Managing word of mouth: the referral incentive programme that backfired
Publication date: 1 January 2011
Abstract
Subject area
Market development; market analysis; customer incentive programmes and segmentation.
Study level/applicability
Undergraduate Business and Management, MBA/MA Management.
Case overview
The Singapore subsidiary of AHL Insurance Corporation (AHL) was trying to expand its customer base through a “recommend-a-friend” programme. Ideally, the incentives would encourage the top tier customers to refer more friends to help AHL further penetrate the market and expand its customer base. Instead, the programme worked the reverse on these customers and referrals from “Apostles” fell. Ray Stevenson had to find out why this was so and think of a way to rectify the problem.
Expected learning outcomes
This case will enable students to analyse a business decision which ultimately proved unsuccessful to the point of adverse market reaction. Students will examine the reasons for this poor market perception; conduct analysis of field test data and provide managerial conclusions and recommendations identifying the correct course of action.
Supplementary materials
Teaching notes.
Keywords
Acknowledgements
This case is based on in-depth qualitative interviews on referral programs in general, and the observations from those interviews were translated into the insurance context for the purpose of illustrating people's responses to referral programs.
Citation
Chew, P. and Wirtz, J. (2011), "Managing word of mouth: the referral incentive programme that backfired", , Vol. 1 No. 1. https://doi.org/10.1108/20450621111110519
Publisher
:Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited