How the Social Exchange Theory Can Get You the Network of Your Dreams (Part 2 of 2)

How to Use This Revolutionary Method to Reach Advanced Networking

The Social Exchange Theory


In the last article of this two-part series, sociologist, Lucio Buffalmano, discussed the fundamental principles of the social exchange.

In every relationship that you enter, you will find that there is always a transactional aspect, however big or small that aspect might be. And, knowing how to effectively navigate the transactional nature of human relationships will be responsible for the majority of your success.

This is true in business, in dating, and in life.

So, some of the fundamental principles of the social exchange that help you navigate your relationships smoothly are to:

1. Focus on what you bring to the table: make this your number one rule for social exchanges.

2. Focus on what they bring to the table: as much as you want to bring value, you also want to avoid value-takers.

3. Ask yourself if the relationship is balanced: seek to have balanced relationships because they are stronger and happier. (Imbalanced relationships often hide an element of emotional manipulation.)

4. Cut out the takers: you have no space for them in your life.

5. Stick with the collaborators: you recognize collaborators because they want to give back. One of Lucio’s Power University alumni says that good collaborators feel bad being in debt, and seek to give back. They might also refuse a favor if they feel it’s “too much.”

6. Maintain the win-win: win-win people and partners are social treasures. Tend to these people and keep these relationships.

These fundamental principles of effective socialization are true no matter what social interaction you’re in.

Today, however, I’d like to shift the focus away from the fundamentals (which is what my previous article’s overview was mainly centered around). I’d like to talk about how these fundamentals are specifically applicable to your approach to social exchanges. This encompasses practical strategies, techniques, and mindsets.

That’s why leading that talk will be none other than sociologist, Lucio Buffalmano, himself.

More than a sociologist, Lucio is also a researcher of human nature and a member of the IAAP (International Association of Applied Psychology) and APA (American Psychological Association).

I’m excited to share his insights and findings here because he believes in combining his research and theory with real-life experience. So, all of the actionable steps you’ll get below are real-world tested and proven.

Once again, it’s only fair to note that Lucio has reserved this information for the students inside of his course, Power University. But, he was willing to keep an open mind and agree to share another preview of his research for free — the same research that he uses to teach the driven high-flyers who graduate from his program.

So, it’s my sincere pleasure to share with you even more fascinating ideas that are essential for winning with networking, along with another free preview of Lucio’s Power University!

Social Exchanges II: Strategies, Techniques, and Mindsets

In this section, we review mindsets and techniques to improve your social efficacy.

1. Switch to a “WIIFT mindset”

This is one of the most important mindset shifts in life.

The easiest way to increase your social efficacy is to approach social exchanges with this mindset:

What can I do or offer others?

Then, present your offer in a way that appeals to their self-interest.

This is the “what’s in it for them” approach to social relationships.

When you adopt this approach, you naturally align interests for win-win and you automatically become more persuasive.
It’s a foundational, basic mindset.
And yet, countless people constantly stumble on it.

PRO Tip: Think in terms of what’s valuable for them, not for you

What you value is not necessarily what others value.

Keep in mind the “opacity” of some forms of value and the asymmetry of information.
Take a book, for example. A great book that changed your life is invaluable to you. But until people read it, to them, it’s just a valueless piece of paper.

PRO Tip II: Save their face. Appeal to selfish interests, but don’t make them feel selfish!

Be careful not to express the WIIFT in a way that frames people as selfish.

People want the WIIFT, but they don’t want to feel selfish and calculative.

If you make people feel bad about themselves, they will blame you for it and they will cut you off.

For example, marketers sometimes reach out to me for link placement. And when they frame it with “how much money I can make,” I recoil in disgust.
It feels like they’re trying to buy me out of my goal and vision for The Power Moves website.

What’s a better way to approach WIIFT, then?

This is where advanced social finesse starts.

In the example of link placement, imagine this approach:

  1. We have great content for you (WIIFM)
  2. We are also happy to link back to you (WIIFM 2)
  3. And, since we know how busy you are, we are happy to “cover your admin work” to make up for your time

With number three they’d still try to buy a link placement, but they’d do so in a way that feels like I’m not selling out.

2. Give some value, but keep some value undelivered, and then ask

If you empty your value jar and have nothing more to give, you lose leverage.

People have already gotten everything from you.

What’s their incentive to give back or treat you well?

Sure, there is the “reciprocity effect.”
And some people are honest and might even appreciate your attitude.

But whenever you’re dealing with someone for the first time, especially if it’s a one-off exchange, and especially if you have no particular reason to trust them, it’s a better strategy not to give all your value at once.

Give something, then ask for something back.

In a text example in Power University, I tell a girl “I’ll let you know ASAP.”
Frankly, even if I had the answer ready for her, I still would have said the same.
It’s because I didn’t trust her to do me a favor fast, so I’d rather “keep some value undelivered” to increase the odds that she will act, and do so quickly—exactly what happened, BTW.

3. Leverage your future value-giving for better deals

Look at an example here:

Can you spot the issues here?

