Referral Engineering in Service Markets: Initial Evidence and Consumer Motivations

摘要

Despite their effectiveness as a marketing tool, studies have noted unintended consequences of Customer Referral Programs (CRP). In particular, potential customers may opportunistically take advantage of a CRP by engineering an artificial referral situation to obtain the reward. A new customer may learn that the company offers a reward for referrals and search for a friend who already is a customer to ask him or her for the referral. The potential customer purchases from the service provider, essentially "faking" a referral situation, which invokes payment of a reward. We call this process "referral engineering." In the case of engineered referrals, CRPs may not build on existing customer satisfaction and do not stimulate authentic word-of-mouth. According to anecdotal evidence we received from the cellular services industry, opportunistic use of CRPs can account for more than 50% of all referrals, leading us to raise the following research questions: (1) How prevalent are engineered referrals in services industries? (2) In general, what factors motivate customers to engage in engineered referrals? (3) In particular, how do the size of the reward and the reputation of the service firm affect the likelihood that customers engineer referrals?