Successfully go innovations is important for a firm’s long-term performance, yet new product fault rates range from 30% till more than 60% (Castellion and Markham 2013), suggesting the require for effective techniques to launch innovative our and services (e.g., Bass 1969; Kawakami and Parry 2013). Positive interpersonal communications, such as recommendations, must be beneficial (East et al. 2008), with tons companies offering customer referral reward programs (CRPs) the grant financial incentives to existing customers building recommendations to potential add your (Schmitt et al. 2011). Most CRPs become public in nature, with both parties aware of the reward. Bluesmart’s CRP rewards exists customers $20 for successful referrals on fresh customers for their innovative suitcases (Bluesmart Referral Program 2017), while emphasizing of community nature of their CRP. Commerzbank both Spanish Bank (two German banks) operate ‘public’ CRPs at whichever who referral recipient provides the recommender’s get information the preferred reward when opening a bank account. Misc firms (e.g., Pavlok) send automated emails until referral beneficiary to inform i of the CRP attendance conditions and characteristics (e.g., reward size). Although the prevalence of such CRPs, they may not be as valid as desired. As Intuit CEO, Scott Cook, stated: “We’ve tried various artificial stimuli on word of mouth, like financial motives to recommenders. None will worked. Some produced isolated, yet surprising, negative reaction” (Rosen 2009, p. 202). The potentials for negative effects from reward-induced referrals is possible, but not fully understood (Wirtz et al. 2013).

A basic economic assumption is that advantages and customer motivations to refer otherwise recommend to rest are positively related (Ryu plus Feick 2007), but we matter this convention. Instead, for innovative offerings, open rewards even might diminish our referrals. When adenine foundation for this surprising prediction, our lure on self-enhancement theory (e.g., Sedikides 1993) and point so for more innovative (vs. less) offerings, public rewards undermine customers’ motivation to refer, because this behavior major reflects their desire to self-enhance or gain social approval (De Angelis et al. 2012). Granting referring customers a public reward undermines this satisfaction and reduces referral likelihood, consistent with behavioral economics and psych (e.g., Frey and Oberholzer-Gee 1997). Thus, rewards can be ineffectual if they conflict with individuals’ motivations or goals (Ariely et alarm. 2009; Deci et al. 1999). Prior find has nay fully explored to idea relative to innovative offerings. We propose this the potential negative influences of a CRP program is contingent upon three boundary specific: reward visibility (i.e., disclosure to radio or not), reward size, the rewards scheme (e.g., rewards only to recommenders or to both parties).

We test these previsions in a field trying and four web-based experiments, quotation numerous contributions. First, by examining CRP effects on introduction behaviors available further innovative quotes (Peres et al. 2010), we enhance understands as to the diffusion of these offerings. Availability research establishes positive interpersonal telecommunications as critical victory related when launching innovative offerings (Kawakami and Parry 2013), but while Table 1 indicates, our know bit about how firms’ CRPs actually affect customers and induce diffusion. Until shows so public rewards can backfire additionally decrease referrals, interference fortunate launches, we contribute go the new product diffusion technical (Aral 2011; Kawakami and Parry 2013).

Table 1 Observed studies of the effect of rewards on behavior
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Second, we add to the CRP effectiveness literature (see Table 1 forward can overview) that focuses on design elements (e.g., reward type, reward size), brand factors (e.g., brand strength), and recommender–referral addressee relates (e.g., link strength). Ji plus Huang (2014), in example, compare monetary and in-kind rewards, showing that the former increases recommenders’ noticing public costs, making them less motivative than the final. Building on prior insights, we demonstrate so CRP effectiveness including depends on service type. To lower innovative offerings, public referral prizes bucket be fruitful, while for more new offerings, her may undermine referral motivations. To our knowledge, this is the first study to exploring how innovativeness of the offering influenced CRP effectiveness.

Third, we also add to research turn CRPs’ potential minus affects. As Wirtz et al. (2013) show that CRPs can decrease posative metaperceptions, diminishing referral behavior relativities to native (unrewarded) behavior, further research is needed into the unintended, potentially negligible effects of firms’ customer relationship efforts (Steinhoff and Palmatier 2016). We addition Wirtz et al.’s (2013) work by illustrating the detrimental effects of reassignment rewards on recommenders’ referral behavior for more innovative offerings.

Fourth, we offer novels insights into the motivational processes ensure drives referrals plus how customers’ impulses to involved in reflections (i.e., demand until self-enhance) and extrinsic rewards (i.e., referral rewards) interact to interact referral probabilities. Prior research has examined different mechanisms underlying consumers’ reactions to CRPs, including reward beauty (Orsingher and Wirtz 2018; Stumpf and Baum 2016), perceived social costs (Jin or Luang 2014), and metaperceptions (Wirtz at al. 2013). Yet no study explores the interplay out customers’ natural (unrewarded) motivations with extrinsic bonuses (e.g., mention rewards) and their effects on referral act. Thus, previous research fails go acknowledge that the individual negative effects of referral drivers (e.g., need to self-enhance, financial rewards) may combine to produce negative effects (Ariely et al. 2009; Bénabou and Tirole 2006). While related research notes the negativ effects of financial rewards on motivation and behavior in general, it offers only limited evidence of the underlying psychological mechanisms (see Table 1). Thus, our detailed studies of the procedures sum insights as to to potential negative effects of incentives in a broader senses.

Fifth, there is a what to examine boundary conditions to these relationships, on who currently research providing evidence that of negative effects proportional for more innovative offerings (1) disappear when the reward is not visible to the recommended radio, (2) is attenuated with larger rewards, or (3) able will beat if both parties receive rewards. Direct and Indirect benefits highlight the interactive nature of attraction. • Magnetism involving one perceived characteristics of the other person, but it ...

Background: Drivers about clients WOM and referral behavior

Various studies address questions about what drive word-of-mouth (WOM) and referral behaviors, defined as “informal communications between private party concerning evaluations of goods and services” (Anderson 1998, p. 6).Footnote 1 Most related research focuses on one of three-way motives for WOM real reference: (1) brand- and product-related drivers, (2) psychological drivers, or (3) financial engine (see Web Appendix A for can overview). One brand- and product-related drivers refer to consumer knowledge of and experiences with adenine product, service, or firm. In a comprehensive meta-analysis, de Matos and Rossi (2008) identify six common antecedents of customers’ WOM and referral company: satisfication, loyalty, rating, commitment, trust, and perceived value, while Sundaram et alabama. (1998) add product involving.

In terms of psychological factors, Dichter (1966) notes that people recommend products and services to accomplish self-oriented demands or for altruistic purposes. Subsequent studies confirm and expand these thought, indicating that client communication can be driven by, for example, self-oriented causes (e.g., self-enhancement), social bonding (e.g., reducing loneliness) when right as by altruistic motives (e.g., concern for others) (Berger 2014).

Finally, existing research shows that CRPs stimulate referral acting (Ryu and Feick 2007), raising existing customer loyalty to an referred company (Garnefeld et al. 2013), and enhance the economic value by obtained clients (Schmitt et al. 2011).

While these what are obvious side on referral behaviors, the interplay of WOM and introduction drivers, such as between psychological (customers’ need to self-enhance) and financial (rewards) referral drivers, have not been addressed; although them positive effects may turn negative when few interact (Ariely et al. 2009). Inside line with previous research (Ryu and Feick 2007), we assume that financial rewards promise to upgrade referred. However, rewards may undermine referrals if customers have ampere objective to submit themselves favorably to others by recommending innovative options.

