Customer Referral Reward-Brand Fit: A Schema Congruity Perspective

Customer referral programs (CRPs) are widely applied as an effective means to stimulate word-of-mouth. While previous research mainly focuses on CRPs impact of acquiring new customers, this study introduces referral programs as a strategic brand management tool. Grounded on Mandler’s (1982) schema congruity theory, we propose that the perceived congruity between a reward and the recommended brand is an essential driver of referral program performance outcomes. The results show that rewards that conform to the image of the recommended brand yield more favorable brand evaluations and positively impact reward attractiveness perceptions. Furthermore, we show that brand evaluations and the perceived attractiveness of the reward fully mediate the effect of congruity on recommendation behavior. Our research extends the literature on judgmental evaluations resulting from schema-based processing and provides novel insights into the design of CRPs.