Every business owner wants to see their business grow. They want happy customers with high customer lifetime value.
So they turn to you as their digital marketer to come up with a solution.
After much thought, you’re certain that a traditional marketing strategy wouldn't cut it.
You’re faced with a small dilemma: what options do you have if you’re going to turn things around?
That’s where referral marketing (aka word-of-mouth marketing) comes into play.
This form of advertising can help you get:
Higher conversion rates More loyal customers Awareness for your new products New leads
That’s what they say about every marketing strategy. How’s this one any different?”
Well, that’s why we’ve decided to show you 50 referral statistics that prove how powerful referral marketing is.
Here are five key stats to set the ball rolling:
Let’s get started!
General Referral Marketing Statistics
Referral marketing is a marketing strategy that helps brands
leverage their existing customers by reaching out to family members or friends so the business can grow .
It’s a cost-effective way of expanding your business that also results in:
Engagement A higher retention rate Referral leads Satisfied customers Awareness
Referral marketing should be a part of your marketing efforts and here’s why:
According to 84% of B2B decision-makers, the B2B buying process starts with a referral. (Source: Influitive) People are 90% more likely to trust and buy from a brand recommended by a friend. (Source: Nielsen) 55% of B2Bs with referral programs believe that their sales efforts are “highly effective,” compared to 35% of companies without referral programs. (Source: Influitive) Only 30% of B2B companies have a formal referral program in place. (Source: Influitive) Peer recommendations outweigh blogs and online media when it comes to researching software options. (Source: Capterra) 91% of customers say they’d give referrals, but only 11% of salespeople ask for them. (Source: Dale Carnegie) 86% of B2B companies with a referral program experience growth. (Source: Influitive) There are 3.3 billion brand mentions in 2.4 billion brand-related conversations every day in the US. (Source: Adweek) Referred customers have a 59% higher lifetime value. (Source: Influitive)
…and on we go!
Referral Marketing and Consumer Statistics
We’ve shown you proof that referral marketing programs work.
Now, you’re probably wondering whether your consumers will be open to sharing your product with their network face-to-face or on social media.
That sound like you?
Well, generally speaking, humans are social creatures. We want to share our good and bad experiences.
So yes, there’s a good chance
your customers will be open to referring.
Don’t just take our word for it—here are some amazing statistics that are sure to convince you:
84% of people from 58 countries say that they trust recommendations from friends and family. (Source: Nielsen) 86% of B2B purchasing decisions are based on word-of-mouth from peers. (Source: Blanc and Otus) 75% of consumers make decisions or overcome concerns about brands based on conversations with peers. 59% of those people recommended a brand to a friend or colleague. (Source: Edelman) 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. (Source: Edelman) 74% refer to word-of-mouth as their main point of influence for their path of purpose. (Source: Adweek) When it comes to buying a product, the most trusted advice seems to come from real-life experiences. (Source: Reevo) B2B buyers are increasingly turning to social networks to not only share information but to give each other advice. (Source: Blanc and Otus) 88% trust online reviews as much as they trust reviews from their personal contacts. (Source: Bright Local) 92% of buyers trust recommendations and suggestions from friends and family more than advertising. (Source: Nielsen) 28% of millennials say they won’t try a product if their friends don’t approve of it. (Source: Extole) Millennials won’t buy without input from others. (Source: Bazaarvoice) 49% of US consumers say friends and family are their top sources of brand awareness. (Source: Jack Morton) 83% of consumers are willing to refer after a positive experience—yet only 29% actually do. (Source: Texas Tech University) Word-of-mouth drives sales for B2B tech companies. (Source: Blanc and Otus)
See why we said they’ll be willing?
Referral Marketing Effectiveness Statistics
And then, there’s also the matter of efficiency.
You want to be certain that investing in a customer referral program will be profitable for your business.
We want that for you too and that’s why we’ve added statistics showing you how effective referral marketing can be.
52.2% of US small businesses say that referrals are the most successful marketing tool for them. (Source: Insider Intelligence) Referrals are the 2nd best revenue source for small businesses in the US. (Source: Insider Intelligence) Brand advocates are 70% more likely to be considered a good source of information. (Source: G2) Referred customers are more loyal. (Source: Journal of Marketing) 79% of IT buyers while considering a specific vendor, consume their content based on referrals from peers. (Source: Spiceworks) Brand advocates are 70% more likely to be seen as a good source of information by people. (Source: Marketing Charts) Referred customers are proven to create larger profit margins than other customers. (Source: Journal of Marketing) Referred customers have a 37% higher probability of making another purchase. (Source: Deloitte) Referral is by far the highest acquisition channel for conversion rate (almost 4x the average). (Source: Marketo) 43% of marketers using referrals acquire more than 35 percent of their new customers with it. (Source: Gigaom Research) Offline word-of-mouth impression drives at least 5 times more sales than a paid advertising impression. (Source: Cision) The lifetime value of referred customers, measured over a six-year horizon, was 16% higher, on average, than that of non-referred customers. (Source: Wharton School of Business) According to 78% of marketers, referral marketing produces “good” or “excellent” leads. (Source: Software Advice) The churn rate of referred customers is 18% lower than other marketing channels (Source: Wharton School of Business) Word-of-mouth generates more than twice the sales of paid advertising in some industries (Source: McKinsey & Co) Advocacy is among the top influences of new auto purchases, with over a third of new customers saying they were influenced by recommendations from friends. (Source: Foresight) You can expect at least 16% more in profits from referred customers. (Source: Harvard Business Review) 60% of marketers say that referral programs generate a high volume of leads. (Source: Forbes) 85% of small businesses say word-of-mouth referrals are the number one way that new prospects find out about them. (Source: Small Business Trends) 82% of small business owners cite referrals as the primary source of new business. (Source: Constant Contact)
We know you want us to continue, but let’s pause here so we can show you some other interesting facts.
Let’s go on!
Reward and Incentive Statistics
If you have a great product and excellent customer service, this can inspire people to share your product with their network.
Throwing rewards or incentives in the mix will get you even better results.
Rewards are at the center of referral marketing campaigns.
Here are some statistics that support this:
84% of Americans say that an exclusive offer would make them buy from a specific brand. (Source: Kelton & SheerID) 82% of consumers say great offers will increase the frequency at which they shop with a brand. (Source: Kelton & SheerID) 91% of Americans would share an exclusive offer with their friends/family. (Source: Kelton & SheerID) 47% of consumers feel excited when they receive a special offer. (Source: Kelton & SheerID) 51% of Americans say they would prefer “winning” a special offer through a loyalty program accessible to everyone. (Source: Kelton & SheerID) 94% of Americans would take advantage of an exclusive offer provided by a brand that the brand would not typically offer to the general public. (Source: Kelto & SheerID) Offering a reward increases referral likelihood, but the size of the reward does not matter. (Source: American Marketing Association)
Alright, let’s wrap this up!
Before You Go
That’s all of the 50 referral marketing statistics as promised 🙃.
We put all of these together for one reason—to show you from different angles that referral marketing works.
And we’re pretty sure it did a good job convincing you.
Ready to create a referral marketing campaign for your business?
By all means,
book a demo with us so we can guide you on how to get started.
See you soon!