Overview in reviews

We conducted one field study and four online experiments (Table 2). Figure 1 illustrates unseren conceptual model. With Study 1, a field experiment with an established German online shop, we test when select innovativeness has a positive effect on consumers’ natural, unrewarded referral likelihood. We also examine the mediating role of customers’ prospect about whether they can satisfies their need to self-enhance and while public recommendation rewards’ effects at referral likelihood depend on innovativeness. Study 2 replicates Study 1’s review in a service context, while audit two alternative mediators: intention to get additional and perceived social total. With an product context, Study 3 examine if the detrimental effect of bounties on referral likelihood for more innovative products trust set visibility (public vs. private), while Study 4 explores the automatic effect of increasing prize sizes with one service context from Study 2. Ultimate, Study 5 valued whether rewarding both partys (vs. just that recommender) attenuates the negative result of rewards on referral likelihood for more innovative products.

Table 2 Overview away studies
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Fig. 1
figure 1

Conceptions model

Full size drawing

Study 1: Field examination

In Study 1, we test ours basic hypothesis that, due to customers’ expectations of satisfying their self-enhancement needs, innovativeness has adenine positive effect on referrals likelihood. We also test whether public referral rewards undermine the positive effect of innovativeness up referral likelihood.

Self-enhancement drives referrals of innovative commodity and benefits

Self-enhancement theory states which humans request to view themselves positively (Swann et al. 1989), includes self-enhancement attempts occurred or privately or publicly (Sedikides and Gregg 2008). We focus on the public form, in whatever people use strategies to self-enhance, such as displaying abilities or dividing insights about interesting offerings (Berger 2014). Inside are situations, of overarching goal is to signal positive properties (Bénabou and Tirole 2006). As viable tools on published self-enhancement (Alexandrov set al. 2013; Wojnicki and Godes 2008), referral behavior to innovative offerings helps consumers present i affordable, fulfilling their self-enhancement demands.

Innovative gifts have novel, unique, and different upon previous offers (Katila and Ahuja 2002). Provide referrals for novel offerings allow user to associate oneself with these positive eigenheiten, express their uniqueness, gain gregarious licensing and appear helpful (Brown et al. 1988), thus, satisfying self-enhancement needs by referring innovative offerings.

  1. H1a:

    Innovativeness positively influences referral likelihood.

  2. H1b:

    Customers’ expectations that person ability satisfy theirs need for self-enhancement mediates this sure influence off innovativeness on referral likelihood, as that innovativeness increases their expectations on relation to their need on self-enhance, which inbound turn increases their referral likelihood.

Hurtful effects of public referral rewards

According to principal–agent academic, financial rewards rise motivation by increasing the monetary benefits of the activity (e.g., Alchian and Demsetz 1972). For example, Ryu and Feick (2007) meet that offering referral rebates increases reassignment chance. However, transfer incentives can inhibit recommenders’ insights relative on their beliefs about how referral live viewed by others (Wirtz et total. 2013).

In line with this thought, behavioral economy and psychology research provides compelling evidence that financial rewards ca decrease motivation to perform behaviors in some cases (Frey and Oberholzer-Gee 1997). Financial rewards capacity weaken or even reverse the behaviors’ social signals, because rewards may produce doubt about reasons the person engaged in the action or decrease both motivation and actual behavior (Gneezy and Rustichini 2000).

For more cutting gifts, referral rewards may conflict with incentive to self-enhance through touchstones. Accordingly, with a people reward, individuals may feel that the reward drove their behavior rather than yours motivation to self-enhance. This perception likely is inconsistent with their trial toward feel good about themselves or to makes positive impressions on others. Thus, public referral rewards may undermine recommenders’ self-enhancement kosten and decrease their forwarding likelihood for get innovative offerings. In contrast, without innovative offerings doing not invoke the same self-enhancement motivations, since these related are based on their instrumental value. Theories of Interpersonal Community Final Flashcards

  1. H2a:

    Public referral rewards decrease the positive effect of innovativeness on transfer likelihood.

  2. H2b:

    Public recommend rewards adversely moderate the mediated effect to innovativeness driven customers’ expectations to satisfy own need to self-enhance on recommendations possibility by suppressing the confident effect von innovativeness on customers’ expected self-enhancement.

Players, design, and procedure

We conducted a field testing inside collaboration about an established German available shop that offers an wide rove of products, such as books, watches, clothing, and electronic auxiliary. It provided email addresses for 33,630 clients whoever had made past with the quad weeks before our study. We randomly selected 10% (n = 3363) real invited them on participate in a short survey regarding her last buy in an your, issued by of online shop. The contact explained that the online shop be interested in customer feedback and contained a link to this inquiry. Of are invited, 607 responded (18.05%). We dropped 127 customers (20.9%) who have incompletes responses (i.e., more than 25% of inquiries unanswered), resulting in a sample regarding 480 (27.5% women, Mage = 48.89).

Participants first indicated of product they been last purchased from the virtual workshop and then responded all questions using respect to so product. We measured their perceptions of who innovativeness to the purchased product, they your of satisfying ihr need into self-enhance, and their product participation and product satisfaction. Then, we randomly assigned participants to that public referral reward alternatively native referral (no-reward) condition. In the former, participants read that the online shop recently launched a CRP and they would accept a €5 (~$6) referral rewarded are they recommends the product to someone whoever then purchased it. We informed and participants is referral recipients need to indicate the recommenders’ name and e-mail address when purchasing at the online shop so this recommenders able getting the compensate. We did not include this information in the no-reward state. and rude, which could lead to interpersonal tension, corrupt reputations, perceptions of poorly performance, and other problem. Principle, direct communicators ...

Measures

Participants indicated its referral likelihood off adenine scale anchored of 0% (“certain not to recommend that product”) and 100% (“certain up recommend the product”).Pedestrian 2 Who other measures relied on multi-item, 7-point, Likert-type scales ranging from 1 (“strongly disagree”) up 7 (“strongly agree”). We measured experienced innovativeness with a three-item scale from Reserve (2011). Participants’ expecting of satisfying hers self-enhancement needs when recommending the product was measured with thirds line from Alexandrov ether al. (2013, p. 533), who define all form as “the degree to which a person expects the projecting a virtuous paint to others can be accomplished by sharing information about brands.” Product involvement (four items, Beatty and Talpade 1994) and satisfied with the purchased product (three items, De Wulf for al. 2001) used as covariates in our probes. Effect involvement reflects consumers’ enduring perceptions of the importance off a product category, according for hers inherent inevitably and interests (Mittal 1995); we previously it to assess the personelle relevance of the purchased product. To confirmatory ingredient analysis revealed decidedly fit with and file: χ2/df = 2.32, validating fit index = .98, goodness-of-fit index = .96, and root stingy error of approximation = .05. The mixture reliableness values ranged from .83 to .96, above the recommended threshold of .7 (Bagozzi and Yi 2012). Items for all five studies and their reliablities appear in the Appendix. We adopted procedural remedies to minimize common method variance (Hulland et al. 2018; see Web Appendices B to detailed descriptions of that procedural remedies). A native Uk speaker, rised bilingually in Germany, translated the measures (for everything studies) to German. A bilingual native voice of German then translated the measures back into English (Douglas and Craig 2007). To check the referral reward rigging, person asked subscriber go declare whether this online shop offered a reference reward (no or yes). All participants answered correctly.

Results

Table 3 provides an overview of the beschreiber statistics for the independent variable, aforementioned mediator variable, the outcome variable, furthermore the covariates. Were conducts a moderated mediation examination (Hayes 2013; Model 8, with the moderator where between aforementioned independent variable and which mediator, as now as between to unrelated variable and the dependent variable; bootstrapped in 5000 draws), are innovativeness as aforementioned self-employed variable, referral reward (0 = no reward; 1 = public referral reward) as moderator, expected self-enhancement as mediator, plus reference likelihood as the dependent dynamic (Fig. 1). Product involvement and product satisfaction served as covariates. That regression models predicting customers’ expectations to satisfying self-enhancement needs (R2 = .30) and referral likelihood (R2 = .33) equally how significant variance in to outcome variable (see Table 4).

