Impact of Customer’s Social Value on Optimizing Referral Reward Programs

Jiang, Fenfen; Mei, Shue; Wang, Zhong

doi:10.1080/10919392.2020.1761750

Cited by 7 publications

(15 citation statements)

References 42 publications

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“…Geng (2020) demonstrates that given the strength of network externalities, firms will offer no RRPs if the value discrepancy is too small. Jiang et al. (2020) find that firms should be prudent in using RRPs when the regular price and the sender's persuasion effectiveness are low.…”

Section: Introductionmentioning

confidence: 92%

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Reward the inductor or inductee? The effect of the inductee's altruism on a shopping guide platform

Zhang

2021

APJML

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PurposeThis study highlights the effect of an inductee's altruism on referral reward programs (RRPs) on an online shopping guide platform to determine the optimal RRP and referral reward allocation under a Cashback and Referral RRP.Design/methodology/approachThe authors consider a Stackelberg game with a platform, seller, inductor and inductee, where the inductee's altruism plays a vital role in determining the optimal RRP in equilibrium.FindingsThe authors show that the conditions under which it is optimal to reward the inductor only or reward both inductor and inductee are equal or unequal depending on the degree of the inductee's altruism. Suppose the platform is unable to dynamically decide the commission fee. In that case, the platform may not always be involved in RRPs and will gradually reduce the rewards for inductees as the altruism increases.Research limitations/implicationsThis study focuses on a free-to-consumers model where sellers pay membership fees. Thus, this study has limitations regarding other pricing schemes such as a model in which consumers pay a fee while sellers do not or a model in which both types of users pay fees.Practical implicationsThis analytical work can help platforms optimize referral reward strategies and referral reward allocation considering the influence of an inductee's altruism.Originality/valueIn a Cashback and Referral RRP on a shopping guide platform, the authors provide applicable conditions for the platform to involve in the RRPs when rewarding an equal bonus for the inductor and inductee first. Further, the authors show the optimal referral reward strategy and referral reward allocation when giving the different bonuses to the inductor and inductee.

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Section: Introductionmentioning

confidence: 92%

“…Therefore, a Stackelberg model is suitable for this research, as shown by prior research on the firm's optimal RRP design (Xiao et al. , 2011; Jiang et al. , 2020).…”

Section: Introductionmentioning

confidence: 99%

Reward the inductor or inductee? The effect of the inductee's altruism on a shopping guide platform

Zhang

2021

APJML

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“…Jiang et al 13 show that when the relationship strength between sharers and recipients is weak, enterprises tend to reward more sharers. On the contrary, enterprises tend to reward recipients on social media.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Sharing Reward Program Based on Face Consciousness in Social Media

Xiao¹,

Ju²,

Bao³

et al. 2022

PRBM

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Purpose In social marketing, sharing reward program (SRP) is a common way to improve the marketing effect. However, few studies have explored the impact of consumers’ self-presentation and face consciousness on enterprise SRP. This study aims to explore the influence of these two factors on the optimal SRP. Methods A Stackelberg game between enterprises, sharers and potential consumers is developed to study the impact of sharers’ face consciousness on enterprise’s SRP. In order to discuss the impact of face consciousness on SRP in detail, we introduced status identity of commodity information, sharer’s self-presentation preference and commodity price as exogenous variables in the research. Results The results have shown that when the face consciousness of sharers is high, enterprises are advised to adopt the strategy of low reward and low requirement. But when the face consciousness is low, it would be better for them adopt the strategy of high reward and high requirement. In addition, with the low face consciousness, the optimal SRP is also affected by the relationship between the price of goods and the number of WeChat friends of sharers. Conclusion The results suggest that when enterprises make incentive policies, considering consumers’ self-presentation preference and face consciousness, the profit level can be effectively improved.

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“…Referral rewards are found to have been an effective promotion mechanism in increasing the size of the credit card market through maintaining the existing customer pool and attracting new customers (Kuester and Benkenstein, 2014; Wirtz et al , 2019b; Jiang et al , 2020). The referral process is a phenomenon that entails a recommender, a receiver and a product/service.…”

Section: Introductionmentioning

confidence: 99%

“…In a referral situation, a recommender is uncertain whether the receiver will be satisfied with the recommended product or service. A receiver is suspicious of a recommender's motive when large financial rewards are available for successful referrals (Verlegh et al , 2013; Sciandra, 2019; Jiang et al , 2020). An interesting and important research question is, are some consumers more prone or susceptible to the influence of social risk than others?…”

Section: Introductionmentioning

confidence: 99%

The moderating role of perceived social risk in bank credit card referral programs

Song

Wang

Lee

et al. 2020

IJBM

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PurposeThe purpose of this paper is to investigate how the effects of referral rewards in referral reward programs (RRPs) are moderated through perceived social risk of a recommender.Design/methodology/approachA total of 717 consumers are accessed through Amazon's Mechanical Turk worker panel. The authors use t-test and analysis of variance to test the proposed hypotheses.FindingsThe findings show that consumers with high perceived social risk balance financial rewards with social risks, while low social risk consumers largely ignore these social risk elements surrounding a referral decision.Originality/valueThe inclusion of perceived social risk provides the opportunity to fully understand how a consumer goes about balancing social risk and referral rewards in making referral decisions. The concept of social risk has not been previously applied to this context.

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Impact of Customer’s Social Value on Optimizing Referral Reward Programs

Cited by 7 publications

References 42 publications

Reward the inductor or inductee? The effect of the inductee's altruism on a shopping guide platform

Reward the inductor or inductee? The effect of the inductee's altruism on a shopping guide platform

Sharing Reward Program Based on Face Consciousness in Social Media

The moderating role of perceived social risk in bank credit card referral programs

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