Reciprocity and the Success of Hickory Farms

[sue_frantz]

On April 11, 2016 Richard Ransom, the founder of Hickory Farms, died at the age of 96 (Walsh, 2016).

In a masterful use of the norm of reciprocity Hickory Farms stores offered samples before it was popular to do so. Today it’s commonplace; not so in the 1950s and 1960s.

"The women didn’t bother asking customers if they wanted a taste – they just cut off bite-size pieces and held them out to people, Robert Ransom [Richard’s son] recalled. Shoppers felt obligated to take and eat what they were offered, and after tasting meats and cheeses every few steps around the store, they felt obligated to buy something" (Walsh, 2016).

Does giving a free sample actually make a difference in sales? You bet. Friedman & Rahman (2011) compared four conditions delivered in a fast-food restaurant: no greeting/no gift, greeting/no gift, greeting/free yogurt, greeting/free key chain. The greeting of customers didn’t matter. What had the most impact was giving a customer a free gift, and, no, it didn’t matter what that free gift was. Those who received a free gift (yogurt or key chain) spent 46% more on their purchase than those who did not receive a free gift.

If I were just starting a business like Hickory Farms, I’d give out free samples, too!

Friedman, H. H., & Rahman, A. (2011). Gifts-upon-entry and appreciatory comments: Reciprocity effects in retailing. International Journal of Marketing Studies, 3(3). doi:10.5539/ijms.v3n3p161

Walsh, M. W. (2016, April 16). Richard K. Ransom, founder of Hickory Farms, dies at 96. Retrieved from http://www.nytimes.com/2016/04/17/business/richard-k-ransom-founder-of-hickory-farms-dies-at-96.html