Merchandising/Marketing/Retailing: Branding

A Brand’s Referral of Another Brand: Does it Work?

Authors: Daeun Chloe Shin (North Carolina State University) , Lori Rothenberg (North Carolina State University)

Abstract

Online startup brands’ primary, if not the only, sales channel is their online stores. Operating primarily online can be limited in acquiring new customers. In an emerging low-cost marketing partnership, a brand inserts another brand’s promotional messages in its marketing emails. This is akin to a brand’s referral of another brand. The current study’s objective was to test the effectiveness of this strategy, relative to social media marketing and a consumer referral by a close friend. This study employed a one-way between-subjects design with four brand promotion conditions: a referral by a close friend, a referral by a high-loyalty brand, a referral by a low-loyalty brand, and social media marketing. Results showed that a high-loyalty brand’s referral can be as effective as a close friend’s referral, and even a low-loyalty brand’s referral can be as effective as social media marketing. This indicates that brands’ referrals can be an effective, yet low-cost marketing strategy.

Keywords: Referrals, Word-of-mouth, Email marketing communication, Customer acquisition strategy, SMEs, Digital startups

How to Cite: Shin, D. C. & Rothenberg, L. (2020) “A Brand’s Referral of Another Brand: Does it Work?”, International Textile and Apparel Association Annual Conference Proceedings. 77(1). doi: https://doi.org/10.31274/itaa.11738