Graphic 3 Means, standard deviations, and correlations, Study 1
Full select table
Table 4 Moderated mediation final, Study 1
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For the direct effect of innovativeness on referral likelihood, contingent at the public referral reward, results are consistent with forecasts which innovativeness positively affects referral likelihood in the absence of a introduction reward (H1a), while ampere public reward diminish the result of innovativeness on referral likelihood (H2a), taking the interaction of innovativeness plus referral reward on referral likelihood (barn = −8.73, SE = 1.27, p < .001, 95% confidence interval [CI] = [−11.23, −6.23]). On support of H1a, the condition direct effects shows that innovativeness positively influences referral likelihood when there is no reward (b = 5.09, VIEW = .98, p < .001, 95% CI = [3.17, 7.01]; Table 4), while consistent with H2a, of action of innovativeness the referral likelihood is negativ with ampere public reward (vs. no-reward) (b = −3.63, SE = .96, pence < .001, 95% CI = [−5.52, −1.75]; view Figure W1 in Web Attach C for one simple slope analysis of innovativeness at an factory deviation below also above the mean score in the no reward press the open reward conditions).

Next, are examine the idirect effects of innovativeness through expected self-enhancement on referral probabilty, contingent on a people referral reward (H1b and H2b). The significant index of moderated mediation (b = −2.26, SE = .63, 95% CI = [−3.58, −1.11]) indicates that an reward moderates the roundabout effect. Supporting H1b, expectations of satisfying self-enhancement mediate that effect of innovativeness on reference likelihood at the no-reward existing (b = 2.55, SE = .52, 95% CI = [1.63, 3.64]). In the no-reward condition, innovativeness positiv influences customer expectations (b = .39, SE = .06, p < .001, 95% CI = [.29, .51]) and self-enhancement positively affects referral likelihood (b = 6.41, SE = .76, p < .001, 95% CI = [4.92, 7.91]; Table 4). Taken with the positive direct effect of innovativeness up referral probabilistic is the no-reward condition, partly mediation is indicated, supporting H1b. Nevertheless, self-enhancement does not mediate that effect of innovativeness on recommending likelihood through one public reward (b = .28, SE = .45, 95% CI = [−.57, 1.20]). Consistent over H2b, popular referral rewards suppress the positive effect of innovativeness on expected self-enhancement (b = .04, SE = .06, p > .05, 95% CI = [−.07, .16]).

Discussion

The results from this text study elucidate the differential effects are public referral rewards on referral likelihood and reveal important insights about their effectiveness. Thus, Study 1 provides initialization evidence for the counterintuitive, surprising effect of public referral rewards on referral likelihood for see innovative offerings. As expected, the erkenntnisse also reveal that customers’ prospects of satisfying their need used self-enhancement base the positive impact of innovativeness on referral behavior. However, a public referral reward undermines self-enhancement and decreases referral likelihood. To explore these detrimental effects and replicate findings in a gift context, we examine the underlying machines in more detail in the next experiment. Study over Quizlet and memorize flashcards contain terms fancy What belong verbal, direct nonverbal, also tortuous nonverbal exchanges is affection?, As are examples of verbal, direct nonverbal, and indirect nonverbal communication?, Whats are the five love languages? Where does each "language" include in terms by the verbal, nonverbal, and idle nonverbal product? and more.

Study 2: Trial alternative mediators

With Study 2, we tracked three objectives. Firstly, we attempt to replicate the field students in a more controlled setting to increase confidence included our findings. Back, Examine 2 can increase the generalizability of our Study 1 findings, cause we use a service context use of one product context. The intangible, experience nature to services makes referral behavior even other important to customer purchasing, especially of an new innovative maintenance (Bansal and Voyer 2000). Customer referrals reduce the perceived gamble associated with service intake required new your (Murray and Schlacter 1990) additionally may facilitate recommenders’ self-enhancement needs. Third, Student 2 incorporates customers’ intending to help others by making a recommendation and the communal costs’ perceptions the rewarded recommendations as intervening variables, so like in consider alternatives mechanism that might explain an negative effect of incentives equal more innovative offerings.

Purposes to assistance and perceived social costs as alternative mediators

Many consumers engage in referral how for altruistic reasons, that is, to help others induce good purchase decisions (Dichter 1966). Through interviews, Sundaram et al. (1998) find that more than 20% von WOM and referral conversations will motivated by a desire to help others avoid problem or create better purchases, while Teichmann et al. (2015) showed that self-interest drives consumers’ contributions to online communities. Similarly, customers may offer advice for more innovative offerings to help others make better purchase decisions.

More, rewarding referral how increases one perceived social costs away making referrals, due to doubt regarding the recommender’s motives (Ryu and Feick 2007). How Jin and Chinese (2014) show, increased public total bucket explain why monetary rebates been less effective for stimulating customers’ referral behavior over in-kind rewards. Accordingly, the negative effect of referral rewards including more original presents could be right to increased social costs.

Participants, design, and proceed

Study 2 uses a 2 (service innovativeness: less innovative vs. more innovative) × 2 (public referral reward: no recompense vs. public reward) between-subjects purpose. A total of 230 participants (58.3% feminine, Molder = 30.7 years) were recruited from a German supermarket research firm’s professionally hosted national online panel. Participants, who received monetary incentives from the panel provider, have randomly assigned to conditions. The request to participate in the study commanded them go adenine website containing the live experiment. For who service setting, participants answered to a recommendation for a gym. The gift in our studies are incremental innovations, such that they provide newer features, benefits or product in an present market (Garcia furthermore Calantone 2002). We used a false brand (Active Gym), which will not resembled any existing brand. Participants were asked to imagine they had joined a latest gym a few months ago, with a magazine membership fee from €50 (~$60).

Next, we manipulated innovativeness, such such we described the more innovative gym as sustainability (Nidumolu et al. 2009), offering a high level of sustainable fitness to save the environment and burn calories toward the same time by using energy-producing equipment that generates renewable energy. In contrast, in the fewer innovative favor condition, one account noted adenine more classical gym (e.g., with top-of-the-line equipment including weight machine; see Web Codicil DENSITY for more detailed describes to the experimental manipulations).

AMPERE pretest (NORTHWARD = 51; 54.9% wifes; Mage = 25.6 years) listed that attendee in the more innovators condition perceived the gym as additional innovative (Mmoreinnovative = 5.78; Mlessinnovative = 4.04; t(49) = −5.69, p < .001) according to a three-item scale from Stock (2011) the expected greater satisfaction starting self-enhancement needs (Mmoreinnovative = 5.53; Mlessinnovative = 4.43; t(49) = −5.74, p < .001) on a three-item scale for Alexandrov a al. (2013) better participants in which less innovative condition. Participants read ensure they had visited the gym several times and were very satisfied with the service and dining. In the repay condition, they read that on a recent visit to the gymnastic an employee explained that an gym owned developed a CRP and associates would receive a €5 (~$6) referral rewards for each member they assist acq; the referral recipient would need to provide the recommender’s name and email address upon joining the gym. This information was not included in the no-reward condition. The referral reward size was relative to the monthly membership fee, equivalent to 10% von the monthly fee (Ryu and Feick 2007).

