Customer reference marketing in internationalizing SMEs: a service perspective

Abstract

Purpose: The purpose of this paper is to create a model that compares the effects of product content differentiation and service content differentiation on small- and medium-sized enterprises’ (SMEs) perceived importance of customer reference marketing in foreign markets. Design/methodology/approach: A theoretical model is developed and tested through multiple regression and mediation analysis, on an effective sample of 188 Swedish SMEs. Findings: The results show that foreign market business assignments characterized by differentiated services make companies relatively more dependent on relationship learning and customer reference marketing. By contrast, situations of differentiated product content correlate negatively with customer reference marketing. Practical implications: Reference customers can function as vehicles for international expansion when marketing offerings are complex. The findings imply that in service settings, SMEs need to maintain learning regimes with foreign market customers to effectively use them as references to win new business. Originality/value: The study applies a service perspective to explain the contingencies of customer reference marketing, particularly in international business settings. The study contributes to international small business literature and research focusing on service–firm internationalization by explaining the marketing mechanisms at play in the internationalization of SMEs. In so doing, the findings can enrich relationship and network perspectives of internationalization and add a missing link to studies on networking and internationalization.