Beyond Expectations – Leveraging the Power of the Gift in Marketing and Sales


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I recently read a fantastic article by Mark Bonchek of Orbit on HBR. Mark wrote about “How to Thrive in Social Media’s Gift Economy.” It touches on how brands should utilize social media to further relationships through non-monetary value exchange.

Background on Gift Economy

For over 99% of the history of mankind we’ve lived in small tribes. These tribes consisted of between 10 to 50 individuals. Groups that lived by hunting and gathering. Existing through a concept called by anthropologists as a gift economy. Each member provided for others and status was achieved through the concept of gifting. Cooperation was the route to success as a whole. Status was not a consequence of how much you had, but rather how much you gave away. Giving for the benefit of others with no expectation of immediate return. Trade existed, but only with outside groups. This trading was inherently competitive and thus only done with strangers.

Enter Today’s Market Economy

Today we are firmly entrenched in an exchange based economy. With the adoption of money, almost everything is now traded freely. Trading involves trying to get the best deal, typically at the expense of others. The basis of exchange is inherently antagonistic with the aim of giving less and getting more. The market economy is a zero sum game. You give me A and I give you B. Transactions strive to be equal, leaving no additional place left to go in the relationship.

Yet, there are still examples of gift economy models that exist today. On a larger scale there is Wikipedia, github or Linux. Examples of tribes that contribute (without compensation) to ultimately benefit the whole. On a smaller scale, there are instances of volunteering or helping out family or friends that touch on these concepts. Mark uses a fun example to distinguish between the two:

Consider the example of moving into a new apartment. When friends help you move, you express your appreciation by providing pizza and beer — really good pizza and beer. When you hire professional movers, you pay with money. Offer your friends money instead of pizza and beer, and they are likely to be offended. Offer to pay the movers in pizza and beer, and they won’t unload the truck. Your friends are operating in a gift economy; the movers in a market economy.”

A Hybrid Approach

zappos-free-shippingThrough my work on the Goldfish Principal (differentiation through added value) I believe you can leverage gift economy principles on top of the market transaction. Adding the unexpected extra to the exchange. Little things that help your brand stand out and further the relationship with the customer. Take Zappos for example, it is common practice for Zappos to upgrade shipping to overnight. Purple Goldfish #493 tells the story of a woman ordering shoes for her son at 10:00 p.m. and then receiving them at 9:00 a.m. the next morning. Imagine what it feels like to unexpectedly receive your shoes within 11 hours.

Here is an infographic showing the proposed middle ground between a gift and market economy:

goldfish hybrid economy

Giving More than Expected

As a business why would you want to incorporate gift economy principals into your market exchanges? I believe there are 3 distinct reasons and corresponding benefits of giving more to exceed expectations:

  1. beacon-300x191Positioning – stand out from your competition. If everyone is providing x, the fact that you provide x + y (gift) differentiates your offering. Less than 30% of consumers buy on price. You want to tap into the 70+% who are looking for value and a strong customer experience. Benefit: Differentiation
  2. Loyalty – giving the little extra (gift) enhances the customer experience. It creates a bond between the business and the customer. The benefit of that bond include increased loyalty and ultimately patronage as a form of repayment. Benefit: Retention
  3. Reciprocity – Part of giving extra is to create goodwill (inequality). That inequality is repaid by positive word of mouth or word of mouse. The best form of marketing is via positive word of mouth. By giving a signature extra (gift) you provide something for your customers to talk, tweet, blog, Yelp or Facebook about. Benefit: Referrals

The gift or little extra is about the respect for the relationship. It becomes a beacon, a sign that shows you care. It’s a physical sign of goodwill and customer appreciation.

Investment, not an Expense

Why do the little extras (gifts)? Tony Hsieh, CEO of Zappos, sees the little extras as an investment in their brand.

tony hsieh investment quote

What say YOU?

Two questions:

1. What is your opinion? Can you have a hybrid model (market plus gift)? Or should you focus on leveraging gift economy purely with social initiatives (read Mark’s post for some great examples from Nike, Vail and Kraft). Or is this all just a lot of hooey?

2. Any good examples of brands that are utilizing the hybrid (goldfish) or social media gifting approach?

Today’s Lagniappe (a little something extra thrown in for good measure) – Here is a slideshare that provides further background on the Goldfish Principal. In includes the theory, the ingredients and the 12 different types of goldfish:

Republished with author's permission from original post.

Stan Phelps
Stan Phelps is the Chief Measurement Officer at 9 INCH marketing. 9 INCH helps organizations develop custom solutions around both customer and employee experience. Stan believes the 'longest and hardest nine inches' in marketing is the distance between the brain and the heart of your customer. He is the author of Purple Goldfish, Green Goldfish and Golden Goldfish.


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