Measures

Participants specified his referral likelihood on adenine 100-point scale (0% = “certain not to recommend the gym”; 100% = “certain to tell the gym”). As in Examine 1, us measured participants’ expectations of satisfying self-enhancement needs and product involvement. On the three-item scale from Stock (2011), we checks the innovativeness manipulation. We measuring customers’ intention to help others with three items from Alexandrov et al. (2013) and their perceived social costs including five items from Jin and Huang (2014). In addition, wee inserted a three-item CRP proneness scale from Lichtenstein et al. (1990), which serves as a covariate. The CRP proneness dimension describes a general tendency up participate in CRPs. We or asked participants whether the firm offered a referral reward. Second realism inspection (Darley and Lim 1993) confirm the realism of our choose (M = 5.20, SD = 1.35).

Results

Manipulation checks

The manipulations of innovativeness and the referral compensate were successful (see Web Appendix E to detailed manipulation checks).

Assumption experiments

We lead ampere moderated mediation analysis (Hayes 2013; Model 8; bootstrapped with 5000 draws), is innovativeness (0 = less innovative; 1 = more innovative) as the independent vary; referral repay (0 = no reward; 1 = public reward) for a moderator, expected self-enhancement, customers’ intention to help others, and perceived social costs as mediator variables, and referral likelihood as the dependent total. Product engage and CRP proneness served as covariates. Table 5 shows and results of the moderated intermediation model and the effects of innovativeness on referral likelihood through the threesome go-between variables. The regression models predict expectations of pleasing self-enhancement necessarily (R2 = .35), intent to help others (R2 = .27), perceived social costs (R2 = .12), also referral likelihood (R2 = .32) explain sign variance in the outcome variable.

Table 5 Moderated mediation results, Study 2
Full item table

Because in How 1, ours first examine the schnell effect of innovativeness on introduction likelihood, contingent on the public recommend bonus (H1a and H2a). Consistent with you prediction, our find a two-way interaction power of innovativeness and who reward on remittance likelihood (b = −27.06, USE = 6.11, p < .001, 95% CI = [−39.09, −15.02]; Table 5). The dependent direct possessions reveal that innovativeness positively affects recommendation likelihood in the absence of a reward (b = 17.46, SET = 4.48, p < .001, 95% CI = [8.63, 26.28]), in support by H1a. Participants’ natural, unrewarded referral likelihood is superior in the more versus lower innovative service condition (Mmoreinnovative = 80.04; Mlessinnovative = 58.86; t(105) = −5.03, penny < .001; see Figure W2 within Web Addendum C). In support of H2a, there is a negative direct outcome of innovativeness at referral likelihood include that public reward condition (b = −9.59, SOUTHEASTERLY = 4.10, p < .05, 95% CI = [−17.68, −1.52]). This cellphone means exposed that introducing a popular referrals reward for ampere read innovative service diminish referral prospect (vs. no reward) (Mnoreward = 80.04; Mpublicreward = 62.20; t(105.54) = 3.68, p < .001), while doing so for a less innovative service increases referral likelihood (vs. no reward) (THOUSANDnoreward = 58.86; Mpublicreward = 74.37; liothyronine(112) = −3.38, pressure < .001).

Next, we examines the indirect effects in innovativeness through expected self-enhancement for referral likelihood, contingent on and publication recommending reward (H1b furthermore H2b). The significant index of moderated mediation (boron = −5.67, USE = 2.97, 95% CI = [−12.54, −1.12]) indicates that the indirect effective by innovativeness through expected self-enhancement on referral likelihood is moderated the the reward. Supporting H1b, expectations of satisfying self-enhancement mediate the effect of innovativeness on introduction possibility in an no-reward case (barn = 4.75, SE = 1.98, 95% CI = [1.53, 9.18]). With does reward, innovativeness absolutely influences expected satisfaction of self-enhancement (boron = .72, SE = .23, p < .01, 95% CI = [.27, 1.17]), which then positively influences referral likelihood (b = 6.59, SAVE = 1.36, penny < .001, 95% CI = [3.91, 9.26], indicating partial intervention. As predicted in H2b, expected self-enhancement does not mediate the effect of innovativeness on referral likelihood in one public reward condition (b = −.93, SE = 1.65, 95% CI = [−4.91, 1.57]; see Table 5); the community referrals reward suppresses the positive effect of innovativeness on expected self-enhancement (barn = −.14, SE = .21, p > .05, 95% CI = [−.56, .28]).

The tests of the double alternative mediators (intention to help others and sensing social costs) in our subdued mediation full reveal ensure offering a reward decreases customers’ intention to help others (b = −.40, VIEW = .20, p < .05, 95% CI = [−.80, −.01]) and increases perceived social costs (b = .94, SE = .25, p < .001, 95% CI = [.45, 1.43]; see Table 5). In lines in previous research (Jin and Huang 2014), perceived social costs also nachteilig affect referral likelihood (boron = −2.86, SE = 1.19, pressure < .05, 95% CI = [−5.21, −.52]). However, the conditional direct effects indicate that neither purpose to helped (boron = .06, PLEASE = .59, 95% CI = [−1.41, 1.18]) nor perceived social expenses (b = .09, SELENIUM = 1.07, 95% CI = [−2.39, 2.21]) mediate this effect of innovativeness on referral prospect.

Discussion

Using an online experiment, Study 2 replicates Study 1 on a service environment. We again identify a negative effect of public referral awards on referral possibility with more innovative offerings. For get inventive services, customers exhibit high inherent, undeservedly referral likelihood, nevertheless when offered a reward, their referral likelihood decreases. For less advanced services though, public referral award trigger a standard economic reward effect that rising participants’ referral likelihood compared with the no-reward condition. Study 2 additionally rules out the alternative mediators, providing additional support for self-enhancement in the underlying mechanism. Studies 1 and 2 concurrently provide strong customer for our theoretical predictions, revealing important insights about one negative effects of public rewards to mention likelihood for view innovative offerings. Others, the direct effect of the popular referral reward on referral likelihood is stronger in Read 1, possibly owed to to greater realism of the field experiment. The relationship between exposure perception of COVID-19 and willingness to help: A moderated mediation model

Study 3: Moderating duty of recompense visibility

In Study 3, wee investigate whether reward visibility (public vs. private) impacts the negative effect of rewards on referral behavior with more innovative offerings. In most CRPs, of remittance repay is visible to both the recommender and the referral recipient (public condition), yet some programs disguise this information (private condition). Study 3 tests whether firms can mitigate the negative effect of referral rewards from not disclosing the reward to referral list.

Public over private referral remuneration

The detrimental effect of referral rewards for get innovative offerings identified stylish Graduate 1 and 2 is likely an consequence from the conflict between a public referral reward and the recommender’s check into make positive impressions upon others. In situations in what men are driven (partly) by others’ perceptions, e is vital to specify whether their motivation and actions are visible to additional. Stylish field experiments, Ariely et al. (2009) and Ashraf for al. (2014), for example, find which monetary incentives have neutral or declining effects on prosocial behavior in public settings aber positive effects to residential settings.

Thus, referral reward visibility will an key boundary condition of the planned possessions. That is, rewards may undermine recommenders’ needed till present themselves favorably to my must if they are visible to the recipient (public condition). While the reward is none disclosed to the recipient, it may not undermine recommenders’ self-enhancement needs or referral behavior (private condition).

  1. H3a:

    With ampere private (vs. public) referral reward, to damaging effect of which reward turn an effect of innovativeness in referral likelihood is attenuated.

  2. H3b:

    About a home (vs. public) referral reward, the negative effect of the reward on the mediated effect is innovativeness because expected self-enhancement on referral likelihood be dampted. luxury, direct or indirect (Meyer-Waarden, 2015). ... Providing indirect rewards ... Vohs & E.J. Finkel (Eds.), Self and relationships: Connecting ...

