Referral reward programs for specialists: the role of reward and brand strength on referral likelihood

Cristiane Pizzutti; Guilherme Possebon de Oliveira

doi:10.5585/remark.v21i5.19684

Authors

Cristiane Pizzutti Universidade Federal do Rio Grande do Sul - UFRGS http://orcid.org/0000-0003-4188-5418
Guilherme Possebon de Oliveira Universidade Federal do Rio Grande do Sul - UFRGS http://orcid.org/0000-0002-8318-8760

DOI:

https://doi.org/10.5585/remark.v21i5.19684

Keywords:

Referral program, Word-of-mouth, Reward, Brand strength, Specialists

Abstract

Objective: This research examines the role of reward (type and size) and the brand strength on the referral likelihood of specialists (i.e., professionals hired by consumers to design a project and/or recommend products and services) who are target of referral reward programs (RRPs). The role of metaperception as underlying mechanism and their effects on referral likelihood is explored.

Method: The authors conducted three experiments with specialists who work with custom made furniture firms.

Findings: For a strong brand, neither the type nor the size of a referral reward is relevant, as the level of referral likelihood is naturally high. When the brand is recognised as weak, non-monetary reward (vs monetary) minimises the social costs of its referral and leads to higher referral likelihood by the specialists (Study 1). In addition, the size of a non-monetary reward does not impact the referral likelihood (Study 2). The metaperception explains the effect of the reward type on the referral likelihood (Study 3).

Theoretical Contributions: This research contributes to the literature on referral reward programs by addressing two still neglected aspects of them: type of reward and brand strength. The focus on the context of specialists is also a contribution, as previous research has only addressed clients as recommenders.

Relevance and Originality: This paper is the first one to broading the referral reward programs scope from a focus on customers and companies to the examination of a more complex relationship among specialists, customers and companies, being one of the first to explore different levels of non-monetary incentives offered by these programs.

Managerial Contributions: The results of this research help marketing managers to understand how specialists (i.e. architects and designers of interiors) react to referral reward programs, indicating that the most effective programs should include non-monetary rewards, because monetary rewards increase social costs of the referral for specialists. Furthermore, when the brand is considered strong by the specialists, no reward is necessary for referral intentions.

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Author Biographies

Cristiane Pizzutti, Universidade Federal do Rio Grande do Sul - UFRGS

Phd in Administration

Guilherme Possebon de Oliveira, Universidade Federal do Rio Grande do Sul - UFRGS

Master degree in Administration

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