Egotistic or altruistic? An experimental investigation of referral rewards in social e-commerce from the perspective of relationship norms

Abstract

In the contemporary arena of e-commerce strategies, companies are increasingly drawn to the use of referral program incentives to prompt existing customers to recruit new ones. However, the existing knowledge falls short of unraveling the intricate dynamics governing the sharing of diverse rewards in company-consumer and consumer-consumer relationships. This study bridges this gap by unveiling a nuanced connection between the effectiveness of referral rewards and the interplay of both the recipient’s propensity to refer during the referral stage and the recipient’s inclination to accept during the acceptance stage. Through three scenario-based experiments, we explore the influence of the consumer-company relationship on individuals’ willingness to engage in referrals during the referral stage, identifying two pivotal psychological mechanisms: economic and social motivation. Our findings underscore those selfish incentives, primarily benefiting the sender, outperform prosocial incentives, particularly within exchange norms, yet reveal the reputational advantages associated with prosocial referral rewards in communal norms. Shifting the focus to the acceptance stage, we scrutinize the relationship between the referrer and the recipient, discovering that sender-benefiting rewards may undermine a recipient’s acceptance due to negative motivational inferences, yet this effect can be moderated by relationship norms. Our findings offer a comprehensive understanding of the multifaceted role played by referral rewards in shaping consumer behavior within social e-commerce, providing valuable guidance for companies seeking to optimize their referral strategies by aligning rewards with relationship norms to enhance overall effectiveness.

Appendices

Appendix A. Literature on referral rewards

Research	Key IVs	Key DVs	Main Result	Research perspective	Rewards type
Peng, Xixian et al. (2023)	Reward, congruity	Consumers’ recommendation intention	nonmonetary rewards with moderate congruity trigger consumers’ recommendation intention in RRPs more than those with high and low congruity	Referrer	Nonmonetary rewards
Qi Wang et al. (2017)	Reward, tie strengths	Receiver responses	People with strong ties tended to accept a referral more often than those with weak ties, because people with strong ties gave their friends’ benefits more consideration	Recipient	Social rewards (non-monetary rewards vs. market rewards (monetary rewards)
Jaehwuen Jung et al. (2021)	Reward	Likelihood to accept referrals	Both equal-split and generous schemes result in a higher number of conversions by significantly increasing the invitee’s likelihood to accept referrals	Recipient	Selfish reward, equal-split reward, and generous reward
Jin, Liyin et al. (2014)	Reward	Referral generation and acceptance	Monetary rewards (vs. in-kind rewards) lead to less referral generation and acceptance	Recipient and referrer	Monetary versus in-kind rewards
Gangseog Ryu and Lawrence Feick (2007)	Reward, Tie Strength, and brand strength	Referral likelihood	For strong ties and stronger brands, providing at least some of the reward to the receiver of the referral seems to be more effective	Referrer	No reward and reward
Rachel Gershon et al. (2019)	Reward	Referral likelihood	Reputational benefits render recipient-benefiting referrals just as effective as sender-benefiting referrals at the relatively low-cost referral stage; at the uptake stage, recipient-benefiting referrals are more effective	Recipient and referrer	Sender-Benefiting and Recipient-Benefiting
Michael R. Sciandra (2019)	Tie-strength	Likelihood of Recommendation Acceptance	When a strong tie exists between the recipient and recipient, consumers are just as likely to take a recommendation when a referral reward is present as when a referral reward is absent	Recipient	Reward is present or absent
Ina Garnefeld et al. (2013)	Customer referral programs	Loyalty	Referral programs with larger rewards strengthen attitudinal and behavioral loyalty, whereas smaller rewards affect only the behavioral dimension	Referrer	Larger rewards and smaller rewards