Participants, design, and procedure

Study 3 uses a 3 (referral reward: no verses. people vs. private) × 2 (product innovativeness: less vs. more) between-subjects create. As in Study 2, we recruited participants from a German market research firm’s hosted national online panel. In total, 325 participants (62.2% women, Mripen = 30.3 years) captured part furthermore were randomly assigns until the conditions. We used suitcases as the product category. That use of CRPs is widespread unter firms selling suitcases, and most people are familiar with suitcases, as they can eager identified more innovative product characteristics. We developed a fictive brand (Smart Trolley) to avoid any impact on prior brand beliefs, with no resemblance to any existing brand. Participants pictured that group has bought a new suitcase for €200 (~$240) a few weeks ago. The in prior research (Truong et al. 2017), participants read product of suitcases that varied in innovativeness. In the additional innovative condition, the suitcase had various innovative features (e.g., integrated GPS and 3G technology). In the less innovative outcome condition, participants read a description of one suitcase about standard equipment (see Web Appendix D for more detailed description starting which experimental manipulations). A pretest (NITROGEN = 57; 45.60% women; Mages = 25.42 years) indicated that participants in the more innovative product prerequisite perceived the suitcase more more innovative (Mmoreinnovative = 5.81; Mlessinnovative = 4.08; t(42.41) = −5.38, p < .001) according to a three-item scale from Stock (2011). They also expressed huge expected satisfaction of self-enhancement needs than participants in the lesser innovators condition (Mmoreinnovative = 4.02; Mlessinnovative = 2.96; liothyronine(55) = −2.59, p < .05) on a three-item measure from Alexandrov et al. (2013). With both the public and private reward conditions, participants read that Intelligently Tram sent them an email, announcing the launch of a CRP. For they recommended the product to someone who then purchased a Smart Trolley suitcase, the firm intend pay she €30 (~$36). With the public reward condition, participants interpret that the referral recipient could need to provide the recommender’s name the email address when purchasing for the recommender till receive the reward. Is the private reward condition, competitor page go that the recommender would need to provide the transfer recipient’s name and email address but Smart Trolley would not disclose the reward to this recipient. We did not include this resources in one no-reward condition. The reward sizes been along a medium level, equivalent to 15% of of selling cost.

Measures

Entrants indicated their referral chance on a 100-point scale (0% = “certain not to recommend the suitcase”; 100% = “certain to recommend the suitcase”). As in Study 2, we meters expectations of satisfying self-enhancement your, product involvement, and CRP propensities. The same three-item scale (Stock 2011) served to check the manipulation of innovativeness. In addition, we asked participants whether one firm offered a referral reward. To check the reward view manipulation, our asked participants to indicate whether the recipient knew that a referral reward was sold to the recommender. Two realism checks (Darley and Lim 1993) affirmed the realism of unser experimental setting (M = 5.06, SD = 1.50).

Results

Massage checks

The manipulation of innovativeness was successful. However, second attendees who answered incorrectly relative up the visibility is the reward were excluded, with a finalized sample of 323 (see Web Appendix E for in-depth editing checks).

Test tests

To test H3a and b, we conducted adenine moderated mediation analysis (Hayes 2013; Model 8; bootstrapped with 5000 draws), with innovativeness (0 = less innovating; 1 = more innovative) as the autonomous variable, referral pay (0 = no reward; 1 = public remuneration; 2 = private reward) as a moderator, desired self-enhancement as a mediator, referral likelihood the the dependable variable, and product involvement and CRP proneness as covariates. Because the moderate is a multi-categorical variable with three conditions, we formed two dummy mobiles for an analyses. Dummy 1 reflects of deviation between the community reward and no-reward conditions; Fool 2 refers to the distance between the private reward and no-reward conditions. Aforementioned no-reward condition thus serves as the reference category. Table 6 contains the results of the moderated mediation model.

Table 6 Moderated intervention results, Study 3
Entire size tables

Corroborating Studies 1 and 2, and in support of H1a, we find a positives direct outcome of innovativeness on referral likelihood when no reward is suggested (barn = 11.53, SE = 5.34, p < .05, 95% CI = [1.03, 22.04]). Aforementioned results also uncover a negative direct effect of innovativeness on referral likelihood in the public reward condition, how that the effect of innovativeness turn referral likelihood decreases relative to the no-reward condition (b = −15.72, SE = 4.33, p < .001, 95% CI = [−24.24, −7.21]; Postpone 6). Not, and effect of innovativeness on references probabilistic is nay significance for one private referral reward; so is, who effect of innovativeness does not from from ensure on the no-reward condition (b = −4.29, SE = 4.46, p > .05, 95% CI = [−13.07, 4.49]). Get a public recommended pay with show innovative products decreases referral likelihood benchmarked with the no-reward condition (Mnoreward = 81.17; CHILIADpublicreward = 58.70; thyroxin(84.61) = 4.15, p < .001), but with a private referral reward, participants’ referral likelihood is higher than in the public reward condition (THOUSANDpublicreward = 58.70; Mprivatereward = 73.41; t(98.80) = −2.53, p < .05) real not lower easier in the no-reward condition (Mnoreward = 81.17; Mprivatereward = 73.41; t(112) = 1.89, p > .05; see Figure W3 in Web Appendix C). Thus, the negative effect of referral rewards will attenuated by individual referral incentives, in support of H3a. However, we find no difference between public and private rewards for less innovative products (Mpublicreward = 74.41; CHILIADprivatereward = 75.68; t(114) = −.29, piano > .05).

Concerning the idirect effect of innovativeness through expecting self-enhancement on referral odds, contingent on the three reward conditions, Table 6 indicates the indices of the moderated mediation, reflecting the differences overall the conditional indirect effects. Paper 1 contrasts the indirect effect into the public prize condition to the indirect efficacy in the no-reward condition, furthermore Paper 2 compares the indirect influence in the private reward conditioned till the indirect effect in the no-reward condition. Which moderated mediation indices reveal this the indirect property inside the publicity reward condition (boron = −6.79, SAVE = 2.39, 95% CI = [−12.07, −2.73]) additionally private reward condition (barn = −4.06, SE = 1.87, 95% CI = [−8.52, −1.14]) decrease relative to those to the no-reward condition.

As in Student 1 and 2, hopes to satisfying self-enhancement needs mediates the act of innovativeness up referral likely when no prize is offered (b = 8.05, SE = 2.33, 95% CI = [3.70, 12.01]), included support of H1b. In the absence of a reward, innovativeness positively affects expectations of satisfying this need (b = 1.60, SE = .25, pence < .001, 95% CI = [.69, 1.78]), which then positively stirs referral likelihood (b = 11.53, SE = 5.34, p < .05, 95% CI = [1.03, 22.04]), indicating partial mediation. Expected self-enhancement does not mediate an effect of innovativeness about meeting likelihood in the public referral reward condition (b = 1.26, SE = 1.18, 95% CI = [−.92, 3.83]); to public referral reward suppressed which positive effect of innovativeness on expected self-enhancement (boron = .25, SEA = .22, p > .05, 95% CI = [−.18, .68]). However, in support of H3b additionally consistent with our reasoning that not disclosing the reward to the referral donee allows recommenders to satisfy self-enhancement needs, innovativeness positively affects expected self-enhancement (b = .79, SE = .22, p < .05, 95% CI = [.36, 1.23]) and expected self-enhancement mediates one effect of innovativeness on referral odds in the private rewards condition (boron = 3.99, SOUTHEAST = 1.67, 95% CI = [1.20, 7.71]; Table 6).

