Abstract
There are more and more firms engaging in referral reward programs to increase customer participation and customers’ interests in products, so the importance of referral reward program is increasing. This paper aims to provide the guidelines for companies to design the referral reward programs that improve the recommendation giver’s willingness to recommend. We conducted a questionnaire survey to examine the effects of product-related risk, reciprocity, information asymmetry, and tie strength on the recommendation giver’s recommendation intention. We found that product-related risk, reciprocity, information asymmetry, and tie strength all have influence on recommendation intention. The recommendation intention is negatively affected by product-related risk, positively affected by information asymmetry and the tie strength between the recommendation giver and receiver. Besides, the relationship between product-related risk and recommendation intention is moderated by reciprocity, and reciprocity is also the moderator of the relationship between tie strength and recommendation intention. To increase the recommendation giver’s willingness to recommend, this paper suggests the firms designing referral reward programs that involve low risk product, reciprocity, information symmetry, and strong tie.