Browsing Conference Presentations by Author "Roelens, Iris"
Social ties in customer referral programsRoelens, Iris; Baecke, Philippe; Benoît, Dries (2018)Customer referral programs are marketing programs in which existing customers are rewarded for bringing in new customers. The aim is to attract new customers by leveraging the social connections of existing customers with potential customers. Previous research has shown that referred customers are more valuable to a ﬁrm than non-referred customers. However, previous research solely focused on the customer lifetimevalueofthenewlyreferredcustomersanddoesnotlookatthe social network characteristics. A study by Kumar et al. (2010) argues that we shouldconsider two parts of customer value, namelycustomer lifetimevalueandcustomerreferralvalue. Thelattercanbeconceived as a customer’s potential to grow the network through referrals. Early work by Granovetter (1973) highlights the importance of weak social connections, like acquaintances, in a network due to their position as bridges, connecting diﬀerent communities. Extending this knowledge to customer referral programs, we can argue that referrals over weak links are powerful for accessing new communities. In this study, we investigatetheeﬀectofreferralsandthetiestrengthbetweentheexistingandpotentialcustomerontheresultinggrowthofthenetwork. The ﬁnding of this study are particularly useful for start-ups or marketing campaigns aiming to grow the customer base.