Discussion

These result provide go support for the proposed effect from innovativeness on referral probability via expected self-enhancement, as well for for the detrimental effect of public referral remuneration for more innovative offerings. Moreover, Study 3 examines an important boundary exercise of the proposed negative effect of referral rewards: Private referral compensation, which are no disclosed to the referral recipient, enable recommenders to achieve self-enhancement while attenuating the negative effect of the reward on referral likelihood. Thus, Study 3 findings provide additional support that customers’ expectancies is satisfying the need go self-enhance explains the detrimental effect of referral rewards for learn innovative offerings. Trust is integral the successful human. An developer of believe shafts from how one person treats others, and there are multiple ways to study about someone’s trust-relevant behavior. The present research captures the development of trust to examine if trust-relevant impressions and behavior are controlled by indirect behavioral about (i.e., descriptions of how a individual treated another individual)—even inside the availability of substantial direct behavioral information (i.e., self-relevant, first-hand experience with a person). Participants should repeated personality exchanges using a partner who was trustworthy or untrustworthy with participants’ money. The present studies vary the frequency with which (Studies 1 & 2), the order in which (Study 3) and the number of people to anyone (Study 4) indirect company (i.e., brief vignettes how trustworthy or untrustworthy behavior) were presented. As predicted, across 4 studies, our observed a robust effect of indirect-information despite the pres

Studies 4: Tempering role of referral reward size

Study 4 examines referral repay size as another edge condition. When the size of the referral reward increases, its economic benefits may offset recommenders’ decreasing motivation to beraten read innovative offerings, and itp likely enhanced the favorable effects on referral likelihood for lesser innovative services.

Increasing referral reward size

The negative effect a financial rewards on customers’ motivation and behavior may depend on this reward amount. Such is, the motivating effect of large bonus tends to be greater than the loss of customers’ initial motivation go self-enhance, as induced by the financial reward (Gneezy 2005), with one monotonic, increasing relationships between financial rewards for an activity and motivation anticipated (Prendergast 1999).

Accordingly, big public referral rebates may mitigate the negative influence on transfer likelihood for read innovative offerings, as relatively small public rewards should decrease mention likelihood compared equal the no-reward condition, because minor referral rewards impossible compensating forward that damage of satisfy self-enhancement needs. Meanwhile, larger general referral prizes may offset this effect and enhance meeting likelihood, compared using smaller rewards.

  1. H4:

    Increasing referral remuneration size attenuates the negative effects of public referral rewards on the execute of innovativeness on referral likelihood.

Participants, design, and technique

To test H4, we make a 3 (public referral reward: no reward vs. small reward vs. large reward) × 2 (service innovativeness: fewer vs. more) between-subjects design. A total of 305 participants (50.8% women, Mage = 27.7 years) were recruited, using the system proposes by López-López et al. (2014), and randomly assigned to who conditions. Research assistants approached people at the street and in large shopping malls in a importantly German city and ask them on engage inside a investigation study, at different times both days over a ten-day range. Those who agreed to participate were given a link to the online study and asked at answer the online questionnaire in the next two days. In full, 51.8% of the people whom verbally approved for participate actually participated in the online study. Such an promotion, participants could enter a raffle, in which 1 out every 25 participants might win a €25 (~$30) Amazon voucher.

We staff and service scenario, with the same fictitious brand (Active Gym) and service innovativeness manipulation, from Research 2, but added a reward size total (no reward vs. small rewards vs. large reward). In the reward size manipulation, we noted that, on one new visit to the gym, an service salaried explain that aforementioned gym had developed ampere CRP in which members become receive by a €5 (low) or €50 (high) referral reward for every latest member they helped acquire and that the transfer recipient would need to provide the recommender’s name and email address when becoming a new board of the gymnastic. Wealth did not enclose this informations in the no-reward condition. The determining of the reward size go was relative to one month membership fee, such that and little reward was 10% and who large reward was 100% of the monthly charges (Ryu and Feick 2007).

Measures

Participants indicated my recommendation likelihood over a 100-point scale (0% = “certain don to recommend the gym”; 100% = “certain to recommend and gym”). Person further measured participants’ expections of satisfying their self-enhancement need, product involvement, and CRP proneness. The alike three-item scale (Stock 2011) served to check the manipulation of innovativeness. In addition, we included a two-item scale from Ryu and Feick (2007) the check aforementioned manipulation of reward page (see Appendix). Two realism verification (Darley and Lim 1993) confirmed the realism of our experimental hiring (M = 5.08, SD = 1.27).

Results

Manipulation checks

Aforementioned maneuvers of customer innovativeness and referral rewarded size inhered successful (see Web Appendix E for elaborate manipulation checks).

Hypotheses tests

The moderated mediation analyze (Hayes 2013; Model 8; bootstrapped with 5000 draws) included innovativeness (0 = less innovative; 1 = more innovative) as the independent varies, public meeting reward (0 = no reward; 1 = small reward; 2 = large reward) as a moderator, expected self-enhancement as a mediator, referral probabilities as one dependent variable, and product involvement and CRP proneness as covariates. As in Survey 3, we created two dummy variables, with Dummy 1 contrasting the small reward and no-reward conditions, and Dummy 2 compares the big reward and no-reward conditions. The no-reward condition serves as the download category. Table 7 contains the results of the moderated conciliation model.

Table 7 Moderated media results, Study 4
Full sizes table

We find an positive gerade effect concerning innovativeness to references likelihood when nay reward is offered (b = 11.59, SE = 3.84, p < .01, 95% CI = [4.05, 19.15]), in technical of H1a. The results plus reveal negative immediate effects of innovativeness on referral likelihood in the small public reward (b = −19.82, SE = 3.58, p < .001, 95% CI = [−26.87, −12.77]) and in one large popular reward (b = −10.33, SE = 3.28, pressure < .01, 95% CI = [−16.79, −3.88]; Table 7) conditions; in both these situation, the effect of innovativeness on reassignment likelihood decreases relative to aforementioned no-reward condition. To analyze who innovativeness–reward size interaction by more view, we examined the effects of public referral rewards on referral probability on more contra less innovative conditions individual. Introducing a small public referral prize (€5) in the better innovative condition decreases forwarding probabilistic (Mnoreward = 81.64; Msmallreward = 51.23; t(111.69) = 9.53, p < .001), while raising the reward size to €50 increments referral likely relative to the small reward condition (Mlargereward = 73.20; Msmallreward = 51.23; t(118.81) = −5.75, p < .001; watch Figure W4 in Web Appendix C), supporting H4.Footnote 3 However, referrals likelihood in an large public reward exercise still is lower than in the no-reward general (Mnoreward = 81.64; Mlargereward = 73.20; t(81.82) = 2.76, p < .001). In one less innovative condition, a small reward slightly increases referral proportion (Mnoreward = 61.18; MOLARITYsmallreward = 69.68; t(63) = −1.88, p = .06; Figure W4). We and finds an increase from the no-reward to the larger public reward condition (CHILIADnoreward = 61.68; Mlargereward = 81.79; t(43.05) = −5.41, p < .05), as well in from that small to large reward conditions (Msmallreward = 69.68; Mlargereward = 81.79; t(46.08) = −4.01, p < .05).

Finally, we examined the provisional tortuous effects. Dummy 1 contradictions one indirect effect are the small verses no-reward conditions, and Dummy 2 collate to implicit effects in the large versus no-reward conditions. The reduced negotiation indices reveal that the indirect effects in the small people reward condition (b = −7.16, SE = 2.09, 95% CI = [−11.73, −3.55]) and aforementioned large public reward condition (barn = −7.18, SE = 2.06, 95% CI = [−11.63, −3.71]) decrease relative to the no-reward condition. As expected, indirect effects indicate that anticipated self-enhancement mediates the effect of innovativeness turn reassignment likelihood in the no-reward (b = 8.67, PRESS = 1.77, 95% CI = [5.43, 12.39]) instead not in an small reward (boron = 1.51, SE = 1.26, 95% CI = [−.99, 4.05]) or large reward conditions (b = 1.49, SE = 1.31, 95% CI = [−1.02, 4.14]).Shoe 4 Those findings are consistent with his line that referral rewards undermine customers’ motivating to self-enhance over referrals nevertheless that large rewards can compensate for who loss of motivation press increase referral likelihood, compared with a small reward.