There are several, but related to our first two techniques:

1. Value is 100% delivered: the delivery of his (supposed) value is in the past and all finished up. Thus, it carries little leverage and, if anything, it feels like he’s “guilt-tripping” me now.

2. No present or future reference to any more value from him: what do I get back if I give him free access?

Let’s rephrase this for effectiveness:

Hi Lucio,

Big fan (<- delivers value at an emotional level) and customer of yours here—already subscribed twice in the past and loved the content. (<- highlights that he has given, but with a positive spin. Huge difference!)

Your work is so helpful that I also share it with my friends. (<- now this is the current and future value-giving leverage)

Do you think we could do something like, “Subscribe twice, get one free?”
I’m sure other readers would also love some offers like that (<-  frames not just as asking for value, but as giving an advice and, thus, value-giving)

What happens now if I don’t give him free access?

His current and future value-giving might stop. He might not share The Power Moves anymore. I’d lose something.
And that could motivate me to accommodate him.

There is an unstated threat there, but it’s in the positive, so it doesn’t turn the relationship adversarial.

This is very helpful both if:

  1. You haven’t given anything yet, but you can “pre-suade” them with your future value-giving power
  2. You have already given something, but you can remind them that you can give more of the same in the future

This is also a great technique to address the risk of giving first.
By reminding people of your future value-adding leverage, you make it less appealing for them to cheat.
Such as: instead of going for a one-off lose-win, you incentivize them into a win-win.

PRO Tip: Always remind merchants you’re a (good) customer

Such an easy way to increase cooperation!

Every time I’m a good or happy customer, I always make sure to communicate that.

Reminding merchants that you’re a good customer reminds them of the value you have already given and the value that you have in store for them in the future.
Now that makes you a high-value patron!

This is why it’s best to stick with providers you like.
You give them value, your leverage increases, and they are incentivized to treat you well (including in cases where you might have some problems that you need help with).

See here for a real-life application

4. Limit their losses for better persuasion (AKA: the silver-medal technique)

Think about negotiations in terms of value exchanges and incentives.

If you’re a buyer and don’t buy, the seller gets nothing.
So the seller’s incentive is to say anything that will make you buy.

But if you can limit or erase their losses, you incentivize them to be honest.


Imagine you’re interested in buying option A.

If you only ask about option A, their incentive is to say and do anything to sell you option A.

But, if instead, you tell them that you are not sure between options A and B (which is a similarly priced option), then since you’re interested in two products, now they can be honest about A’s shortcomings.

Alternatively, remind them that you will buy from them in the future anyway (leverage future value-giving power).
So now they have an incentive to be honest to keep you as a long-term customer.

You can read more about it here.

5. Protect their freedom & power for higher persuasion (& better relationships)

Remember our previous example of asking for a positive review?

That was annoying because it disempowers the receiver.

Much better is to instead ask more indirectly, in a way that protects people’s freedom.

So, for example, you could say:

You: “If you liked the service (= that’s up to you to decide, so you get the power to decide), I’d be happy to get your review.”

“Fully up to you” removes pressure, so people feel less cajoled or “emotionally cornered.”

For example, I don’t tell other authors that if they write an article on this website, they must link back. I seek value, not backlinks.
But I remind them about that possibility:

On Your Honor Gambit

The above email is a specific type of nudging.

I’m adding lots of value when I let someone write here.
So it’s implied that “it’s nice if they do” and, conversely “it’s not very cool if they don’t.”

But I leave it up to them.
If the receiver has any moral system, then there is enough pressure on him to provide that link.

See here another example of the “on your honor gambit.”

PRO Tip: Call your favors: the “Honest Exchange Talk” technique


Godfather: “Some day—and that day may never come—I’ll call upon you to do a service for me. But until that day, accept this justice as a gift.”

It’s good for business settings or at work.

6. Become a “fair-value social marketer”

This is the ultimate stage:

Make sure people know and appreciate the value you’re giving, but without social scalping (unless it’s called for or necessary).

You need to make sure people correctly appreciate your giving because remember:

Unless you make sure your giving is fairly valued and appreciated, many people will price it at their favorite price: zero.

That is true for your time, kindness, money, effort, and anything else you give.

On the other hand, don’t go overboard and become an annoying social scalper because that would lose you the best people.

Balance is how high-quality givers and matchers (and high-quality people in general) deal with each other.

One of the goals of this course and Power University is to make you a high-power, high-value, “enlightened collaborator.”
And, in social exchanges, enlightened collaborators adopt a strategy called “fair-value marketing.”

Fair-value marketing:

1. Ensures people know and appreciate your contribution: it’s important they know that you are giving.
2. Recognizes and appreciates other people’s contributions: gives proper credit, frames the exchange as a win-win, and encourages them to keep on giving.
3. Keeps the exchange win-win: in case someone tries, you prevent their attempts at either devaluing your contributions (“credit erasing”) or inflating their contributions (“credit inflating”).

In simple terms: you give while also making sure you get your fair share back.

To picture this strategy, imagine a continuum of social exchange archetypes going from most naive and easy to exploit to most likely to exploit others:

The naive collaborator gives and hopes.
Unluckily, it’s open to exploitation.

