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Turning dissatisfied into satisfied customers: How referral reward programs affect the referrer׳s attitude and loyalty toward the recommended service provider

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  • Kuester, Madlen
  • Benkenstein, Martin

Abstract

Referral reward programs are becoming a popular tool for acquiring new customers and bonding existing ones. Yet their benefits are contentious, since such campaigns are prone to the opportunistic behaviour of customers who merely want to reap the reward. This paper examines how participating in a referral campaign affects opportunistic recommenders. By conducting two experimental studies, this article shows that giving counterattitudinal referrals enhances the communicator׳s attitude and loyalty toward the recommended provider. However, the positive effect depends on the reward size. While referral reward programs with small incentives strengthen the recommender׳s attitude and loyalty, no impact was found for referrals with large rewards. The results show that a stronger focus on reward programs is worth considering, since service providers can benefit from opportunistic customers with regards to the bonding effect.

Suggested Citation

  • Kuester, Madlen & Benkenstein, Martin, 2014. "Turning dissatisfied into satisfied customers: How referral reward programs affect the referrer׳s attitude and loyalty toward the recommended service provider," Journal of Retailing and Consumer Services, Elsevier, vol. 21(6), pages 897-904.
    • Handle: RePEc:eee:joreco:v:21:y:2014:i:6:p:897-904
    DOI: 10.1016/j.jretconser.2014.07.005
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    References listed on IDEAS

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    Cited by:

    1. Dan Zhou & Zhong Yao, 2015. "Optimal Referral Reward Considering Customer’s Budget Constraint," Future Internet, MDPI, vol. 7(4), pages 1-14, December.
    2. Kuang, Di & Ma, Baolong & Wang, Hong, 2022. "The relative impact of advertising and referral reward programs on the post-consumption evaluations in the context of service failure," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    3. Berman, Barry, 2016. "Referral marketing: Harnessing the power of your customers," Business Horizons, Elsevier, vol. 59(1), pages 19-28.
    4. Baek, Tae Hyun & Yoon, Sukki, 2020. "Looking forward, looking back: The impact of goal progress and time urgency on consumer responses to mobile reward apps," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    5. Zhan, Mengmeng & Huang, Minxue & Li, Aoqi & Yang, Yvmeng, 2023. "The role of impulsive behaviour and meta-perception in referral reward programs," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    6. Itani, Omar S. & El Haddad, Rania & Kalra, Ashish, 2020. "Exploring the role of extrovert-introvert customers’ personality prototype as a driver of customer engagement: Does relationship duration matter?," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).

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