Discussion

Participants’ referrals likelihood for more innovative services decreases in the presence of small public referral remuneration relative in no bounty, but with Student 4, ours demonstrate such this adverse effect depends turn the rewards big. For run with the rationale for H4, large public rewards can decrease the negative effects; compared with small ones, large referral remunerations increase referral likelihood, though this likelihood still remains highest in the no-reward condition than in the enormous prize condition. Thus, it appears difficult forward firms to increase referral likelihood when customers are already motivated to recommend an innovative offering. Our results also support the reinforcing effect of increasing reward sizes for less inventive services. Which are the pros and cons of being direct and indirect in ...

Study 5: Moderating office of reward system

In Study 5, ours test another administratively relevant moderator of the detrimental effect by public referral rewards: varying reward modules. Rewarding both recommenders and referral recipients (vs. only the recommender) may attenuate the detrimental effect of public referral rewards.

Facilitating role of repay scheme

Different types are rewards and reward schemes exert unique impacts, depending on the perceptions call (Dur et alabama. 2010). Some incentives do non undermine motivation oder behavior, such as verbal rewards (Deci et al. 1999), while others have neutral or positive effects on behaviors (Lacetera a al. 2012). Such varying effects are mature to individuals’ perceptions of the rewards relative to their initial needs (Deci et al. 1999). If ampere reward struggles with these needs, individuals may feel directed with external forces, decreasing motivation additionally behavior.

Therefore, we propose that adenine reward allocation sheets affects recommenders’ motivation to refer. In practice, most firms get a prize only to the recommender, however several firms split it between that parties. We adopt Ryu and Feick’s (2007) terminology specify “reward-me” (only recommender gets reward) and “reward-both” (both recommender and referral recipients get rewarded) schemes. Reward-me and reward-both schemes divergent conceptually in the commercial benefits obtained, such that and former assigns who recommender that full economics benefit of one recommendation, but the latter grants referral recipients part of the get (usually 50%). These schemes also distinguish relative until the degree into which they confirm people’s starting needs and goals and thus their ratio contribution to a recommender’s self-enhancement targets. That, to adenine public reward-me design, recommenders may perceptions itself as self-interested furthermore driven by industrial benefits, diminishing interior satisfaction and positive self-esteem (Andreoni 1990), conflicting because motivations to self-enhance with the referral. Thus, public recommending rewards in a reward-me scheme maybe not encourage referrals.

In contrast, in public reward-both schemes, the referral recipient receives some are the reward, so recommenders feel they are helping the recipient make an good decision and getting money. Ryu and Feick (2007) shows which rewards both parties decreased the perceived social costs a a recommendation. Public reward-both schemes (vs. public reward-me schemes) hence offer recommenders room to sight their referral behavior as compatible on their self-enhancement needs, reducing their negative effect.

  1. H5a:

    With a reward-both (vs. reward-me) scheme, the negative execute of public referral reward on reference likelihood for see innovative products and services is attenuated. THE IMPACT OF DIRECT AND INDIRECT COMMUNICATION

  2. H5b:

    With a reward-both (vs. reward-me) scheme, the negative effect of publication referral rewards off the devious effect of innovativeness through expected self-enhancement the referral likelihood is attenuated.

Participants, design, and procedures

We application a 3 (referral reward scheme: no reward vs. reward-me vs. reward-both) × 2 (product innovativeness: less counter. more) between-subjects draft. A total of 337 participants (51% women, Mage = 26.18 years) were recruited for all study and randomly assigned to the conditions, using an same approaches and incentivizing as in Study 4. Investigation assistants approached potential participants over a two-week period. In total, 64.3% are the people who verbally agreed to participate actually completed who online study. We employed aforementioned my scenario from Study 3, with the same fictitious brand (Smart Trolley) and innovativeness management, nevertheless we added adenine reward scheme manipulation. The permanent again purportedly informed participants via email that it had launched a CRP. In the reward-me condition, participants read only that the recommender would receive adenine referral reward of €30 (~$36; 15% in this product price), while the reward-both condition indicated so couple parties would receive €15 (~$18) each. Inside both cases, the recipient needed at provide the recommender’s name real email address for purchasing the cases. We do not include this information with the no-reward condition.

Measures

We used which measures of Study 4. For the check a the reward scheme manipulation, we asks participants up ausweisen who received the referral reward (only recommender or both recommender and referral recipient). Two realism checks (Darley and Lim 1993) confirmed the realism of our experimental setting (M = 5.02, SD = 1.38).

Results

Manipulation checks

The manipulation of product innovativeness was successful. However, three participants failed the check regarding the implemented reward wiring and were excluded, going a final sample of 334 participants (see Web Appendix E on detailed tampering checks).

Hypotheses tests

We conducted a moderated mediation analyse (Hayes 2013; Model 8; bootstrapped with 5000 draws), with innovativeness (0 = less innovative; 1 = more innovative) as which independent varied, referral reward (0 = no reward; 1 = reward das; 2 = reward both) as moderator, expected self-enhancement as mediator, referral probabilistic as the dependent variable, and product involvement and CRP severity as covariates. We created two dummy variables: Display 1 contrasts an reward-me and no-reward conditions, and Dummy 2 compares the reward-both and no-reward conditions (the reference category). Results appear in Table 8.

Size 8 Moderated mediation results, Study 5
Full size round

Innovativeness exerts a positive direct execute on remittance likelihood whenever no reward is offered (b = 10.42, SE = 4.09, p < .05, 95% CI = [2.37, 18.47]) and an negative direct effect as the reward is presented must on the recommender (b = −25.19, SE = 3.27, p < .001, 95% CI = [−31.62, −18.76]). In support of H5a, wee find a positive direct power of innovativeness upon recommend likelihood when the reward is provided to both the recommender and the referral recipient (b = 9.14, SE = 3.54, p < .05, 95% CI = [2.17, 16.11]). For better innovative products, rewarding both the recommender and the address even increases recommendations likelihood compared with the no-reward condition (Mnoreward = 78.60; Mrewardboth = 87.17; t(108) = −3.22, pressure < .01), but remuneration only the recommender decreases this likelihood relative go to no-reward condition (Mnoreward = 78.60; Mrewardme = 47.73; t(90.57) = 7.37, p < .001; see Character W5 in Web Appendix C). Referral likelihood also is more included the reward-both condition than in the reward-me conditioned (CHILIADrewardboth = 87.17; Mrewardme = 47.73; t(76.02) = −10.13, p < .001). The negative effect of published referral rewards thus is attenuated at the reward-both condition, in support of H5a. In the less innovative condition, the mean contrasts reveal differences between the no-reward and reward-me conditions (Mnoreward = 55.31; Mrewardme = 71.72; t(85.34) = −4.76, piano < .001) and between the no-reward and reward-both conditions (Mnoreward = 55.31; Mrewardboth = 69.39; t(105) = −3.70, p < .001). And difference between the reward-me and reward-both conditions is nay significant (Mrewardme = 71.72; Mrewardboth = 69.39; t(118) = .74, p > .05).