The other extreme is exploitative: it seeks to give as little as possible while taking as much as possible. They prey mostly on naive laborators.

The good middle ground gives and makes sure you get back.
When you’re here, you proactively sell and market your contributions to make sure they’re fairly valued and appreciated.
And you make sure people don’t seek to undercut your contributions (“credit erasing”) and/or inflate their own contributions (“credit inflating”).

This is assertiveness applied to social exchanges and it’s the strategy of the “enlightened collaborator” (name credit to Stef).

Fair-Value for High-Value People Is “Scarce, Exceptional, & Expensive”


“Fair” doesn’t mean “nice,” or “always willing to give.”

If that’s what you personally prefer, then I say “thank you” for being giving.

However, “fair” for a driven, busy, and high-value person may also mean ruthlessly prioritizing, rarely giving to anyone who cannot help them with their goal, and assertively demanding value back.

Generally speaking, we discourage that approach with close relationships because close relationships are a lot better with genuine giving that is done out of pleasure and care.

However, if you plan to go places in life—and if you’re reading here, you are—then we recommend that you start thinking of your time as always scarce.

Hence, it’s a fair approach to life to always reframe yourself as busy and scarce, to say that you have many different priorities already set, and to frame your help as exceptional—rather than, say, because you didn’t have much else to do.

Outside of friends and close relationships, we advise internalizing that, “You don’t have time for anyone and anything unless you, at your sole discretion and free will, decide to.”

Make Sure People Know You’re Giving More Than The Average

If you’re giving more than what most others do or more than what you usually do, you need to make sure that the receiver knows it.

Let’s take the example of a higher-than-average salary.

You’d say:

You: “Look, most salaries for this position are in the range of x-y. We thought about going with the average. But I decided to make you start at the top end of that range.”

Now he knows you did him a favor, and that gratitude is in order.
And, chances are, he’ll be happier, and you’ll get more out of it.

The Giver’s Way to Success: Self-Interested Givers

Adam Grant presents many surprising studies around givers and takers.

Guess who the most successful and unsuccessful were?
The biggest losers were givers. And the most successful ones were givers, too.

What gives?

In the research, there were two very different types of givers.
The losers are what we call “naive givers.” While the successful givers live at the juncture of BOTH a giving spirit (happy to give more than they receive) AND a selfish drive to want to succeed and advance.
In chart terms:

These successful givers spot and avoid losing too big against the takers and only give to matchers or, better yet, to other givers.

So if you’re a giver, you must become a bit more like a matcher or, at least, be more strategic as to whom you give and avoid losing against the assholes.

Example 1: I Made Sure He Knew How Much Value I Was Giving

Some time ago, I linked from my website to an acquaintance’s website.

Links are important for ranking well in Google, but my friend didn’t know much about SEO.


What does that mean to me?

Try to think about it before you read further.

It means that if I link to him with his current level of knowledge, he under-values my contribution.
I lose out because I don’t get my social credit and he loses out as well since he doesn’t appreciate my contribution—and we both lose on relationship quality.

That’s where clever fair-value marketing steps in.

I quickly gave him an overview of how links impact SEO which properly valued my link.
After I linked to him, I showed it to him via text and gave him 3 reasons why I added good value to his business.

Here is what that second part looks like:

Please note the “deservingly so” part.

What does it do?

1.  It shows I’m an honest person and I say what I think is true. I’m not complimenting him just as “part of the deal.”

2. It shows I’m not a “social credit scalper,” such as someone who tries to inflate his contribution and/or deflate other people’s contributions.

3. It solidifies the win-win between two high-value givers who can add plenty of value to each other.

As a rule of thumb:

  • Do promote opaque value more than a highly visible one: when people have no idea about your value offering, then it’s up to you to showcase its value.
  • Do promote more with takers: some people take for granted all they get (the entitled, narcissists, ungrateful, etc.). These people need stronger reminders, and you must keep an eye on whether the relationship can ever truly be a win-win with them.
    Also, consider going with the “honest exchange talk” technique with these people: it works better, and they even respect it more.
  • Do promote more with people who don’t realize your value: as per the example above.
  • Avoid over-promotion of highly visible value: highly visible value is obvious to everyone, so it’s also easy to overdo the promotion.
    Example: you don’t need to promote how helpful it was of you to save someone’s life. That is obvious.
  • Avoid over-promotion with people who are thankful/grateful: They are already showing that they know how helpful you are. Reminding them further is a social scalper move (ie.: dick-head behavior).
  • Avoid over-promotion in long-term relationships: because it often feels manipulative.

This is just a preview, we have a lesson on effective self-promotion in Power University.

Example 2: Surface His Debt To Improve Your Own Mood

A great example from the forum.

Bel was providing an extra follow-up service to his client.

But his client didn’t know it was extra.
So, every time his client reached out, Bel was growing increasingly annoyed—it’s normal and expected to grow more annoyed when we know we’re in a sucker’s trade and the other person doesn’t appreciate it.

Then we drafted an email making it clear that Bel was doing him a favor. And even added “dinner on you” to make his client’s debt clear.
Once Bel “fairly marketed it,” everything changed, including, importantly, Bel’s own feelings towards that person.


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