How scarcity and thinking styles boost referral effectiveness

Abstract

Referral reward programs (RRPs) are a widely used tool to stimulate word-of-mouth. However, marketers still face a dilemma—while incentivization encourages senders to make referrals, recipients often react negatively towards such incentives. We propose a solution—referral scarcity—to improve referral effectiveness depending on thinking style. Three experiments show that limiting the number of referral rewards makes holistic-thinking recipients feel more special, boosting their referral acceptance and RRP evaluations. We replicate these effects across various contexts and in the relationship norm most common for referrals—exchange norm. Our findings theoretically contribute to the research on incentivized word-of-mouth, scarcity appeals, and thinking styles. We also demonstrate how marketers can adopt sender-benefiting referral rewards to maximize its dissemination and acceptance while identifying the consumer segment where it would be most effective.

Metadata

Item Type:	Article
Authors/Creators:	Ang, D https://orcid.org/0000-0003-3739-5870 Gerrath, MHEE https://orcid.org/0000-0001-7422-2181 Liu, Y https://orcid.org/0000-0001-6641-4845
Copyright, Publisher and Additional Information:	This is the peer reviewed version of the following article: Ang, D , Gerrath, MHEE and Liu, Y (2021) How scarcity and thinking styles boost referral effectiveness. Psychology and Marketing, 38 (11). pp. 1928-1941. ISSN 0742-6046, which has been published in final form at https://doi.org/10.1002/mar.21557. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Keywords:	analytic–holistic thinking; referral; referral reward programs; relationship norms; scarcity
Dates:	Published: November 2021 Published (online): 6 August 2021 Accepted: 14 July 2021
Institution:	The University of Leeds
Depositing User:	Symplectic Publications
Date Deposited:	21 Jul 2021 11:48
Last Modified:	06 Aug 2023 00:13
Status:	Published
Publisher:	Wiley
Identification Number:	10.1002/mar.21557
Open Archives Initiative ID (OAI ID):	oai:eprints.whiterose.ac.uk:176262

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How scarcity and thinking styles boost referral effectiveness

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