Examining the role of monetary incentives and tie strength in mediating satisfaction and word of mouth in multilevel marketing companies: an entrepreneurial marketing perspective

Purpose This study aims to explore the mediating roles of monetary incentives and tie strength in the relationship between satisfaction and the word-of-mouth (WOM) process within a multilevel marketing (MLM) organization. Design/methodology/approach This study conducted a personal survey with 240 distributors from a MLM company. The conceptual framework was tested using structural equation modeling. Findings These empirical findings substantiate the vital role of satisfaction in generating WOM. Moreover, monetary incentives and a strong interpersonal connection between the information provider and recipient (tie strength) serve as pivotal drivers in initiating the WOM process. These factors were found to mediate the relationship between satisfaction and WOM, underscoring their strategic importance. Research limitations/implications This research focuses on a single MLM company, limiting its generalizability to non-MLM or other companies. This area holds promise for future research. Practical implications MLM entrepreneurs should prioritize offering high-quality products, well-designed monetary incentives, and fostering strong relationships with clients to activate the WOM process. Originality/value The results of this study indicate that satisfaction plays a significant role in WOM. In addition, this study emphasizes the importance of a well-structured compensation plan (monetary incentives) and the need for MLM entrepreneurs to strengthen relationships with customers to enhance the likelihood of WOM activation.