Appendix B. Polit Study

Materials	Measures [35]
Exchange Relationship Condition
The main reason for your frequent patronage is that the prices are affordable and you can often enjoy their specials. Their service is also more attentive, and they can answer your questions and serve you promptly. The restaurant has the best prices compared to other restaurants of its type. To get discount offers on time, you follow this restaurant and often receive information about their special offers or package discounts. All in all, you have a pretty good impression of this restaurant	I choose this restaurant because it’s good value for the money I choose this restaurant because it gets money’s worth I think this restaurant provides services to get business Cronbach’s α = 0.811 (1 = strongly disagree, 7 = strongly agree)
Communal Relationship Condition
The main reason you frequent it is that you find it enjoyable to eat at this restaurant, you know the owners and staff well, and you can exchange pleasantries with them while waiting. This makes you feel at home and very warm. In your opinion, this restaurant is very familiar with your preferences and taboos. Although this restaurant is not the cheapest, you consider coming here whenever you want to dine out. You follow this restaurant to keep up with their developments and receive frequent greetings and messages from them. All in all, this restaurant leaves you with a good and unforgettable impression	This restaurant brings me to have warm feelings I think this restaurant can help in a time of need I think I will miss them if I move away I have special feelings for this restaurant I care about this restaurant I think this restaurant likes customers like me I think this restaurant cares about me (Cronbach’s α = 0.868) (1 = strongly disagree, 7 = strongly agree)

Appendix C. Study 2: Factors that influence recipients’ willingness to accept referrals

Materials
Exchange Relationship Condition You purchased a product from cell phone brand M and are satisfied with its products and services. Of course, the main reason you bought it was because it was affordable and met your performance needs. This cell phone brand is generally the best value for the money compared to its counterparts. To buy this phone at a better price, you will follow the WeChat number of this phone brand to get timely information about discount offers. You can often receive information about product specials or new product promotions. In short, you have a pretty good impression of this cell phone brand
Communal Relationship Condition You have purchased a product from cell phone brand M and are satisfied with its product and service. Your experience with each purchase has been pleasant. In your opinion, this brand is very attentive to your personal needs. You are very familiar with their products and services. To follow and understand the brand’s development, you follow its WeChat public number, and you can receive its thoughtful greeting messages almost every week, which makes you feel very warm. You have a special feeling for the brand, and usually consider it first when buying electronic products, although its price is not the cheapest. In short, the brand leaves you with a good and unforgettable impression
Measures [50] (Hennig, 2004)
Economic Motivation	I mainly recommend the brand to my friends to get bonus rewards I recommend the brand to my friends to make money from sharing (Cronbach’s α = 0.704)
Social motivation	I mainly recommend the brand to my friends to gain respect from others I mainly recommend the brand to my friends to build a good image I mainly recommended the brand to my friends, mainly for recognition I mainly recommend this brand to my friends because it will receive good reviews (Cronbach’s α = 0.818)

Appendix D. Study 3: Factors that influence recipients’ willingness to accept referrals

Materials
Exchange Relationship Wang is described as a friend with whom you have an average relationship. You are friends in an education course. You usually have little interaction and only communicate about course requirements or exchange course information	Sender-Benefiting Condition If you download the app through the link sent by Wang and register as a user, Wang will receive a referral bonus of 10 RMB
Communal relationship Wang is described as a friend with a very close relationship. You often chat, and when you see information that may be useful or valuable to each other, you will be the first to refer it	Recipient-Benefiting Condition After downloading the app through Wang’s link and registering as a new user, you will get a 10-RMB registration bonus
Measures (Johnson & Grimm, 2010)
Regarding your relationship with Wang, to what extent does the following description fit?	Exchange Relationship
	We give to each other because we can get equal value in return
	Communal Relationship
	We give to each other because we care about each other and want each other’s needs to be met, regardless of whether we get equal value in return
Willingness to refer (dependent variable) [6] (Ryu & Feick, 2007)	Would you reject or accept Wang’s referral? To what extent would you accept Wang’s referral? To what extent would you reject Wang’s referral? (Reverse question) (Cronbach’s α = 0.773)
Motivation for sharing [50] (Hennig, 2004)	Wang recommended this app to me for his own benefit Wang recommended this app to help me (reverse question) Wang recommended this app to take advantage of me Wang recommended this app to me with ulterior motives Wang recommended this app to me because he wanted to make money (Cronbach’s α = 0.832)