Referral Marketing Statistics
Referral marketing statistics highlight the effectiveness and benefits of referral marketing. They typically show that referral marketing has a high conversion rate, can generate more leads and customers, and can lead to higher customer lifetime value and retention rates.
Referral marketing statistics also often demonstrate that customers acquired through referrals are more loyal and valuable, and that referral marketing can have a higher return on investment (ROI) than other marketing channels. Overall, good referral marketing statistics show that referral marketing can be a powerful tool for businesses looking to grow and expand their customer base.
Referrals have high conversion rates...
“Referred leads are 2x more likely to convert than leads acquired through paid marketing channels.”
Source : Referral factory survey data (2022)
Referrals reduce churn...
“Customers acquired through referrals have a 37% higher retention rate.”
Source : DELOITTE data
The buying process starts with a referral...
“84% of B2B decision-makers start the buying process with a referral.”
Source : salesforce data
Referrals are quality customers...
“Referred customers have a 16% higher lifetime value than non-referred customers.”
Source : Wharton School of Business
Referred customers are more valuable...
"A referred customer is about 25% more valuable than a comparable non-referred customer. Taking into account differences in acquisition costs, the difference in customer value is almost 35%."
Consumers trust their friends...
"With a data for more than 28,000 Internet respondents in 56 countries, it has been seen that 92% of consumers trust recommendations from friends and family above all other forms of advertising."
Source : Going Viral: The Epidemiological Strategy of Referral Marketing, Sayantari Ghosha, 2018.
Great offers drive referrals...
“The highest performing referral marketing programs have a great offer - this is because people have more motivation to refer their friends is their friends will get a benefit too.“
Source : Kirsty Sharman - founder of referral factory (referral program software)
Referrals drive discovery...
“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
People choose service providers based on recommendations...
"Today, consumers choose nearly 50% of service-providing businesses because of a recommendation."
source: Doug Plesh 2003 Referral marketing--having others work for you.
Viral marketing is driven by referrals...
"Friend recommendations are at the heart of viral marketing; we observed that almost 76% customers usually go for a product if many friends recommend it."
Source : Going Viral: The Epidemiological Strategy of Referral Marketing, Sayantari Ghosha, 2018.
If you want to get referrals... just ask!
“On average, around 76% of customers are willing to refer a friend if they have had a good experience with your business”
Source : Referral factory data (2022 survey)
Other marketers are doing it...
“78% of marketers agree word of mouth is the ultimate strategy to get more leads”
Source : Get The Referral
Referrals are the best leads...
“82% of upper management claim word of mouth creates the best leads”
Source : GET THE REFERRAL
Referrals drive small business growth...
“Small businesses get 60% of their business through referrals.”
Source : Get The Referral
Word of mouth drives influence...
“74% refer to word-of-mouth as their main point of influence for their path of purpose.”
Source : adweek
Your customers control your future...
“75% of consumers make decisions or overcome concerns about brands based on conversations with peers.”
Source : edelman
Launching a referral program works!
“43% of marketers using referrals acquire more than 35 percent of their new customers with it.”
Source : gigaom research
The simplest way to increase your lead volume in 2023...
“60% of marketers say that referral programs generate a high volume of leads.”
Source : forbes
Referral Marketing Statistics Showcase A New Way To Grow
Well, that's where referral marketing, also known as word-of-mouth marketing, comes in as a game-changer. Referral marketing can offer you numerous benefits such as higher conversion rates, increased customer loyalty, greater awareness for your new products, and an influx of new referred HIGH QUALITY leads into your referral software.
Above you can find a range of referral marketing statistics that prove just how powerful referral marketing is. You’ll see from these referral marketing statistics that by using referral software as part of your marketing stack - you’ll be able to acquire new customers for less. These new referred customers will also spend more and stay longer as they come into your sales pipeline already trusting your business - because their friend is a customer of yours too :)
Our top referral marketing statistic that we have printed on the walls in our office is all about the quality of leads that come in when you get referrals. On average we see that leads acquired through a customer referral program convert two times higher than leads acquired through paid advertising channel which is insane! Simply by launching a referral program and asking your customers to tell their friends about your business, you can acquire new leads that are 2x more likely to convert. Any business that isn’t including referral marketing statistics in their 2024 strategy is going to get left behind, it’s that simple.
Use Referral Statistics To Educate Your Boss
Referral Factory has collected the most valuable and most true referral marketing statistics around. These aren’t the same referral marketing statistics you’ll see all over the internet they are from verified academic resources and our own data collection (after running thousands of referral marketing campaigns and analysing the results and referral marketing ROI).
Here are some referral marketing statistics that can help educate your boss on the effectiveness of this strategy:
Doug Plesh wrote in his 2003 book, Referral marketing-having others work for you, that "Today, consumers choose nearly 50% of service-providing businesses because of a recommendation."
Referral marketing is also cost-effective. In fact, according to a study by Wharton School of Business, referred customers have a 25% higher profit margin compared to customers acquired through other channels.
A popular podcast called Get The Referral said in 2021 that: “78% of marketers agree word of mouth is the ultimate strategy to get more leads”
Our own founder, Kirsty Sharman, released this data in 2022 after analysing over 1000 referral marketing programs: “Referred leads are 2x more likely to convert than leads acquired through paid marketing channels.”
These statistics clearly show that referral marketing can have a significant impact on a business's growth and profitability. By leveraging the power of word-of-mouth marketing, businesses can increase customer loyalty, generate more leads, and ultimately drive revenue. If you show your boss these referral marketing statistics it will be clear to them that you need time, budget, and resource to focus on launching a referral program in 2023.