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Can Friends Also Become Customers? : The Impact of Employee Referral Programs on Referral Likelihood
Journal
JSR Journal of Service Research
ISSN
1094-6705
ISSN-Digital
1552-7379
Type
journal article
Date Issued
2014-05
Author(s)
Abstract
Customer referral programs, which encourage existing customers to recommend a firm's services in their social network, have become a popular marketing tool. This research focuses on another social group that may also issue recommendations, namely a firm's own employees. Drawing on social identity research, the authors find that employees are more likely to promote their firm's services when their employee identity is highly salient. Moreover, this effect is moderated by relational norms, such that employees are only willing to refer their friends when they feel that this is an appropriate behavior in a friendship. Specifically, the results reveal that identity salience only affects referral likelihood when referrals are framed in terms of communal sharing rather than market pricing (study 1) and when referral rewards are assigned to the friends rather than to the employees (study 2). Finally, study 3 shows that relational framing is only effective in increasing referrals when employees feel that there is little risk that their firm's services will not perform as expected. Thus, managers interested in increasing employee referrals may not only need to link referrals to employees' organizational identity, but may also need to convince employees that referrals do not violate relational norms.
Language
English
Keywords
Referral marketing
word-of-mouth
social identity
social-relational theory.
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Business Innovation
Refereed
Yes
Publisher
Sage Periodical Press
Publisher place
London UK
Volume
17
Number
2
Start page
119
End page
133
Pages
15
Subject(s)
Eprints ID
228903