Customer Referral Reward–Brand–Fit: A Schema Congruity Perspective

Abstract

Customer referral programs (CRPs) are widely applied as an effective means to stimulate word‐of‐mouth. While previous research mainly focuses on CRPs’ impact of acquiring new customers, this study introduces referral programs as a strategic brand management tool. In doing so, this article emphasizes what has been largely neglected by scholars: A “recommenders‐perspective.” Guided by two competing theoretical perspectives, this article proposes that the perceived congruity between a reward and the recommended brand is an essential driver of referral program performance outcomes. The results show that rewards that conform to the image of the recommended brand yield more favorable reward attractiveness perceptions. Furthermore, the authors show that reward attractiveness perceptions inevitably affect the brand customers are asked to recommend in exchange for receiving this reward. The research reported here extends the literature on judgmental evaluations resulting from schema‐based processing and provides novel insights into the design of CRPs.

I Will Get a Reward, Too: When Disclosing the Referrer Reward Increases Referring

“…In general, the referring rate increases when the company offers referral rewards, whether the reward recipient is the referrer, referee, or both (Gershon, Cryder, and John 2020; Hinz et al 2011; Ryu and Feick 2007; Wirtz and Chew 2002), and greater rewards lead to a higher referring rate (Biyalogorsky, Gerstner, and Libai 2001; Kornish and Li 2010; Wirtz and Chew 2002). The type of reward also matters: rewards are more effective if they are congruent with the brand (e.g., for a telecommunication company, mobile data would be more effective than a music streaming service) (Stumpf and Baum 2016), and in-kind rewards (e.g., gifts, free products) sometimes work better than monetary rewards (e.g., cash, coupons) (Jin and Huang 2014).…”

How to Effectively Design Referral Rewards to Increase the Referral Likelihood for Green Products

“…First, according to congruence theory [47] and cognitive dissonance theory [48], customers tend to pursue cognitive and emotional consistency. This means that when customers are faced with an RRP for green products, they will pay attention to the cognitive consistency between the association stimulated by the green product and the association of the reward [14]. Specifically, the higher customers' perceived fit between the green product and the reward, the more cognitive consistency of the stimulated associations and the more positive emotional experience the consumers may perceive, which makes it more possible for them to respond positively to the RRP.…”

“…If people regard an object as a member of a certain category, their emotions and beliefs about other objects in this category will be transferred to the object to a certain extent. Based on the classification theory [13,49] and the definition of consumer's perceived fit [13][14][15], a conclusion can be drawn that when the perceived fit between the green product and the reward is high, customers are more inclined to classify the green product and the reward as the same category in their cognition system. In this case, they are more likely to transfer their existing positive attitude towards the green product to the reward, resulting in an increase in their preference for the reward and a higher referral likelihood.…”

“…Therefore, this study adopts the perceived fit as the mediation variable and suggests that it can effectively explain the internal mechanism of the effect of reward types on customers' referral likelihood for green products. The degree of perceived fit refers to the similarity or matching degree of attributes between objects [13][14][15]. Specific to the context of the RRPs for green product, the perceived fit refers to the similarity or matching degree of the attributes between the referral reward and the green product.…”

A new approach to econometric modeling in digitized consumer behavior

“…The model takes into consideration a significant sample collected from e-shoppers.The results of the model's implementation pointed out the importance of the entertainment gratification (EG), web irritation (WI), emotional state, and web atmospherics (WA) in the process of e-shopping. The impact is significant Stumpf and Baum, 2016. The model proposed by the authors represents a novelty in the field as it combines the objective character of the brand evaluation with the subjective pecuniary issues of incentives and the psychological aspect of the trust gained in a previously evaluated brand.…”