Online and Offline Referral Reward Programs

Referral reward programs (RRPs) have become widely used because recommendations from friends and relatives are generally perceived as impartial and trustworthy. Past research examined RRP responses in real world (i.e., offline) settings, however, many companies use RRPs online. This study examines how responses to RRPs differ between these two environments. We find that recommendation behavior is driven by the givers’ perception (i.e., their metaperception) of how they will be viewed by the receivers. However, metaperception has a lower impact on referral likelihood online than offline, and incentives have a less negative impact on metaperception in online environments.