Different receiver responses to rewarded referrals: The moderating effect of styles of thinking

Abstract

AbstractReferral reward programs (RRPs) have attracted increasing attention from researchers and practitioners in recent years. Drawing on the analytic–holistic thinking framework, we explore the degree to which styles of thinking affect receiver's responses to the referrals through three studies. We find that rewards in RRPs adversely affect referral responses, resulting in lower purchase intention and brand evaluation. Such an effect of rewards, however, is moderated by styles of thinking. For holistic thinkers, the above effect of rewards on receiver's responses is valid because holistic receivers are more sensitive to contextual factors (e.g., rewards and tie strength). For analytic receivers, however, there is no significant difference in receiver's responses to unrewarded (vs. rewarded) referrals. In addition to styles of thinking, the results also show that tie strength has a moderating effect on the receiver's response to the referrals. However, the moderating effect of tie strength on receiver's responses is also affected by styles of thinking. For holistic receivers, the moderating effect of tie strength is significant. For analytic receivers, however, the moderating effect of tie strength is not significant. Our conclusions complement the existing research on RRP and provide management implications for enterprises to develop more efficient referral reward programs.