Do you usually give gifts to your customers? Why? Because you want them to like you maybe?
Research shows that people buy more from a person they like, so it can be positive to get customers to like you. This is not strange in any way; most people probably feel that it feels good to buy products or services from someone they like.
However, there is another interesting effect of giving customers gifts. An effect that completely removes the effect that customers must like the seller.
In a study, a researcher studied how Hare Krishna monks beg for money. Hare Krishna monks have in most people’s eyes strange hairstyles, clothes, and behavior. When they cheer and jump on the streets, there are probably not many people who feel compelled to donate money to them. However, they have another successful method of begging for money.
The researcher who conducted the study studied Hare Krishna monks standing at Chicago’s O’Hare Airport begging for money. The monks stood and handed out small paper flowers to passing travelers. Many travelers did not want the flower and wanted to give it back. The monk then refused to take it back and explained that the flower was a gift, so he absolutely could not take it back. However, the person was welcome to donate to the Hare Krishna group, the monk explained. Many people gave one or two dollars in donation just to get out of the situation and move on.
Many of the travelers did not want the flower even though they paid a small amount to the monks. Many travelers moved on and throwed the flower in the nearest trash can. The researcher observed that the monks periodically walked around and picked up paper flowers that had been thrown in the trash around the departure hall. These flowers were then reused by the monks and simply distributed to other travelers.
The interesting thing about the Hare Krishna monks at the airport is that they distributed something that had a very small value, and that the travelers did not want, and yet the monks often received a donation to their group. It is also reasonable to assume that most travelers did not sympathize very much with the Hare Krishna community.
The reason for the seemingly strange result is that most people feel that when they have received something from another person or a company, they feel obligated to return something if they are asked. This effect is due to peer pressure where people who do not repay a service or a gift are seen as deviant and bad. Our self-image as social individuals thus mean that we want to repay services and gifts. It is also the case that it does not matter if the person who received the gift requested or was interested in the gift. As long as the person has received the gift, he or she often feels obligated to give something in return for the gift.
Research has shown that when people receive a gift or a small service just before a purchase, it no longer matters if they like the seller or the company. The social norm of mutual exchange, created by the gift, puts the effect of liking someone completely out of play. Something that is even more interesting is that the initial gift or service can be much smaller than what is then requested in exchange. There are several studies that have shown that the effect of an initial gift can generate several hundred percent in value in the final exchange (sale).
The social norm of mutual exchange has proven to work in everything from mailings to potential customers where they receive a gift, to business negotiations where one party gives in from a previous tough stance.
So, do you think like a Hare Krishna monk when giving gifts?