Marketing Lagniappe: Powered by the Gift Economy


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Over the last week I’ve started to peel back the onion on a concept called the gift economy and how it relates to marketing. I have to thank fellow #usguys Kevin von Duuglass-ittu @mediares, Lisa Thorell @lisat2 and Christopher Porter @67tallchris for spearheading the discussion. Kevin gets extra nods for driving the bus and diving deep with a few strong posts to explore the concept.

So – what is a gift economy?

According to Wikipedia:

In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards. Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.

A gift economy is opposite of a market economy. In a market economy there is an exact exchange of values (quid pro quo). It is my theory that there is a hybrid called the lagniappe economy that can sit between the two:

lagniappe gift economy

Can lagniappe live in the middle? Here is a great analysis from a post by Kevin on gift economies:

“This does not mean that the Gift Economy … and the Market Economy of business are incompatible, not in the least. In fact many if not most of our business exchanges are grounded in Gift-based relationships whose “gift” nature we simply are unconscious of and just assume. If you develop a keen eye for the gift-giving environment, and think about all the things that gift-giving in those environments signal, 1. a surplus others want to attach themselves to, 2. a magnanimous respect for the relationship beyond all else, 3. a debt structure that is “positive”

Let’s examine each of the three through the lens of a lagniappe economy:

1. Surplus – the idea of surplus is grounded in giving extra or creating an inequality. Lagniappe comes from the spanish ‘la napa’ or the Quechan ‘yapay’ both meaning ‘something that is added’. Lagniappe is the practice by the business of throwing in little extras at the time of purchase.

2. Respect – 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.

3. Positive – A debt structure that is positive. This speaks to exceeding expectations by giving extra. The idea of an equal exchange (market exchange) is a myth in marketing. You either exceed or fall short of customer expectations. Providing that extra value provides an inequality that is positive. The positive effect leads to a sort of indebtedness or reciprocity on behalf of the customer.

The Benefit of Surplus is Status

As a business why would you want to incorporate gift economy principles into your market exchanges? I believe there are 3 distinct reasons and corresponding benefits of the status gained through marketing lagniappe:

1. Positioning – 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

What do you think? Is it possible leverage the power of gift economies in marketing transactions via marketing lagniappe?

Today’s Lagniappe (a little something extra for good measure) – Here is Chris Anderson, editor of Wired Magazine and author of the ‘Long Tail’ & ‘Free’ talking about the gift economy and the power of free:

Lagniappe defined: A marketing lagniappe, i.e. purple goldfish, is any time a business goes above and beyond to provide a ‘little something extra’. It’s that unexpected surprise that’s thrown in for good measure.

How do you stand out in the sea of sameness? How do you win repeat customers and influence word of mouth? Are you Giving Little Unexpected Extras?

What’s Your GLUE?

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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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