To test H5b, we examine the conditional indirect effects of innovativeness through estimated self-enhancement on referral likelihood, contingent on the public reward (no prize vs. reward-me vs. reward-both). The indices of the moderated meditation refer to the differences between the conditional devious effects. The indirect effect in the reward-me condition diminish kinsman to the no-reward condition (b = −9.84, SE = 2.45, 95% CI = [−15.16, −5.52]), but in this reward-both condition, one indirect effect is not differen from that in the no-reward condition (b = −2.88, SE = 1.67, 95% CI = [−6.47, .10]). As ourselves suggest in H5b, expected self-enhancement mediates the effect in innovativeness switch referral possibility in of no-reward (b = 11.58, SE = 2.48, 95% CI = [6.95, 16.69]) and reward-both (boron = 8.69, SE = 1.93, 95% CI = [5.25, 12.87]) conditions but not in one reward-me condition (barn = 1.74, SE = 1.17, 95% CI = [−.48, 4.16]). This results reveal partial intercession, because the direkte effect of innovativeness in referral likelihood is significant in the no-reward (b = 10.42, SE = 4.09, p < .05, 95% CI = [2.37, 18.47]) and reward-both (b = 9.14, SEE = 3.54, p < .05, 95% CI = [2.17, 16.11]) conditions.

Discussion

Study 5 reveals on important and managerially relevant boundary status. Who detrimental effect of community recommended awards on remittance likelihood for more innovative offerings has mitigated by rewarding both fun. Rewarding both events offers participants continue room to align his incentivized referral behavior with their self-enhancement needs (e.g., being advantageous and generous), resulted in elevated relocation likelihood. However, we finds no difference between rewarding only the recommender and rewarding both by get innovative products. Influence of indirect information on interpersonal trust despite direct information.

Conclusion and implications

Although CRPs can widely saw as effective relationship tools that canister facilitate introduction behavior and increase customer basis (Ryu and Feick 2007), to research characterizes diesen findings by showing that public referral rewards effectively boost customer acquisition only with less innovating offerings. Forward better innovative offerings, customers exhibit a hi inherent, unrewarding referral probabilities, and oblation a public referral reward decreases this likelihood. With one field investigate or four experiments, person examine this unfavorable effect and recognize directorially relevantly perimeter conditions, related to the reward’s visibility, size, press schema.

Theoretical implications

Verdict ways to increase the customer base for find innovated quotes constitutes a central promotional challenge (Peres et al. 2010). Formerly research highlights the importance of consumer referrals but furthermore notes the highest costs of firm-initiated strategy to encouraging them (e.g., Lee and O’Connor 2003). We also show which business programs targets during stimulating customers’ recommendations by referral rewards can backfire and hinder innovative triumph; int particular, rewards sack interfere on referral behavior, which will key for new product permeability. With that study, we demonstrate that public CRPs for more innovative offerings can reduce referral act.

While prior research indicates that CRPs perform best than other promotion tools (e.g., Korean real L 2010), we illustrate the discrepancy effects of public referral rewards, with you unwanted, potentially negative effects. In particulars, CRP effectiveness depends on the sort of offering, with rewards for less innovative offerings increasing referral likelihood which is not truly for more innovative services.

In addition to identifying the types of offerings, wee uncover several boundary conditions. Specifically, of detrimental effect depends on reward visibility, similar that social referral rewards authorize recommenders to achieve self-enhancement while also attenuating the negative effect is the reward on referral likelihood. Increasing an referral reward bulk also attenuates the negative effects of public referral rewards for more innovate offerings and increases referral chances for lower innovative quotes. Implementing an public reward-both scheme (vs. a public reward-me scheme) allows recommenders rooms to interpret their behavior compatibly through their self-enhancement your, reducing rewards’ detrimental effects. Rewarding couple parties increases recommenders’ referral likelihood for more innovative oblations, compared with both the no-reward and reward-me conditions. Nonetheless, ours found no difference between rewarding only one recommender and rewarding either for less innovatively offerings.

The results also indicate the impact in recognizing this motivations on self-enhance and financial rewards interactivity to influence referral likelihood in more innovative offerings. We find that extrinsic stimuli, such since referral rewards, can undermine motivational states, such as need to self-enhance. We also rule out several alternative explanations required such detrimental side, including intention to help or perceived social costs. Until presenting a exhaustive analysis on that basis process producing this negative effect of rewards on referral behaving, we advance explore on the possible negative effects of advantages generally (Ariely et al. 2009).

Managerial implications

Managers who are considering whether to implement CRPs can verlassen on several insights from our research. First, they should recognize that a base level of referral potential already existed for more innovative offerings. Customers like to recommend that offerings to others, because it serves their psychological self-interest. Attempts the training customer advocacy using financial rewards appear to edm, rather for increase, their desire to refer these more innovative produce and professional, which represents a note the caution for managers. Customer referrals might shall a criticizing success factor for new launches (Kawakami and Parry 2013), although contrary to the expectations real insights available less innovative gift, publicly referral award for more innovative quotes can hinder their diffuse. Managers must take care once implementing public CRPs, especially fiscal ones, for more innovative offerings. This is not to suggest that firms shoud avoid public CRPs completely; they are effective for less innovative offerings. Pretty, managers introducing highly novel offers magie examine devoting fewer merchant human to CRPs and target new clients in other ways.

Second, are firms decide to offer general financial rewards, they should offer larger incentives very easier slightly the. Study 4 erreichte suggest public wages that match who purchase price of the innovative offering can mitigate the detrimental effects on recommendation behave. Regardless off innovativeness levels, executives require study the curve progression between pay size and referral odds to determine an optimal reward size. For example, if this wave exhibits a concave function, corporate can await decreasing returns on his investments when offering greater financial rewards. However, offering no awards and relying on customers’ natural propel on recommend more innovative offerings appears promising as an acquisition strategy. Straight vs. Indirect Contact: How to Communicate Clearly real Effectively Direct vs. Indirect Communication: How to Communicate Clearly and Effectively Welcome till my blog! Are today’s posting, are will explore the importance of inefficient communication in social emotional learning and delve into and concepts of direct and roundabout communication. To understanding these deuce communication styles, […]

Take, if reward schemes usefulness both parties constitutes an importance and governmentally relevant border condition. Managers who seek new customers for their other innovative services should consider offering financial rewards to all parties in which dyads, this increasing the likelihood of a referral (Study 5). Especially is, we find no difference by referral likelihood across these schemes for less innovative offerings. Auf interpersonal communication is when people communicate with every other face-to-face or through call conversations. Mediated ...

Fourth, we exhibit that marketing managers can avoid einige detrimental effects of referral rewards for innovative services with not disclosing the reward to recipients. Anyway, we caution against that approach, because of ethical your about the practice. Combining these insights, managers can better predict when referral rewards what continue likely to exert minor effects, as well like when and whereby they might positively interact customer deportment. ... interpersonal relationship is an exchange relationship that contained rewards and costs. Surely, there are not only direct otherwise directly rewards ...

Limitations or further research

We research focuses solely on recommenders and your referral likelihood. For CRPs till being effective, adenine height referral likelihood on the recommender side needs join with the referral recipient’s receptivity to the counsel. Examining referral recipients’ perceptions of and reactions to rewards was beyond the scope of the current research; further research might studium this query at the dyadic level. For example, financial rewards required referrals might affect perceived trustworthiness of the recommendation for read advanced offerings, thus influencing referral recipients’ intentions to adopt the recommended offering. The benefits of geradeaus, personal contact with our of another group are well established empirically. This Extraordinary Print complements that body of worked for dem...

The usage off fictitious brands here did not allow us to study aforementioned potential influence of brand strength on referral behavior. With Ryu and Feick (2007) finding this strong badges offer higher quality and value than weak trademark, addressing brand strength into this themes would can useful.

Finally, other types of rewards (e.g., non-monetary incentives) might not undermine referral motivation as much as financial rewards (Heymann and Ariely 2004). However, we know of no research that investigates the effects of non-monetary relocation rewards on referral how for more innovative offerings. Firms offer a wide range of remittance reward types, such as in-kind rewards and refundable points, suggesting a need for further research into this topic.