Skip to main content
SpringerLink
Log in

Receiver responses to referral reward programs in social networks

  • Published:
Electronic Commerce Research Aims and scope Submit manuscript

Abstract

Because online circumstances allows communication remotely and out of synchronization, along with a better communication capacity, online referral reward programs in social networks may have different characteristics compared with traditional referral reward programs. This paper studied the effects of reward allocation, tie strength and brand relationships on receivers’ responses in referral reward programs and confirmed the mediating effects of social cost. It investigates the impact of online referral reward programs on receivers’ responses from the perspectives of social norms and market norms. We identify the moderating conditions that are expected to affect when and how a reward leads the receiver to infer social norms, thereby increasing the referral’s effectiveness. In study 1, because receivers with different tie may have relationships based on market norms or social norms (Wentzel et al. in J Serv Res 17(2):119–133, 2014), we examine the effect of tie strength and reward allocation on receivers’ responses in online referral reward programs. Furthermore, we extended the analysis of study 1 in two ways through the introduction of brand relationships and reward characteristics. In study 2, we introduced brand relationships to analyze the effect of tie strength and reward allocation on receivers’ responses. In study 3, we studied the effects of reward type and tie strength on receivers’ responses in online referral reward programs. To capture the underlying process, we also examined the participants’ perceptions of social cost in three studies. Finally, we conclude by discussing the theoretical and managerial implications of the findings. People with strong ties tended to accept a referral more often than those with weak ties, because people with strong ties gave their friends’ benefits more consideration. However, in strong brand relationships, receivers with strong ties in No Reward conditions tend to respond to referrals more than those with strong ties in the Reward Recommender conditions, because rewarding recommenders makes social norms transfer into market norms. This paper extended the theory on effect of reward on receivers’ responses in online referral reward programs and further verified that social cost was a key element of psychological mechanism that caused reward to strengthen receivers’ responses under market norms or social norms. This paper researched how social norms and market norms affected consumers’ behaviors differently, which helped company design online referral reward programs. This paper researched the relationships between market norms and social norms on receivers’ responses in online social network.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others

References

  1. Sundaram, D., Kaushik, M., & Webster, C. (1998). Word of mouth communications: A motivational analysis. Advances in Consumer Research, 25(1), 527–531.

    Google Scholar 

  2. Steffes, E. M., & Burgee, L. E. (2009). Social ties and online word of mouth. Internet Research, 19(1), 42–59.

    Article  Google Scholar 

  3. Wirtz, J., Orsingher, C., Chew, P., & Tambyah, S. K. (2013). The role of metaperception on the effectiveness of referral reward programs. Journal of Service Research, 16(1), 82–98.

    Article  Google Scholar 

  4. Guo, Y., & Barnes, S. (2009). Virtual item purchase behavior in virtual worlds: An exploratory investigation. Electronic Commerce Research, 9(1–2), 77–96.

    Article  Google Scholar 

  5. Jin, L., & Huang, Y. (2014). When giving money does not work: The differential effects of monetary versus in-kind rewards in referral reward programs. International Journal of Research in Marketing, 31(1), 107–116.

    Article  Google Scholar 

  6. Schmitt, P., Skiera, B., & Christophe, V. D. B. (2011). Referral programs and customer value. Journal of Marketing, 75(1), 46–59.

    Article  Google Scholar 

  7. Wentzel, D., Tomczak, T., & Henkel, S. (2014). Can friends also become customers? The impact of employee referral programs on referral likelihood. Journal of Service Research, 17(2), 119–133.

    Article  Google Scholar 

  8. Verlegh, P. W. J., Ryu, G., Tuk, M. A., & Feick, L. (2013). Receiver responses to rewarded referrals: The motive inferences framework. Journal of the Academy of Marketing Science, 41(6), 669–682.

    Article  Google Scholar 

  9. Biyalogorsky, E., Gerstner, E., & Libai, B. (2001). Customer referral management: Optimal reward programs. Marketing Science, 20(1), 82–95.

    Article  Google Scholar 

  10. Ryu, G., & Feick, L. (2007). A penny for your thoughts: Referral reward programs and referral likelihood. Journal of Marketing, 71(1), 84–94.

    Article  Google Scholar 

  11. Olaru, D., Purchase, S., & Peterson, N. (2008). From customer value to repurchase intentions and recommendations. Journal of Business & Industrial Marketing, 23(8), 554–565.

    Article  Google Scholar 

  12. Tuk, M. A., Verlegh, P. W. J., Smidts, A., & Wigboldus, D. H. J. (2009). Interpersonal relationships moderate the effect of faces on person judgments. European Journal of Social Psychology, 39(5), 757–767.

    Article  Google Scholar 

  13. Richins, M. L. (1983). Negative word-of-mouth by dissatisfied consumers: A pilot study. Journal of Marketing, 47(1), 68–78.

