got to know, learned to like and earn the trust of this agent. I also learned what the challenges were that he was facing in his business.

I put him on my distribution list, sent him books that I felt would help him with the challenges in his business without looking for business in return. It took nearly a year and a half when finally, I received a call that he wanted to start working with me. He is now one of my best referral sources.

Final Thought

Does your belief system align with the Law of Reciprocity?  Are you willing to give information, ideas, and refer other professionals without the benefit of receiving?  Reciprocity works well in negotiations and relationships.  Be the first one to concede and come to the middle.  You’ll find that it brings down the other person’s resistance and often miraculously makes them counter with a concession of their own.