The impact of uncertain rewards on customers’ recommendation intention in social networks

Abstract

Purpose The purpose of this paper is to research the effect of uncertain rewards on the recommendation intention in referral reward programs (RRPs) and investigate the interaction of tie strength and reward type on the recommendation intention. Design/methodology/approach The research adopts a quantitative exploratory approach through the use of experiments. Study 1 adopted a 2×2 between-participants design ((reward type: certain reward vs uncertain reward)×(tie strength: strong tie vs weak tie)). Respectively, by manipulating uncertain probabilities and expected value, Studies 2 and 3 further explore the effect of uncertain rewards and tie strength on customers’ referral intention. Findings This paper finds the following: compared to certain rewards, customers’ referral intention under uncertain rewards is higher and positive experience has a mediating effect between reward type and recommendation intention; when only the recommender is rewarded, the tie strength between the recommender and the receiver moderates the effect of reward type on the recommendation intention; for strong ties, customers’ recommendation intention is higher in uncertain reward condition, but for weak ties, customers’ willingness to recommend is almost the same in both reward types; when both the recommender and the receiver are rewarded, although certain rewards have a higher expected value than uncertain and random rewards, for strong ties, the participants have a higher referral intention under random rewards than that under uncertain rewards, which have a higher referral willingness than that under certain rewards. Additionally, for weak ties, the reverse is true. Originality/value The research has both theoretical implications for research on uncertain rewards and tie strength and practical implications for marketing managers designing and implementing RRPs.

The Impact of Perceived Hapkido Service Quality on Exercise Continuation and Recommendation Intentions, with a Focus on Korean Middle and High School Students

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Effects of pride-tagged money and surprise-tagged money on online tipping

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Reward Design for Customer Referral Programs: Reward–Product Congruence Effect and Gender Difference

“…Prior research focused mainly on the effects of reward size and reward scheme on rewarded referral likelihood (e.g., Ryu and Feick, 2007 ; Verlegh et al, 2013 ; Wirtz et al, 2013 , 2019 ; Orsingher and Wirtz, 2018 ). Only a few studies explored reward type (e.g., Jin and Huang, 2014 ; Wang et al, 2018 ; Zhang et al, 2019 ); nevertheless, they emphasize the explicit forms (e.g., monetary vs. in-kind) but overlook the implicit nature (utilitarian or hedonic) of the rewards. Our findings reveal that the effectiveness of utilitarian and hedonic rewards, even with the same explicit form (e.g., both liquid detergent and movie tickets used in Study 2 are in-kind), can be considerably diverse.…”

“… Zhang et al (2019) addressed the analogous topic in the specific context of electronic referral and demonstrated the advantage of cinema ticket vouchers (typically hedonic) over cash. In addition, Wang et al (2018) found that uncertain rewards generate a higher referral intention than certain rewards, because the former is with a more positive experience. However, these studies focus almost exclusively on the type of rewards and neglect other factors that may play an important role in consumers’ evaluation toward utilitarian vs. hedonic rewards.…”