Exchange Theory: The Power of Giving Away

Do you remember when you were a kid and the doctor had a glass jar of sweets on their desk? You were always dead keen to pay a visit, weren’t you? That jar was always full no matter how far you were back in the queue.

That doctor knew a thing or two. It’s the promise of the future that counts, not what happened before.

Brief Introduction to Exchange Theory

Sociologists brought Exchange Theory under the spotlight in the 1920’s and 1930’s.  Briefly, this theory seeks to understand why some social interactions blossom, while others do not.

Relationships sustain when both parties unconsciously do a cost-benefit analysis and decide the benefits exceed the effort they put in. Exchange Theorists hold the theory applies to all types of relationships.

That’s why a customer may not return to a shop if they found the checkout clerk rude. That’s food for thought indeed, but there’s another angle behind this.

Factoring in the Theory of Cognitive Dissonance

Let’s say for example you have a friend you go back with a while. All is good until something snaps and they part with rude remark. That behaviour is dissonant to your overall impression. The Theory of Cognitive Dissonance suggests you may ignore this because they are having a bad day.

Much the same happens if we have an initial bad experience of a business. We block out our friend’s marketing messages, don’t we? If we put these two theories together, we might come up with the following three initial marketing goals for a start-up business.

  • To be consciously mindful of the impressions we create in the market
  • To add value to the customer experience at every opportunity
  • To be patient and bide our time until these two strategies bear fruit

We call this business planning model a ‘lean canvas’ because it helps us focus on what’s really important during the start-up phase. Once up and running we can expand it to a ‘broad canvas’ including the other building blocks of a successful business.

Every successful business helps its customers achieve their needs in a unique way, at least to their own minds. A ‘value proposition canvas is a complementary business planning tool that ensures what we offer continues to be what our market needs.

What Does a Customer Really Want When They Engage?

Customers don’t arrive to buy things. They want solutions to particular needs and are willing to pay for them. Their solution may be something you sell. On the other hand they may just want your advice.

If you consistently create a positive impression and add value to their experiences, then your leads will become your customers and eventually purchase something.

They will make these purchasing decisions because they trust you enough to take your advice. And as you know, we prefer to buy from business we trust. That’s provided the benefits we get continue to exceed the effort we put in, of course.

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