Purpose Empirical research presents conflicting findings with regards to the effectiveness of referral reward programs (RRPs) and supports two alternative and conflicting views on the effectiveness of incentivizing recommendations. They are, first, a positive effect via perceived attractiveness of the incentive, and second, a negative effect via metaperception of the recommendation. The purpose of this paper is to examine these two opposing psychological mechanisms to reconcile the conflicting findings. Design/methodology/approach – The authors conducted three experiments. Study 1 tests the base model. Studies 2 and 3 add moderators to test whether each mediating variable operates exclusively on its intended relationship. Findings – Incentive size enhanced the attractiveness of an incentive, but reduced the metaperception favorability of the recommendation. These two opposing mechanisms operated in parallel, independently and fully mediated the effects of incentive size to likelihood of making a recommendation. Thus, the net impact of incentives on recommendation behavior depended on the relative strengths of these two opposing forces. Practical implications – The study recommends managers to design RRPs with incentives that recommenders perceive as highly useful (i.e. to increase attractiveness) but have a low face value (i.e. to reduce metaperception concerns) and to target RRPs to strong rather than weak ties. Originality/value – Our work offers an integrated theoretical account of consumers' responses to incentivized recommendations and provides managerially relevant guidelines for the design of effective RRPs.

Psychological drivers of referral reward program effectiveness

Orsingher, Chiara;
2018

Abstract

Purpose Empirical research presents conflicting findings with regards to the effectiveness of referral reward programs (RRPs) and supports two alternative and conflicting views on the effectiveness of incentivizing recommendations. They are, first, a positive effect via perceived attractiveness of the incentive, and second, a negative effect via metaperception of the recommendation. The purpose of this paper is to examine these two opposing psychological mechanisms to reconcile the conflicting findings. Design/methodology/approach – The authors conducted three experiments. Study 1 tests the base model. Studies 2 and 3 add moderators to test whether each mediating variable operates exclusively on its intended relationship. Findings – Incentive size enhanced the attractiveness of an incentive, but reduced the metaperception favorability of the recommendation. These two opposing mechanisms operated in parallel, independently and fully mediated the effects of incentive size to likelihood of making a recommendation. Thus, the net impact of incentives on recommendation behavior depended on the relative strengths of these two opposing forces. Practical implications – The study recommends managers to design RRPs with incentives that recommenders perceive as highly useful (i.e. to increase attractiveness) but have a low face value (i.e. to reduce metaperception concerns) and to target RRPs to strong rather than weak ties. Originality/value – Our work offers an integrated theoretical account of consumers' responses to incentivized recommendations and provides managerially relevant guidelines for the design of effective RRPs.
2018
Orsingher, Chiara; Wirtz, Jochen
File in questo prodotto:
Eventuali allegati, non sono esposti

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/669345
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 27
  • ???jsp.display-item.citation.isi??? 24
social impact