Marketing Seminar (2020-03)

Topic:I Will Get a Reward, Too: Disclosing the Referrer-Reward Increases Referring

Speaker:Yanping Tu, the University of Florida

Time:Thursday, 20 August, 9:00-10:30

Microsoft Teams:https://teams.microsoft.com/l/meetup-join/19%3a1ac5f46cc2e540f5a193cef99579c34b%40thread.tacv2/1596596131661?context=%7b%22Tid%22%3a%2280b7b804-c47e-4119-8274-0f6835b8e89f%22%2c%22Oid%22%3a%22dae73385-f69d-4688-a153-ff18e3659b00%22%7d

Abstract:

Incentivized customer referral programs (e.g.,“$10 for you, $10 for your friends”) are prevalent, yet they have low referring rates. We suggest that one major psychological barrier is that the referring process appears commercial and, thus, inappropriate for communal friends. We propose a method that can remove this barrier and increase referring: disclosing the referrer-reward in the referral message to the referee. We reason that a message that solely emphasizes the referee-reward (“You will get $10!”; i.e., the popular practice) sounds like a sales pitch, making referrers feel that they are playing the role of a salesperson, and working for the company to exploit friends. On the contrary, a message that includes both the referee-reward and the referrer-reward (“You will get $10, and I will get $10 too!”) sounds more like an invitation for cooperation, making referrers feel that they are playing the role of a friend, and working with friends to reap rewards from the company. Importantly, the latter highlights the communal nature of the referring process, and increases referring.

Introduction:

Yanping Tu is an Assistant Professor of Marketing at the University of Florida. She graduated from the University of Chicago with a PhD in Marketing, after obtaining a BS in Psychology and a BA in Economics from Peking University. She studies consumption in the social context, social relationship marketing, judgement and decision making, and consumer welfare.

Your participation is warmly welcomed!