Why Rejected Recommendations Hurt Future Sales
Many businesses rely on customer referrals to spread the word about their products, but research shows this tactic can backfire in unexpected ways.
A joint study by Oregon State University and Ivey Business School revealed that when customers recommend a product and it’s rejected, they start doubting their own judgement, undermine their confidence in the product and reduce their likelihood of purchasing it again. Across seven experiments, the following findings emerged:
People were 16 times more likely to change their initial choice of a pen after their recommendation was declined.
4 times more likely to change their initial choice of a virtual roller-coaster ride (to another entertainment option) when their suggestion was turned down.
26% less likely to buy a travel mug again after their recommendation to a friend was rejected. (They also thought the quality of their initial choice was 8% lower).
These results were even stronger when recommendations were made to close friends or family. When someone important to us rejects our advice, it strikes at the heart of our confidence. Customers begin to second-guess their original choice, leading them to explore other options.
How to Improve Your Referral Strategy
The solution isn’t to avoid referrals altogether, but to take a more thoughtful approach to how and to whom your customers make their recommendations.
Here are a few practical steps you can take:
Target Recommendations Carefully: Encourage your customers to recommend your product to people who will appreciate it - those with similar interests, tastes, or budgets. For example, if you sell specialist coffee, try saying, “Invite your friend who appreciates a fancy coffee just as much as you.”
Remind Customers Why They Love Your Product: Reinforce these key selling points when encouraging them to share. For example “Our travel mugs keep drinks warm for 12 hours – perfect for long commutes!” By doing this, even if the recommendation isn’t taken up, your customer will feel reassured in their choice.
Simplify the Process: Make it as easy as possible for customers to share your product. Offer pre-filled forms or easy-to-follow templates.
By doing so, you’ll create a referral programme that works with your customers’ confidence, rather than against it.
Research: The research was conducted by Matthew J. Hall (Oregon State University), Jamie Hyodo (Western University), and Kirk Kristofferson (Ivey Business School). How rejected recommendations shape recommenders' future product intentions. Journal of Consumer Psychology (December 2023)
Notes: 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.
