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Receiver responses to rewarded referrals: the motive inferences framework

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Abstract

Referral reward programs have been shown in past research to stimulate referrals and also to contribute positively to customer lifetime value and firms’ profitability. In this paper we examine whether, how, and under what conditions providing a reward for a referral affects receivers’ responses to the referral. Based on a multiple motives inference framework, we propose that rewards adversely affect responses because they lead receiving consumers to infer ulterior motives for the referral. Using experiments and a survey, we find support for this hypothesis and show that this effect is stronger for unsolicited and weak tie referrals. We also demonstrate that rewarding both the referral provider and receiver or providing symbolic rewards can eliminate the negative effect of rewarded referrals. The paper makes conceptual contributions to the literature on referral reward programs, word-of-mouth, and motive inferences. The work has implications for managers considering ways to construct referral programs and design marketing activities to increase referrals.

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Acknowledgments

The authors would like to thank the four anonymous reviewers, Koen Pauwels, and the marketing faculty at Ozyegin University and Vrije University Amsterdam for their helpful comments. This research was supported by KUBS Faculty Research Grant and IBRE Award, given to the second author (G. R.). Order of authorship was determined by random draw to reflect equal contribution.

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Authors and Affiliations

  1. Department of Communication Science, University of Amsterdam, Kloveniersburgwal 48, Room D.110a, 1012 CX, Amsterdam, The Netherlands

    Peeter W. J. Verlegh

  2. Korea University Business School, Korea University, Anam-Dong, Seongbuk-Gu, Seoul, Korea, 136-701

    Gangseog Ryu

  3. Imperial College Business School, Tanaka Building, Room 278, Imperial College London, South Kensington Campus, London, SW7 2AZ, UK

    Mirjam A. Tuk

  4. INSEAD, Fontainebleau, France

    Mirjam A. Tuk

  5. University Center for International Studies, University of Pittsburgh, 4400 Posvar Hall, Pittsburgh, PA, 15260, USA

    Lawrence Feick

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  1. Peeter W. J. Verlegh
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  2. Gangseog Ryu
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  3. Mirjam A. Tuk
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  4. Lawrence Feick
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Correspondence to Gangseog Ryu.

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Verlegh, P.W.J., Ryu, G., Tuk, M.A. et al. Receiver responses to rewarded referrals: the motive inferences framework. J. of the Acad. Mark. Sci. 41, 669–682 (2013). https://doi.org/10.1007/s11747-013-0327-8

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  • DOI: https://doi.org/10.1007/s11747-013-0327-8

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