Referral equity and referral management: The supplier firm's perspective

Mahima Hada, Rajdeep Grewal, Gary L. Lilien

Research output: Chapter in Book/Report/Conference proceedingChapter

6 Scopus citations

Abstract

From the supplier firm's perspective, a referral is a recommendation from A (the referrer) to B (the potential customer) that B should, or should not, purchase from C (the supplier firm). Thus, as referrals are for a specific supplier firm, they should be viewed as part of the supplier firm's marketing and sales activities. We recognize three types of referrals - customer-to-potential customer referrals, horizontal referrals, and supplier-initiated referrals - that have critical roles in a potential customer's purchase decision.We develop the concept of referral equity to capture the net effect of all referrals for a supplier firm in the market. We argue that supplier firms should view referral equity as a resource that has financial value to the firm as it affects the firm's cash flows and profits. We offer strategies firms can use to manage referrals and build their referral equity and suggest a research agenda.

Original languageEnglish (US)
Title of host publicationReview of Marketing Research
EditorsNaresh Malhotra
Pages93-144
Number of pages52
DOIs
StatePublished - Dec 1 2010

Publication series

NameReview of Marketing Research
Volume7
ISSN (Print)1548-6435
ISSN (Electronic)1944-7035

All Science Journal Classification (ASJC) codes

  • Marketing

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    Hada, M., Grewal, R., & Lilien, G. L. (2010). Referral equity and referral management: The supplier firm's perspective. In N. Malhotra (Ed.), Review of Marketing Research (pp. 93-144). (Review of Marketing Research; Vol. 7). https://doi.org/10.1108/S1548-6435(2010)0000007008