🎓 When referrals backfire

People were 26% less likely to buy a product again when they recommended it to a friend but that friend didn’t buy it.                                                                                                                                                                                                                                                                                                                                                                                                                 April 02, 2024 | [Read Online]( When referrals backfire People were 26% less likely to buy a product again when they recommended it to a friend but that friend didn’t buy it. [Thomas McKinlay]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Ariyh&body=When%20referrals%20backfire%3A%20People%20were%2026%25%20less%20likely%20to%20buy%20a%20product%20again%20when%20they%20recommended%20it%20to%20a%20friend%20but%20that%20friend%20didn%E2%80%99t%20buy%20it.%0A%0Ahttps%3A%2F%2Ftips.ariyh.com%2Fp%2Fwhen-referrals-backfire) New to [Ariyh](? This is a 3min practical summary of a scientific study 🎓 Join 26,825 marketers who use science, not flawed opinions 📈 [Subscribe here]( Today’s insight is brought to you by… [Tom’s Marketing Ideas]( [Join 10,900+ marketers]( learning great ideas (from successful startups) in just 3 minutes a week. Marketing ideas like: - [Tell your audience NOT to do something]( - [Leverage the ‘Oddly Satisfying’ trend]( - [Use the most powerful CTA on your homepage]( You’ll find 100% tested tactics — and 0% fluff. Only TL;DR guides that can help you get your product out there & grow your business. Ready to access 120+ marketing ideas? 👇 [It’s completely free]( Want to sponsor Ariyh? [Here’s all you need to know](. 📝 Intro You run a successful skincare online store. You encourage your clients to refer your products to their friends to boost sales and exposure. You even offer an altruistic referral program (because you know [they are more effective than selfish ones]() that gives your customers’ friends $10 credit. While happy and loyal customers sing your praise, you notice some of them never return to shop again. What’s going on? P.S.: [Pre-fill your referral messages](. Messages that say the sender has bought the product boost conversions by 11%. Want to access hundreds more insights like these? [Explore Ariyh insights here](. People are less likely to buy a product if they recommend it but their friend doesn’t buy it Topics: Referrals For: B2C Research date: December 2023 Universities: Oregon State University, Western University & Ivey Business School. Western University 📈 Recommendation Be careful when asking customers to recommend your product. Encourage them to recommend it only to friends who are likely to buy it. For example, remind who it’s for (e.g. recommend Ariyh to other evidence-based marketers). If they recommend it to someone who won’t follow the recommendation (e.g. because the product is not a good fit for them), it may backfire and you can lose your customer. 🎓 Findings - When people make a recommendation that gets rejected, they will be less likely to purchase the product again and will be more likely to choose a different one. - Scientists ran 7 experiments and found that when people learned their recommendation was rejected, they were: - 15.7 times more likely to change their initial choice of a pen (34.9% changed their mind vs 2.1%) - 4.3 times more likely to change their initial choice of a virtual roller-coaster ride (to another entertainment option) - Were 25.5% less likely to say they would buy a travel mug again after their recommendation to a friend was rejected. They also thought their level of expertise was 22.8% lower and the quality of their initial choice was 7.9% lower - The effect: - Is stronger when people recommend to someone close to them (e.g. family member vs an acquaintance) - Disappears - When people choose a different option (e.g. shirt color, candle scent, ice cream flavor) of the recommended product, or a similar quality one - When we don’t know that the person did not follow our recommendation 🧠Why it works - We offer recommendations because we think our advice and opinions are sound. - When our recommendation is rejected, we question if we are knowledgeable enough and whether [our initial evaluation]( and choices were correct, and our confidence suffers. - So we [switch to alternative products]( and try new options to increase [our expertise]( again. With people close to us, a rejection creates an even stronger feeling of [self-doubt]( because our sense of self is strongly connected with their opinions. 🎓 Ariyh: turning 3 hours research papers into 3 minute insights On average, it takes 3 hours to read a research paper and truly understand its implications. Nobody has time for that. That’s why I and my team of marketing PhDs (from top universities like ESADE and Monash) relentlessly summarize papers into 3 minute insights for you. Over the past 3+ years we’ve covered over 4,000 pages of the best, most useful research in marketing. And now it’s all easily accessible for you on [Ariyh’s new insights platform](. [Browse all Ariyh insights]( ✋ Limitations - The effect’s strength might vary with one’s level of product expertise (e.g. an experienced sommelier probably won’t change their opinion if someone with no interest in wine does not like a particular kind). - The researchers tested physical, digital, and experiential products (e.g. pens, virtual roller coaster rides, and hike trail) in face-to-face settings where people immediately knew that their recommendation was rejected. In online settings (e.g. sending a text), we may not get to know whether the recommendation is rejected, so the effect may be weaker. - The research analyzed 1 to 1 recommendations. When recommending to a group (e.g. a workshop host recommending a book to the attendees), the effects and dynamics may differ. - The effects of paid referrals with rewards (e.g. invite a friend and get $20) were not tested. It’s unclear whether the effect would change because the motivation for inviting a friend changes. 🏢 Companies using this - Most companies encourage their customers to recommend their products with generic referral programs. - Specific guidelines on whom to recommend to or who could benefit the most are rare. - It does not seem that companies are aware of the risks of encouraging generic recommendations. Goodreads simply prompts you to invite friends. The copy could be improved by better defining the audience: “Invite friends who enjoy reading as much as you do”. ⚡ Steps to implement - Encourage customers to recommend your products to those with similar tastes (e.g. “Invite a friend who likes jogging too”). This will reduce the chances of the recommendation being rejected. - When prompting customers to give a recommendation, provide [a prefilled form]( to make it easier to share. [Use simple language]( - the message will be clearer. - Highlight your product’s preferential qualities (e.g. “Our bags come in 15 colors. Your choice of lilac is great for spring!”) to remind your existing customers why they liked it.  - This will make them stick to their choice even if they make a recommendation that gets rejected. 🔍 Study type Lab and online experiments 📖 Research [How rejected recommendations shape recommenders' future product intentions](. Journal of Consumer Psychology (December 2023) 🏫 Researchers - [Matthew J. Hall]( Oregon State University - [Jamie Hyodo]( Western University - [Kirk Kristofferson](. Ivey Business School. Western University Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s [how science works](). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely. 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