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Referral programs, customer value, and the relevance of dyadic characteristics

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  • Armelini, Guillermo
  • Barrot, Christian
  • Becker, Jan U.

Abstract

Referral programs have become a popular tool to use the customer base for new customer acquisition. We replicate the work of Schmitt et al. (2011) who find that referred customers are more loyal and valuable than customers acquired through other channels. While our results confirm that rewarded referrals indeed reduce the risk of customer churn, we do not find that referred customers are necessarily more valuable. Analysis of the relationship between senders and receivers of referrals demonstrates that demographic similarity drives the referred customer value.

Suggested Citation

  • Armelini, Guillermo & Barrot, Christian & Becker, Jan U., 2015. "Referral programs, customer value, and the relevance of dyadic characteristics," International Journal of Research in Marketing, Elsevier, vol. 32(4), pages 449-452.
    • Handle: RePEc:eee:ijrema:v:32:y:2015:i:4:p:449-452
    DOI: 10.1016/j.ijresmar.2015.09.004
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    References listed on IDEAS

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    1. Eyal Biyalogorsky & Eitan Gerstner & Barak Libai, 2001. "Customer Referral Management: Optimal Reward Programs," Marketing Science, INFORMS, vol. 20(1), pages 82-95, August.
    2. Hinz, Oliver & Skiera, Bernd & Barrot, Christian & Becker, Jan, 2011. "Seeding Strategies for Viral Marketing: An Empirical Comparison," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 56543, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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    Cited by:

    1. Adela-Laura POPA & Dinu Vlad SASU & Teodora Mihaela TARCZA, 2021. "Investigating The Importance Of Customer Lifetime Value In Modern Marketing - A Literature Review," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 30(2), pages 410-416, December.
    2. Muller, Eitan & Peres, Renana, 2019. "The effect of social networks structure on innovation performance: A review and directions for research," International Journal of Research in Marketing, Elsevier, vol. 36(1), pages 3-19.
    3. Olaf Maecker & Christian Barrot & Jan U. Becker, 2016. "The effect of social media interactions on customer relationship management," Business Research, Springer;German Academic Association for Business Research, vol. 9(1), pages 133-155, April.
    4. Heike M. Wolters & Christian Schulze & Karen Gedenk, 2020. "Referral Reward Size and New Customer Profitability," Marketing Science, INFORMS, vol. 39(6), pages 1166-1180, November.
    5. Vijay Viswanathan & Sebastian Tillmanns & Manfred Krafft & Daniel Asselmann, 2018. "Understanding the quality–quantity conundrum of customer referral programs: effects of contribution margin, extraversion, and opinion leadership," Journal of the Academy of Marketing Science, Springer, vol. 46(6), pages 1108-1132, November.
    6. Meyners, Jannik & Barrot, Christian & Becker, Jan U. & Bodapati, Anand V., 2017. "Reward-scrounging in customer referral programs," International Journal of Research in Marketing, Elsevier, vol. 34(2), pages 382-398.
    7. Kohsuke Matsuoka, 2020. "Exploring the interface between management accounting and marketing: a literature review of customer accounting," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 157-208, September.

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