Customer-to-Customer Communication: Referral of High and Low Involvement Products through Stimulated Word-of-Mouth

Abstract

Referral reward programs (RRPs), considered as a form of stimulated word-of-mouth (WOM), provide incentives to existing customers to bring in new customers. The research here adds to previous knowledge by exploring the usage of referral codes for high and low-involvement products in three stages of the consumer decision journey, on a sample of 218 consumers analyzed by regression analysis. Results show that components of the Theory of Planned Behavior influence the behavioral intention toward participating in an RRP, with perceived behavioral control having the strongest effect, followed by subjective norm and Attitude. Referral codes have a significant effect on respondents’ behavior; high conformity of high-involvement products and low conformity of low-involvement products was found, with referral programs having a weaker effect on high-involvement products. Customers tend to follow all steps of the traditional consumer journey when buying a high-involvement product; in the case of low involvement products, low conformity was even lower when using a referral code. Low-involvement products at the need recognition stage, and high-involvement products at the active research stage, are the least affected by the RRP. Results provide insights for companies to optimize their marketing strategy through stimulated WOM, and with the usage of RRPs.