| Summary: | 碩士 === 國立臺灣科技大學 === 企業管理系 === 102 === Referral reward programs have been widely used as a means to encourage existing customers to make recommendations to others. Ryu and Feick (2007) examined how marketers can use incentives to stimulate word of mouth. We extend their study by examining how the different reward sizes, reward types, and tie strength influence customer referrals from the perspective of recommenders. In addition, we examine the moderating effect of tie strength between the company and the recommender.
We chose medical cosmetology industry as the experimental subjects. In order to test our research framework, we use a 2 (reward size: large vs. small) ×2 (reward type: money vs. gift) ×2 (tie strength: strong vs. weak) between-subjects design. We find that, in the strong tie condition, customers are more likely to recommend. There is no difference in the effect of reward sizes with strong ties. In contrast, with weak ties, an increase in reward size increases the referral likelihood. Furthermore, there is little difference in reward types with weak ties, while the referral likelihood is higher when the reward is money rather than gift with strong ties.
Based on our findings, companies could target regular customers (strong ties) when designing referral reward programs. Besides, offering larger rewards to weak ties will be more effective for increasing customer referrals.
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