Business Mating Online: How Online Referrals Influence Supplier Selection? An Abstract

Abstract

In the B2B context, a corporate website is one of the most prevalent sources of information regarding a company, especially for buyers who seek a new supplier (Long et al., 2007). Corporate websites can communicate the firm’s capabilities and thus facilitate a credible reputation, signal a relevant portfolio of partners, and attract partners from specific industries (Tóth et al., 2015). Corporate online referral (COR) is defined as a jointly created B2B marketing communication tool between receiver and the referral provider that includes partner logos, testimonials, and case studies. COR is a “boundary object” (Karsten et al., 2001) because it facilitates interfirm collaboration by creating mutual understanding between companies. CORs are relevant in their mediating role to convince potential clients about the corporate ability of a firm (Jalkala & Salminen 2009), influence customer engagement behaviors positively (Doorn et al., 2010), and support new customer acquisition (Libai et al., 2010). Drawing on the evaluation of referral programs of Ryn and Feick (2007), COR is especially useful for SMEs. While a range of CORs is customary to appear on corporate websites, little guidance exists for the best practices related to the most successful COR design (Hada et al., 2014; Kumar et al., 2010). Similarly, little is known about what referrals (e.g., content, source) are attractive for different clients with different needs. In order to address these gaps, the purpose of the current study is to explore ways in which suppliers can increase their online attractiveness in the eyes of potential SME buyers, with strategic use of CORs on company websites. Considering the importance of CORs to firm performance and a lack of empirical research facilitating the most successful COR deployment, in the current study we aim to explore: (1) aspects of referrals that make them attractive in buyers’ view, (2) referral-related factors that may contribute to perceived (mis)fit between a buyer and a supplier, and (3) ways in which online referrals may contribute to the evaluation of a potential supplier as suitable for a business relationship. Adopting the critical incident technique (CIT) method, we performed semi-structured interviews with ten SME executives. The interviews elicited recent (and hypothetical) instances of successful/unsuccessful supplier selection experiences. Our findings reveal that CORs are important, especially in the case of services and where connections between buyer and supplier were absent. Advantages included credibility and assurance of a service. The data revealed three core themes associated with COR. First, referrals were seen as a form of risk reduction device. Second, referrals appeared to play a role in the assessment of potential (mis)fit between partners. Third, concerns about the trustworthiness of referrals emerged as important based on negative prior experiences. We aim to contribute to the referral marketing and customer engagement literature, using the relational view of the firm (Dyer & Singh, 1998) informed by the “boundary objects” stream as theoretical lenses.