”The Law of Reciprocity” means: to give and take mutually; to return in kind or even in another kind or degree. You may have heard the Law of Reciprocity expressed as: "I'll scratch your back if you scratch mine." The law of reciprocity, (which applies in EVERY culture on the face of the earth), simply explains that that when someone gives you something you feel an obligation to give back.
Giving and receiving favors is a common exchange and 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. The expectation may never be discussed openly but nonetheless it exists and affects negotiations and relationships.
It's important to remember all parties must benefit from the relationship and invest in the relationship and acts must be mutually rewarding otherwise it creates an imbalance in reciprocity. When someone is the primary giver, they often expect they will receive in kind from the receiver or eventually from someone else in the world at another time.
Stephen Covey, author of “The Seven Habits of Highly Effective People,” describes the principle of reciprocity as a credit - debit process in relationships. Using a comparison to a financial bank account, the emotional bank account describes the trust and loyalty that accumulates in a relationship. Like the financial bank account, you must make deposits to the emotional account before you can make any withdrawals.
Successful mortgage professionals recognize this concept of “reciprocity” as a very powerful form of marketing. This expectation of giving and returning favors between two parties creates an obligation to be loyal to people and to stick to agreements.
“Reciprocity” creates a very compelling psychological binding. Although your mortgage customers, prospects, and service providers never discuss this expectation openly, when done correctly, it is always present, and most definitely can affect your future relationships and business arrangements with them.
There’s no doubt you’re already using “The Law of Reciprocity” in your mortgage business. You’re probably sending mortgage news, checklists, tips, and information periodically to your customers and prospects.
You may have also taken an office employee to lunch or bought flower arrangements for your staff...or, you may given your appraiser a quick FSBO appraisal lead...or, you may have passed a listing lead to your Realtor/Agent from one of your FSBO customers.
You may even provide your mortgage customer/prospect a short list of reliable insurance agents to work with...or, you may provide a terrific manual to FSBOs to entice them to work with you...or, a list of attorneys they might use to review their FSBO sales contract.
The possibilities of creating this aura of “reciprocity” are really endless, and are only limited by your imagination. One loan officer I know who works in an area heavily populated with parking meters goes out of his way to put quarters in “expired” meters. He swears that this practice is productive for him. He leaves a short handwritten note (prepared in advance) with his business card on the windshield. His note simply says: “Your meter was expired and I extended your time. Hope that saved you a parking ticket...Joe.”
Can you understand the possible respect, the goodwill, and the loyalty, that a simple action like this creates? Many people do get this “warm fuzzy” feeling as a result, and then take action to “reciprocate.” They feel both comfortable and obligated to you, and seek out your mortgage knowledge and expertise.
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 treat them. The world gives you what you give to the world.
The Bible reminds us that: "Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously.
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! In life and work, you get what you give.
By offering free services and giveaways to mortgage customers and prospects you are building a very powerful business strategy. Your mortgage information is truly the ultimate free giveaway. To begin with it’s free, economical for you to distribute, and has a high perceived value.
Your customer/prospect recognizes the value you are giving them and compels them to continue the relationship with you and want more of your valuable information. If you use “The Law of Reciprocity” to your advantage, you’ll be taking the first important steps to creating a lifelong and very loyal customer base for your mortgage business.
However, it's important to remember a key distinction Rich Jacobson at SoundBite makes regarding this is principle:
"Reciprocity is never demanded or expected, but is the reward for genuine demonstrations of trust and kindness."
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