Receiver responses to referral reward programs in social networks

Because online circumstances allows communication remotely and out of synchronization, along with a better communication capacity, online referral reward programs in social networks may have different characteristics compared with traditional referral reward programs. This paper studied the effects of reward allocation, tie strength and brand relationships on receivers’ responses in referral reward programs and confirmed the mediating effects of social cost. It investigates the impact of online referral reward programs on receivers’ responses from the perspectives of social norms and market norms. We identify the moderating conditions that are expected to affect when and how a reward leads the receiver to infer social norms, thereby increasing the referral’s effectiveness. In study 1, because receivers with different tie may have relationships based on market norms or social norms (Wentzel et al. in J Serv Res 17(2):119–133, 2014), we examine the effect of tie strength and reward allocation on receivers’ responses in online referral reward programs. Furthermore, we extended the analysis of study 1 in two ways through the introduction of brand relationships and reward characteristics. In study 2, we introduced brand relationships to analyze the effect of tie strength and reward allocation on receivers’ responses. In study 3, we studied the effects of reward type and tie strength on receivers’ responses in online referral reward programs. To capture the underlying process, we also examined the participants’ perceptions of social cost in three studies. Finally, we conclude by discussing the theoretical and managerial implications of the findings. People with strong ties tended to accept a referral more often than those with weak ties, because people with strong ties gave their friends’ benefits more consideration. However, in strong brand relationships, receivers with strong ties in No Reward conditions tend to respond to referrals more than those with strong ties in the Reward Recommender conditions, because rewarding recommenders makes social norms transfer into market norms. This paper extended the theory on effect of reward on receivers’ responses in online referral reward programs and further verified that social cost was a key element of psychological mechanism that caused reward to strengthen receivers’ responses under market norms or social norms. This paper researched how social norms and market norms affected consumers’ behaviors differently, which helped company design online referral reward programs. This paper researched the relationships between market norms and social norms on receivers’ responses in online social network.