The impact of monetary and in-kind rewards on customer referral programs’ success

: examining the moderating role of product type on the relationship between reward type and recipients’ recommendation receptivity, purchase intention and brand valuations

Abstract

Customer Referral Programs (CRPs) are a popular tool used by firms to attract new customers with high lifetime value and low churn rate. The present dissertation provides managers with valuable insights into how to develop the optimal CRP for their firm. More specifically, it investigates how the type of reward offered (monetary vs in-kind) influences recipients’ recommendation receptivity (attitudes towards the program and motive attribution), purchase intention and brand valuations (brand affect, brand trust and brand loyalty), as well as the possible moderating role of product type (utilitarian vs hedonic). Findings suggest that in-kind rewards lead to more positive recommendation receptivity, higher purchase intention and brand valuations, compared to monetary rewards. Moreover, product type is a moderator of the relationship between reward type and all dependent variables, except for motive attribution. That is, the positive impact of offering an in-kind reward (vs monetary) on recipients’ attitudes towards the program, purchase intention and brand valuations is stronger when the product promoted is hedonic (vs utilitarian). This paper reveals that, in order to choose the most appropriate reward, managers must consider the type of product promoted through the CRP. Furthermore, results indicate that a well-designed referral program has the power to enhance prospective customers’ brand perceptions.

Date of Award	29 Jun 2021
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Maria Alves Machado de Sousa de Macedo (Supervisor)