Viral Loops started as a hunch. We knew that referral marketing works.
Through the years we’ve seen it in action. We didn’t need numbers and statistics; we had our customers.
But there came a time when we suddenly had to show proof to our newly acquired leads and respecting our customers’ data, we couldn’t just give it to everybody just to prove a point.
We had to rely on research made by institutions and organizations. So, we started gathering data.
Every now and then, I used these numbers to support my arguments on various articles, but one of our colleagues noticed that we don’t have them gathered in one place- which beats the whole purpose of gathering them in the first place.
I mean, someone wants solid proof that referral marketing works and we can’t be like: “Here’s proof, fam”.
So this is what this article is all about; it’s an attempt to convince even the biggest skeptics, a place where numbers replace doubt.
Here’s why referral marketing works, in numbers.
- 84% of people from 60 countries say that they trust recommendations from of friends and family.
- 86% of B2B purchasing decisions are based on word of mouth from peers.
- 75% of consumers make decisions or overcome concerns about brands based on conversations from peers. 59% of those people made a recommendation for a brand to a friend or colleague.
- 30% of consumers worldwide say that they make belief-driven purchase decisions more than they did three years ago. 89% of consumers trust information from peers.
- 74% refer to word of mouth as their main point of influence for their path of purpose.
- When it comes to buying a product, the most trusted advice seems to come from real-life experiences.
- B2B buyers are increasingly turning to social networks to not only share information with each other but to give each other advice.
- 43% of customers spending more money at brands they’re loyal to.
Referral Marketing facts.
- 52.2% of US small businesses say that referrals is the most successful marketing tool for them.
- Referrals are the 2nd best revenue source for small businesses in the US.
- Referrals from friends are the last point on the purchase path for Millennials.
- Brand advocates are 50% more likely to influence a purchase.
- 79% of IT buyers while considering a specific vendor, consume their content based of referrals from peers.
- Brand advocates are 70% more likely to be seen as a good source of information by people.
- Referred customers are proved to create larger profit margins than other customers.
- Referred customers have a 37% higher probability to make another purchase.
- Referral is by far the highest acquisition channel for conversion rate (almost 4x the average.).
- 43% of marketers using referrals, acquire more than 35 percent of their new customers with it.
- Millennials won’t buy without input from others.
- 1 offline word of mouth impression drives at least 5 times more sales than a paid advertising impression.
- The lifetime value of referred customers, measured over a six-year horizon, was 16 % higher, on average, than that of non-referred customers.
- 84% of American say that an exclusive offer would make them buy from a specific brand.
- Non-cash referral incentives are 24% more effective for boosting the performance of a referral campaign.
- 91% of Americans would share an exclusive offer with their friends/family.
- 47% of consumers feel excited when they receive a special offer.
- 51% of Americans say they would prefer “winning” a special offer through a loyalty program accessible to everyone.
- 94% of Americans would take advantage of an exclusive offer provided by a brand that the brand would not typically offer the general public.
Cases that referral marketing worked.
Before you go.
Although I think that the research presented above is enough to convince anyone about the power of referral marketing and word of mouth, I will make sure to update regularly.
The platforms may change, but customer behavior seems to remain the same throughout the years, giving a “wink” to those you are utilizing referral marketing.