The Impact of Peer-Influence: How Does Social Network Endorsement Affect Nonprofits and For-Profit Companies?

Abstract

ABSTRACT Does seeing a friend supporting a nonprofit organization on social media affect one’s subsequent behavior on social media? How is it different from seeing a friend supporting a luxury or utilitarian company on social media? In three experiments, we answer these questions by examining the differential influences of peer endorsement types (i.e., Facebook vs. offline social engagement) on one’s subsequent social behavior on Facebook. Experiments 1, 2, and 3 show that for a nonprofit organization, peer-influence is more beneficial when encountered in an offline social engagement (e.g., wearing a cause pin as a result of donation) than viewed on Facebook. However, for a utilitarian company, peer-influence is more beneficial when it happens on Facebook than offline social engagement. For luxury companies, there is no differential effect of peer-influence on Facebook or face-to-face. Drawing on costly signaling theory, Experiment 2 demonstrates that perceived altruism is the underlying mechanism for the positive effect of offline social engagement for nonprofit organizations. Experiment 3 introduces the self-company connection as the boundary condition and shows that the positive effect of peers’ offline social endorsement for nonprofits (and Facebook endorsement for utilitarian companies) only emerges when the self-company connection to the nonprofits is low.