    Article  Google Scholar 

  14. Hanson, S. (2000). Networking. Professional Geographer, 52(4), 751–758.

    Google Scholar 

  15. Wang, J. C., & Chang, C. H. (2013). How online social ties and product-related risks influence purchase intentions: A facebook experiment. Electronic Commerce Research and Applications, 12(5), 337–346.

    Article  Google Scholar 

  16. Heyman, J. E., & Dan, A. (2004). Effort for payment. Psychological Science, 15(11), 787–793.

    Article  Google Scholar 

  17. Clark, M. S., & Mils, J. (1993). The difference between communal and exchange relationships: What it is and is not. Personality and Social Psychology Bulletin, 19(6), 684–691.

    Article  Google Scholar 

  18. Murillo, D. E. C., Kang, J., & Yoon, S. (2016). Factors influencing pro-social consumer behavior through non-profit organizations. Internet Research, 26(3), 626–643.

    Article  Google Scholar 

  19. Elster, J. (2003). Coleman on social norms. Revue Française De Sociologie, 44(2), 297–304.

    Google Scholar 

  20. Clark, M. S., & Mills, J. (1979). Interpersonal attraction in exchange and communal relationships. Journal of Personality and Social Psychology, 37(1), 12–24.

    Article  Google Scholar 

  21. Williamson, G. M., & Clark, M. S. (1992). Impact of desired relationship type on affective reactions to choosing and being required to help. Personality and Social Psychology Bulletin, 18(1), 10–18.

    Article  Google Scholar 

  22. Walster, E., Berscheid, E., & Walster, G. W. (1976). New directions in equity research. Journal of Personality and Social Psychology, 25(2), 151–176.

    Article  Google Scholar 

  23. Qiu, L., Rui, H., & Whinston, A. (2013). Social network-embedded prediction markets: The effects of information acquisition and communication on predictions. Decision Support Systems, 55(4), 978–987.

    Article  Google Scholar 

  24. Kim, J., Lee, C., & Elias, T. (2015). Factors affecting information sharing in social networking sites amongst university students. Online Information Review, 39(3), 290–309.

    Article  Google Scholar 

  25. Stets, J. E., & Burke, P. J. (2000). Identity theory and social identity theory. Social Psychology Quarterly, 63(3), 224–237.

    Article  Google Scholar 

  26. Reed Ii, A. (2004). Activating the self-importance of consumer selves: Exploring identity salience effects on judgments. Journal of Consumer Research, 31(2), 286–295.

    Article  Google Scholar 

  27. Forehand, M. R., Deshpandé, R., & Reed Ii, A. (2002). Identity salience and the influence of differential activation of the social self-schema on advertising response. Journal of Applied Psychology, 87(6), 1086–1099.

    Article  Google Scholar 

  28. He, W., Qiao, Q., & Wei, K. K. (2009). Social relationship and its role in knowledge management systems usage. Information & Management, 46(3), 175–180.

    Article  Google Scholar 

  29. Bettencourt, L. A., Brown, S. W., & Mackenzie, S. B. (2005). Customer-oriented boundary-spanning behaviors: Test of a social exchange model of antecedents. Journal of Retailing, 81(2), 141–157.

    Article  Google Scholar 

  30. Morhart, F. M., Herzog, W., & Tomczak, T. (2009). Brand-specific leadership: Turning employees into brand champions. Journal of Marketing, 73(5), 122–142.

    Article  Google Scholar 

  31. Xu, F., Michael, K., & Chen, X. (2013). Factors affecting privacy disclosure on social network sites: An integrated model. Electronic Commerce Research, 13(2), 151–168.

    Article  Google Scholar 

  32. Clark, M. S., Mills, J., & Powell, M. C. (1986). Keeping track of needs in communal and exchange relationships. Journal of Personality and Social Psychology, 51(2), 333.

    Article  Google Scholar 

  33. Gelb, B. D., & Sundaram, S. (2002). Adapting to “word of mouse”. Business Horizons, 45(4), 21–25.

    Article  Google Scholar 

  34. Ahrens, J., Coyle, J. R., & Strahilevitz, M. A. (2013). Electronic word of mouth: The effects of incentives on e-referrals by senders and receivers. European Journal of Marketing, 47(7), 1034–1051.

    Article  Google Scholar 

  35. Kim, S., Lee, J. S., & Pan, S. (2014). The role of relationship marketing investments in customer reciprocity. International Journal of Contemporary Hospitality Management, 26(8), 1200–1224.

    Article  Google Scholar 

  36. Dahl, D. W., Honea, H., & Manchanda, R. V. (2005). Three Rs of interpersonal consumer guilt: Relationship, reciprocity, reparation. Journal of Consumer Psychology, 15(4), 307–315.

