Does the source matter? How referral channels and personal communication tools affect consumers' referral propensity

Abstract

Many companies are using social sharing buttons to make it easier for consumers to refer a website or app to other potential consumers. Although these buttons are ubiquitous online, it remains unclear whether consumer referral propensity (i.e. the likelihood of consumers referring other consumers) varies across the channels through which consumers arrive at the website. In particular, we test whether referral propensity is higher for consumers themselves acquired through social referrals and compare them with consumers accessing the website through other commonly used channels, such as search engines and online advertisements. In addition, we examine whether the communication tool (i.e. social networking websites or instant messaging clients) through which the referral is transmitted affects consumers' referral decisions. Our results indicate that consumers acquired through social referrals are more likely to make a referral and that the communication tools do not differ in their influence on consumers' referral propensity.