ShivaniEarlier consumers used to do word of mouth voluntarily to share information and experience about a brand or a product, thus to leverage the benefit it referral marketing has been designed, promoted, and run by companies to produce high-quality leads and engage loyal customers by rewarding them. Moreover, referral marketing makes use of automated marketing software that further ensures the continuous administration of referral programs.
In this post, we have mentioned 45+ referral marketing statistics that showcase its worth and further shows how it works and influences both businesses and consumers, and much more
# Referral Marketing Statistics that shows how much people trust referrals
(Source: Annex Cloud)
1) 92% of consumers believe referrals from somebody they know.
2) Social media posts posted by friends influence the buying decisions of 83% of US online shoppers.
3) 75% of Instagram users will purchase or tell a friend when they get stimulated by a post.
4) Customers referred by a friend are 4x more inclined to buy a product.
5) Whenever existing customers refer to others, it leads to a 37% higher retention rate.
6) B2B organisations with referrals encounter a 70% higher conversion rate.
7) Referred customers’ lifetime value is 16% more than non-referred customers.
8) Referral leads own a 30% higher conversion rate than leads from any other channel.
9) Referrals account for around 65% of new deals of the company.
10) As per referral marketing stats, only 33% of customers consider online advertisements.
11) 59% of US customers believe offline references while 49% think online word-of-mouth is highly convincing.
12) Customers believe their friends’ recommendations seven times more than traditional advertising.
13) While thinking about a product for purchasing, 84% of customers trust suggestions from friends, family members, and colleagues.
14) Word of mouth doesn’t apply to positive reviews alone 55% of online customers tell colleagues and family when disappointed with a product or company.
# Word-of-mouth Statistics
(Source: Adweek)
15) The average US citizen states different brand names 60 times per week. 9 out of 10 times that occurs offline.
16) Two-thirds (66%) of brand-related discussions are “often positive.”
17) Only 8% of these discussions are “mostly negative.”
18) Word of mouth influences the purchase decision of 54% of customers. It’s the most powerful psychological driver for purchases.
19) Exceptional customer service will encourage 55% of consumers to promote a company.
20) Friends and family are the top origins of brand awareness for 49% of US shoppers.
Word-of-mouth is a compelling tool, which, if applied correctly, can boost your sales. Referral marketing can help you take your business to another level way quicker than any other marketing campaign! It is so powerful that a single customer’s view can let you reach thousands if not millions of people, as per the online review statistics.
# The Effectiveness of referral campaigns and programs
(Source: Entrepreneur)
21) As per 78% of marketers, referral marketing offers “good” or “excellent” leads.
22) Referral-based marketing can get up to 20,000 new email addresses a month.
23) Referral programs in eCommerce can do wonders for your sales – you can grow your revenue by 10%-20% for conventional products and up to 100% for rising ones.
24) Referred consumers are 5x more inclined to leverage your referral program as compared to non-referred customers.
25) According to referral marketing statistics, 86% of B2B organisations with a referral program Witness growth.
# Importance of customer referrals
(Source: Harvard Business Review)
26) 84% of B2B decision-makers start the buying process with a referral.
27) Customers who got referred by a friend or other customers have a 16% more lifetime value as compared to non-referred ones.
28) According to referral marketing statistics, 14% of buyers who come to a referral page take actions.
29) Word-of-mouth recommendation plays a crucial part in 80% of all B2B and B2C deals.
30) The average referring customer attracts an average of 2.68 people.
Trust is the fundamental pillar of every business. If you can show you are honest and trustworthy, your customers will acknowledge it and tell others about you.
After reading the above referral marketing stats you must have understood the importance of having a referral program in place.
Let’s move forward to learn more about such referral marketing statistics.
# Referral marketing and campaigns
(Source: Wharton University)
31) Referred customers have an 18% lesser churn as compared to customers obtained by other marketing means.
32) Word-of-mouth enhances marketing effectiveness up to 54%.
33) Referred consumers are 4x more likely to refer others to the same business.
34) 67% of US customers are more likely to buy a product that peers or family members shared on social media or email.
35) The most effective techniques for referral advertisement are copy/paste (78.1%), email (17.3%), Facebook (3.9%), and Twitter (0.7%)
In a nutshell – the word-of-mouth reference is the foundation for your company to grow.
That’s why referrals are so important – they spread the information about your brand and help you get potential clients.
# How referrals influence customers’ purchase decisions
(Source: Think with Google)
36) 74% of consumers think word-of-mouth is the main factor behind their purchase decisions.
37) Consumers referred by a friend are 4x more apt to purchase a product.
38) 77% of consumers are more likely to purchase a new product if their friends or family urge it.
39) As per the stats, referred customers hold 37% higher customer retention rate.
40) An offline word-of-mouth impact can boost your sales by at least 500% more than a paid advertising impression.
Usually, people don’t trust companies. What they do believe is other people’s suggestions. Particularly close ones. As you can see from the statistics that are mentioned above – a referred customer is more worthwhile than a customer acquired through any other marketing means.
# Referral revenue, rates, and their impact on sales
(Source: Campaign Monitor)
41) Referred customers can boost your profits by at least 16%.
42) The average referral rate across every industry is approx 2.3%. The maximum referral rates are for electronic devices and gadgets – 3.4%.
43) According to referral marketing statistics, referred customers can increase your profit margin by 25%.
44) Customers who found your business through word-of-mouth spend nearly 200% more than other customers.
45) A 10% increase in word-of-mouth recommendations (on and offline) boosts sales by between 0.2%-1.5%.
46) Whenever the marketing department launches a referral program, companies have a 3x higher chance of reaching their revenue goals. Still, only 10% of them designated referral campaign management to that department.
# How to get referrals from existing clients
(Source: Extole)
47) people are 16 times more inclined to share if you own a CTA button on your post-purchase page.
48) When lots of customers sharing your company/products are four times bigger if the sharing experience is on the same page rather than a dedicated landing page
49) Social media prompts around 31% of the website’s traffic.
50) 50% of the affiliate referred traffic drives mobile devices.
These simple tips can let you improve your brand awareness and entice new customers. Join them with a referral incentive program, and you are good to go.
Conclusion
We all know that people talk and you can leverage those discussions for your benefit. Well, now you understand how to make them speak about your business.
Moreover, you know why this matters and what services your business can take advantage of.
So go ahead, use the information you’ve obtained from these referral marketing statistics and make your company stand out using referral marketing software.
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