    Article  Google Scholar 

  37. Tangney, J. P., Miller, R. S., Flicker, L., & Barlow, D. H. (1996). Are shame, guilt, and embarrassment distinct emotions? Journal of Personality and Social Psychology, 70(6), 1256–1269.

    Article  Google Scholar 

  38. Chiu, H. Y., Chen, C. C., Joung, Y. J., & Chen, S. (2014). A study of blog networks to determine online social network properties from the tie strength perspective. Online Information Review, 38(3), 381–398.

    Article  Google Scholar 

  39. Batson, C. Daniel, Sager, Karen, Garst, Eric, Kang, Misook, Rubchinsky, Kostia, & Dawson, Karen. (1997). Is empathy-induced helping due to self-other merging? Journal of Personality and Social Psychology, 73(3), 495–509.

    Article  Google Scholar 

  40. Blackston, M. (1992). Observations: Building brand equity by managing the brand’s relationships. Journal of Advertising Research, 32(3), 79–83.

    Google Scholar 

  41. Escalas, J. E., & Bettman, J. R. (2003). You are what they eat: The influence of reference groups on consumers’ connections to brands. Journal of Consumer Psychology, 13(3), 339–348.

    Article  Google Scholar 

  42. Bansal, Harvir S., & Voyer, Peter A. (2000). Word-of-mouth processes within a services purchase decision context. Journal of Service Research, 3(2), 166–177.

    Article  Google Scholar 

  43. Ariely, D., Bracha, A., & Meier, S. (2009). Doing good or doing well? Image motivation and monetary incentives in behaving prosocially. American Economic Review, 99(1), 544–555.

    Article  Google Scholar 

  44. Tonin, M., & Vlassopoulos, M. (2013). Experimental evidence of self-image concerns as motivation for giving. Journal of Economic Behavior & Organization, 90(6), 19–27.

    Article  Google Scholar 

  45. Grayson, L. (2007). Using evidence: How research can inform public services: A review. Evidence & Policy A Journal of Research Debate & Practice, 3(3), 439–457.

    Article  Google Scholar 

  46. Vohs, K. D., Mead, N. L., & Goode, M. R. (2006). The psychological consequences of money. Science, 314(5802), 1154–1156.

    Article  Google Scholar 

  47. Bénabou, R., & Tirole, J. (2003). Intrinsic and extrinsic motivation. Review of Economic Studies, 70(244), 489–520.

    Article  Google Scholar 

  48. Bowles, S., & Gintis, H. (1998). The moral economy of communities: Structured populations and the evolution of pro-social norms. Evolution & Human Behavior, 19(1), 3–25.

    Article  Google Scholar 

  49. Frenzen, J. K., & Davis, H. L. (1990). Purchasing behavior in embedded markets. Journal of Consumer Research, 17(1), 1–12.

    Article  Google Scholar 

  50. Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering baron and kenny: Myths and truths about mediation analysis. Journal of Consumer Research, 37(2), 197–206.

    Article  Google Scholar 

  51. Preacher, K. J., Rucker, D. D., & Hayes, A. F. (2007). Addressing moderated mediation hypotheses: Theory, methods, and prescriptions. Multivariate Behavioral Research, 42(1), 185–227.

    Article  Google Scholar 

  52. Fiske, A. P., & Tetlock, P. E. (1997). Taboo trade-offs: Reactions to transactions that transgress the spheres of justice. Political Psychology, 18(2), 255–297.

    Article  Google Scholar 

  53. Trusov, M., Bodapati, A. V., & Bucklin, R. E. (2010). Determining influential users in internet social networks. Journal of Marketing Research, 47(4), 643–658.

    Article  Google Scholar 

  54. Pongjit, C., & Beisezee, R. (2015). The effects of word-of-mouth incentivization on consumer brand attitude. Journal of Product & Brand Management, 24(7), 720–735.

    Article  Google Scholar 

Download references

Acknowledgements

This work was supported by a grant from National Natural Science Foundation of China (No. 71372194), National Natural Science Foundation of China (No. 71371034) and China’s National Scholarship.

Author information

Authors and Affiliations

  1. Beijing University of Posts and Telecommunications, No. 10, Xitucheng Road, Haidian District, Beijing, China

    Qi Wang, Yunxia Mao & Xiaohang Zhang

  2. University of Michigan, 701 Tappan Street, Ann Arbor, MI, USA

    Ji Zhu

Authors
  1. Qi Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yunxia Mao
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Ji Zhu
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Xiaohang Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Qi Wang.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Wang, Q., Mao, Y., Zhu, J. et al. Receiver responses to referral reward programs in social networks. Electron Commer Res 18, 563–585 (2018). https://doi.org/10.1007/s10660-017-9271-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10660-017-9271-x

Keywords

Search

Navigation