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 will review mindsets and techniques along with some practical action steps 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 avoid just asking for stuff, but to instead approach social exchanges with this mindset:


Mindset: What can I do for or offer others?


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

This is the “what’s in it for them” approach to social relationships. When you adopt this mindset you automatically think and talk more persuasively.

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 will always value.

Keep in mind the “opacity” of some forms of value and the asymmetry of information.

For example, a great book that changed your life is invaluable to you. But, until people read it, to them it’s just a value-less piece of paper.


*PRO Tip II: Save their face and appeal to their 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. So, if you make people feel bad about themselves for it, more often than not, they will blame you for it and cut you off.

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

So, what’s a better way to approach the 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 (another WIIFM).

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. Keep some value “undelivered,” then make your ask


If you empty your value jar and have nothing more to give, you lose leverage because people have already gotten everything from you. So, 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 — and especially if it’s a one-off exchange and/or you have no particular reason to trust them — it’s a better strategy not to give away all your value at once.

Give a part of something, then ask for something back.


#3. Leverage your future value-giving power


Look at an example here:


Can you spot the issues here?

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


1. The 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. There is no present or future reference to any more value from him: so, what do I get back if I give him free access?


Let’s rephrase his approach for effectiveness:



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:


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


This is also a great technique to address the risks 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 you’re a good customer reminds them of the value you have already given, plus of 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 need help).

See this real-life application.


#4. Limit their losses (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 ask about option A only, their only incentive is to say and/or do anything to sell you option A.

So, instead, tell them that you are not sure between option A and B.

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 (which leverages your 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 this technique for free here.


#5. Protect their freedom and power


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, I’d be happy to get your review.”


The “if you liked the service” communicates that it’s up to them to decide if they liked the service. And, it sub-communicates that they have the power and freedom to decide for themself if they liked the service or not (and, therefore, whether or not they want to leave a review).

Or, what I also like to do is to mention what they could do, and add that it’s “up to them.”

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:


#5.2 Protect their freedom and power (the “on your honor” gambit)


The above email is a specific type of nudging.

I’m giving lots of value when I let someone write on my website. 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 already enough pressure on them to provide that link.


#6. Call your favors with the “honest exchange talk” technique




Godfather: “Someday — 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.


#7. Become a “fair-value social marketer”


This last step deserves its own subheadings because this is how high-quality people deal with each other.

One of the goals of Power University and of The Power Moves is to make you a high-power, high-value, “enlightened collaborator.”

And, in social exchanges, enlightened collaborators adopt a strategy called “fair value social marketing.”

Fair value social 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 them proper credit, frames the exchange as 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:


The naive collaborator gives and hopes. Unluckily, they’re 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 the naive collaborators.

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.”




A note on “fairness,” keep in mind that where “fair” falls can be relative. You have to make a call on that, also based on your value systems and the situation.

Where it falls depends on your past interactions, the individual you’re dealing with, as well as the environment.




Here is an example of fair-value social marketing.

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

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

So, pop test here, what does that mean for 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 out on relationship quality.

That’s where clever fair-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 three reasons why I added good value to his business.

Here is how that second part looks:


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 highly visible ones: 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 (entitled types, narcissists, ungrateful people, 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 the “honest exchange talk” technique with these people.

– 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 easy to overdo its 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 being thankful and grateful: They are already showing that they know how helpful you are. Reminding them further is a social scalper move (i.e. dick-head behavior).

– Avoid over-promotion in long-term relationships: Be it friendships, intimate relationships, or long-term business partnerships, over-promotion feels manipulative.


This is just a preview for now.




Ali here, and I can’t stress enough how important the information Lucio shared is.

Without understanding the social exchange, you risk coming across as awkward, annoying, or the guy who simply doesn’t “get it.” But, with a good grasp of the social exchange, it’ll be far easier to reach the heights of success and be the type of person others want to be around.

So, to save us some space on an already long article, if you enjoyed it, choose a path:

  • Course. Get 10+ hours of in-depth training.
  • Articles. Explore Lucio’s blog articles, such as this article on how to build deep emotional connections.



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