Words Matter! Toward a Prosocial Call-to-Action for Online Referral: Evidence from Two Field Experiments
Authors: Jung, Jaehwuen; Bapna, Ravi; Golden, Joseph M.; Sun, Tianshu
Journal: Information Systems Research (2020)
<jats:p> The underlying premise of referral marketing is to target existing ostensibly delighted customers to spread awareness and influence adoption of a focal product among their friends who are also likely to benefit from adopting the product. In other words, referral programs are designed to accelerate organic word-of-mouth (WOM) exposure using financial incentives. This poses a challenge, in that it mixes an intrinsically motivated process (stemming from the desire to share a customer’s delight with a product or a service) with an extrinsic trigger in the form of a financial incentive. In this paper, we demonstrate how firms can benefit from framing calls-to-action for referral programs in such a way as to move closer to the original intent of organic, intrinsically motivated WOM marketing, and yet at the same time reap the benefits of using a financial incentive to increase referral rates. In particular, via two large-scale randomized field experiment involving 100,000 customers each, we show the efficacy of a prosocial call-to-action over some of the more commonly used calls-to-action observed in practice. Additional mechanism-level analysis confirms the importance of an al…