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Everyone knows how fast word of mouth travels. We wanted to lay all the facts out there for you. You know how awesome word of mouth and referral marketing is. This is why we put together a list of referral marketing statistics to show you first hand.

What’s interesting is that word of mouth and referral marketing go hand in hand. In fact, referral marketing relies on word of mouth to be successful. Word of mouth is the foundation of successful referrals, and for a very good reason. It just works.

You can probably attest that you have done your fair share of referring. We’ve all told a friend where to get their hair cut, their oil changed, and where to eat. This is how word of mouth marketing works, which happens organically. You simply share a business because you had a good experience. Then the friend you send becomes your referral, even if there is not a formal customer referral program.

Referral Marketing Platforms Put It In Motion

Referral Marketing put extra metrics in place that encourages happy customers to share. This can happen with or without an incentive. The incentive aspect increases customers to share but is not always needed. This is the exact reason why we wanted to show you referral marketing statistics. You may be astonished by the facts.

Alright, let’s take a look at why referral marketing is such a great way to boost lead acquisition. If you aren’t running a referral program yet, these facts may make you reconsider. If you are impressed perhaps you should consider referral marketing software – that way you can easily manage your referral program and easily track its analytics.

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Alas, we’re on to the stats!

Why referral marketing is powerful

These are the statistics you’ll find used the most when discussing referral marketing. In fact, most of the top blogs on referral marketing and word of mouth have these quotes, word for word, written somewhere on their blog.

It’s pretty evident that word of mouth marketing plays a huge role in the referral market. But, if you need any reassurance as to why word of mouth marketing is so important, you’ll find it here.

  1. 84% of people trust recommendations from people they know. Making them the most influential form of advertising. Nielson
  2. B2B buyers are increasingly turning to social networks to not only share information with each other but to give each other advice.  Blanc & Otus and G2 Crowd Study
  3. 70% of consumers give more credibility to consumer-created reviews and peer recommendations than professionally-written content. Reevo
  4. More than half of respondents (58 percent) share positive experiences and seek advice from friends and family when they talk about brands on social media. SDL

Proof that it works

How do we know if referral marketing works? Well, it’s been proven time and time again.

  1. People are 4 times more likely to buy when referred by a friend. Nielsen
  2. B2B buyers are increasingly turning to social networks to not only share information with each other but to give each other advice. Blanc & Otus and G2 Crowd Study
  3. Friend referrals are the most successful marketing tool used by US small businesses. eMarketer
  4. More than half of the respondents in one study (58 percent) share positive experiences and seek advice from friends and family when they talk about brands on social media. SDL
  5. Referred customers also tend to be more loyal than other customers, and this difference persists over time. American Marketing Association
  6. Friend referrals are the most successful marketing tool used by US small businesses. eMarketer
  7. Brand advocates are 50% more likely to influence a purchase. Source: Marketing Charts

Who trusts referral marketing

“In sales, a referral is the key to the door of resistance,” said Bo Bennett. Referral marketing simply works because a referral is usually from a trusted source. A friend wouldn’t suggest a bad business to their friend (if they did they probably wouldn’t be friends for long). Friends want to be seen as a reliable (and in the ‘know’) to their friends.

As said by Mark Zuckerberg, “People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral is the holy grail of advertising”.

  1. A whopping 97% of IT professionals say they rely on peer recommendations and ratings/reviews during the buying cycle. How to Win Friends and Influence IT Pros, Spiceworks
  2. 89% of millennial women trust recommendations from a friend, peer, or family member more than recommendations from a brand (11%). Changing The Face Of Modern Consumerism – Mom Central
  3. 84% of people trust recommendations from people they know. Making them the most influential form of advertising. Nielsen
  4. Advocates’ recommendations are the most trusted source across all age groups: Millennials, Gen X, baby boomers, and mature adults. Deloitte
  5. Referred customers are about 18% more likely to stay rather than other customers. Straight Talk about Word-of-mouth Marketing – Wharton
  6. When it comes closer to a decision to purchase a particular product, Millennials turn to online reviews to see how they map to their friends’ and parents’ recommendations. Mom Central
  7. 88% trust online reviews as much as they trust reviews from their personal contacts. BrightLocal
  8. Millennials are 3X more likely than Baby Boomers to turn to social channels for an opinion on what products to buy. Kelton Research
  9. Advocacy is among the top influences of new auto purchases, with over a third of new auto buyers saying they were influenced by recommendations from friends. Foresight  

Stats on incentives and rewards

You don’t always have to provide an incentive or reward to make referral marketing work. But, it is a huge driving factor in most cases. Many people share because they have been given an opportunity to do so (that they don’t want to miss out on).

  1. A study from the University of Chicago wrote that non-cash incentives are 24% more effective at boosting performance than cash incentives. University of Chicago
  2. 91% of Americans would share an exclusive offer with their friends and family. Kelton
  3. Offering a reward increases referral likelihood, but the size of the reward does not matter. American Marketing Association
  4. A study showed 47% of consumers say receiving an exclusive offer made them feel excited. Other reactions included. Kelton
  5. 94% of Americans would take advantage of an exclusive offer if it was one the brand would not typically offer the general public. Kelton
  6. 51% of Americans eligible for such an exclusive offer would prefer receiving it over a loyalty program accessible to anyone. Kelton

Results from referral marketing

If you still don’t believe it, here are some more referral marketing statistics to help paint a better picture.

  1. Customers referred by other customers have a 37% higher retention rate. Deloitte
  2. A consumer is significantly more likely to buy a product as a result of a recommendation made by a family member than by a stranger. A new way to measure word-of-mouth marketing – McKinsey
  3. Referred customers are about 18% more likely to stay rather than other customers. Straight Talk about Word-of-mouth Marketing – Wharton
  4. 84% of people trust recommendations from people they know. Making them the most influential form of advertising. Nielson
  5. Brand advocates are 50% more likely to influence a purchase. Marketing Charts
  6. Referred-in customers have a 37% higher retention rate than other customers. Deloitte
  7. B2B marketers said the average conversion rate (From generating lead to converting sales) was 11% for referrals. Referrals beat all the other marketing channels by big margins when it came to conversion rates. Marketo
  8. Industry experts and peers are the top 2 resources for buyers to get advice. B2B Buyer’s Survey Report
  9. Customers referred by other customers have a 37% higher retention rate. Deloitte
  10. Advocacy is among the top influences of new auto purchases, with over a third of new auto buyers saying they were influenced by recommendations from friends. Foresight
  11. According to the New York Times, 65% of new business generally comes from referrals. New York Times
  12. In a study done by Gigaom Research, 27% of marketers said they get more than half of their new customers from referral marketing. Gigaom Research

Key Takeaway

There are a ton of reasons why referral marketing programs are awesome. Hopefully, after reading some of these referral stats and referral quotes you realize how referral marketing software can benefit you. There are many options for referral software on the market. Let us know if we can help you start your own referral program!

If you have any good referral stats or quotes, let us know. We’d love to include them in this article.

 

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Posted by Megan Mosley

Megan Mosley is a writer for Referral Rock. You can find her poking around online or tweeting about marketing, small businesses, SEO, or even sharing funny memes. She is addicted to coffee and uses it as a fuel to keep her going through the day.