What if we told you referral marketing helps you sell better without making people realize you’re selling? A person is more likely to purchase a product their friend recommends rather than buy it because the ad says so. Referral marketing statistics show that sharing product satisfaction with others influences up to half of their shopping decisions.
Referral marketing is a word-of-mouth method that brings great results — it’s a way to stand out with a product or service without making yourself pushy and annoying. If you’re interested in discovering more, we’ve rounded up the most intriguing statistics.
Referral Marketing Stats (Editor’s Choice)
- 93% of consumers trust their friends’ and family’s recommendations above all other forms of advertising.
- Friends’ social media posts influence the purchase decisions of 84% of US customers.
- 78% of the B2B referrals create viable customer leads for the business.
- Referrals through word of mouth affect the purchase decision of 54% of consumers.
- Clients acquired through referrals have a 37% higher retention rate.
- Referral-based sales usually close at 50%–70%.
- 78% of businesses that use social media sites for referrals perform better than others.
- 83% of customers would refer a product they are satisfied with to others.
Referral Statistics — The Success of a Word-to-Mouth Marketing
Referrals are an effective way to engage with customers and have a higher conversion rate. Acquiring new clients, keeping the old ones, and anchoring your brand — you can have it all with good referral marketing.
1. 93% of consumers trust recommendations from friends and family above all other forms of advertising.
(Marketing Charts)
Referral marketing statistics show that 93% of people rely on recommendations from those close to them while making a purchase. In addition, 91% say review sites are another trusted source of information. On the other hand, only 38% find traditional advertising trustworthy.
2. Referred customers are four times more likely to recommend your brand to other people.
(FinancesOnline)
According to referral stats, customers who bought a product through a referral will most likely mention it to others. On top of that, other statistics show that each happy consumer brings about nine referrals to the company.
3. Formalized referral programs result in 86% more revenue growth over two years.
(Connect365)
Luckily, only 30% of companies have a formalized sales referral program. Referral marketing stats say that generating leads with referrals provides a 25% higher customer lifetime value and 30% higher conversion rate.
4. Friends’ social media posts affect the purchase decisions of 84% of US consumers.
(HelpLama, Gartner)
Social media reviews are a vital part of online referral marketing, whether through genuine recommendations or the company’s effort. The content created by companies has almost the same influence on customers’ purchases (83%) as those from family and friends.
In addition, referral marketing statistics reveal that 84% of millennials claim that seeing online content from strangers influences their buying decisions.
5. Referrals through word of mouth influence the purchase decision of 54% of customers.
(Source Referral)
The referrals of satisfied clients affect the buying decisions of more than half of other people. Moreover, people spontaneously praising the brand adds extra credibility. Statistics also show that an average referrer invites an average of 2.68 potential customers.
6. 68% of patients say online reviews are a vital factor behind doctor selection.
(Ruler Analytics, Impact)
Healthcare referral marketing statistics demonstrate the significance of a well-spread word. When people choose a doctor, they want to make sure their health is in good hands, and having negative reviews on a doctor’s website just scares them away.
That’s why managing reviews and displaying the good ones on the website is essential. However, only 33% of businesses and companies collect online reviews.
Importance of Business-to-Business Referrals
Many B2B referral statistics prove how significant referral marketing is for businesses. However, it takes time and careful evaluation for one company to buy from another. Keep reading to see the stats for yourself.
7. 78% of the B2B referrals result in viable customer leads.
(ThinkImpact)
Generating leads is an important segment of every business’s growth plan. Therefore, it’s good to know that referred leads are 30% more likely to convert than any other leads. In addition, more than half of B2B companies with referral programs yield better sales results than companies without them.
8. Referral marketing statistics show that 54% of B2B referrals cost much less than other lead sources.
(ThinkImpact)
Paying a company to generate leads is more costly than creating them via referrals. Other lead-generating methods include organic referrals from satisfied users or offering incentives to customers who refer others to the company.
9. 84% of B2B clients decide to buy the product through a referral.
(ReferralRock)
People often turn to others for advice before making an important decision, such as closing a business deal. Referral marketing stats say that four out of five customers make a purchasing decision because of a referral. That’s why B2B referral marketing is crucial for a company’s credibility, branding, and growth.
10. 29% of B2B tech customers rely on friends for information.
(FinancesOnline, TrustRadius)
Verbal recommendations influence the buying decisions of almost a third of tech buyers, according to B2B referral statistics. When asked which information sources they would be most disappointed to lose, tech customers ranked friend referrals in fourth place, while prior personal experience, free trials, and demos held the first three positions.
Ecommerce Referral Advertisement Program Success
Ecommerce referral marketing has successfully brought more leads and sales to the stores. This marketing program is also called refer-a-friend marketing and relates to companies offering an incentive (coupons, discounts, cash) to old customers who bring the company new clients. We’ve displayed some intriguing referral marketing statistics for ecommerce below.
11. Clients gained via referrals have a 37% higher retention rate.
(Extole)
Most brands want loyal customers who will keep coming back. Numbers show that the chances of returning customers are 37% higher if they have first engaged with your company through a referral.
12. 83% of customers would recommend a product they are satisfied with to someone else.
(ReferralCandy)
Referral marketing stats reveal that four out of five people are willing to talk about your product once they buy it from you, but only 29% actually do. Therefore, asking customers to refer a friend or offering them an incentive is vital for referral rates to increase after a good purchase.
13. Sales through referral often close at 50%–70%.
(HubSpot)
According to some referral marketing statistics, chances of selling to a referred client are higher than selling to a lead from other sources. For example, referral sales close at up to 70%, while this is true for only 10%–30% of other sales methods.
14. 78% of companies who use social media sites for referrals perform better than others.
(Signpost)
Statistics have shown that four out of five companies perform better than others because they gain referrals through social media marketing. In addition, referral stats reveal that 71% of consumers are more likely to purchase a service or a product via referrals on social media.
15. 64% of customers say the referral program’s rewards affect how much money they spend.
(Signpost, Extole)
Offering a gift card, coupon, discount, or other rewards entices customers to buy from a brand. In fact, 81% of customers are very likely to interact with a brand program that has a reward system.
Referral Marketing Examples in Practice
A well-built referral-based marketing program can influence better purchases and customer engagement, resulting in greater business growth. Let’s see what the referral marketing stats on successful business practices have to show.
16. Airbnb’s bookings have increased by over 25% due to the referral program.
(Buyapowa)
This lodging company offers cash rewards to both the referrer and referee, which has proven to be an excellent method for increasing the booking rate and bringing new customers to the market. Moreover, the last version of the referral program has brought a 300% referral boost.
17. 13% of Evernote customers have become users through referrals.
(Buyapowa)
According to referral marketing statistics, almost 30 out of 225 million Evernote users have become customers via referrals. Evernote’s focus is on encouraging people to spread the word, which has proven to be a huge success.
The company gives each user 10 points for the first three friends referred. By gaining these points, users can prolong their free Premium trial period. On the other hand, referees gain access to a free month of the Premium plan.
18. 82% of Gousto acquisitions happen naturally or via referrals.
(Buyapowa)
Gousto is a company that offers meal kits and recipes to its customers. Referral statistics show that more than 80% of its acquisitions come through referrals or natural means. Employees at Gousto also give cash credit to people who refer the company to a friend. Referees, on the other hand, receive discounts for their Gousto food boxes.
19. SMARTY referral revenue growth was 154% in H1 2021.
(Buyapowa)
With over 550,000 subscribers, SMARTY’s revenue grew by 154% in the first half of 2021. Referral marketing stats for SMARTY reveal that the company managed to do this with only 40 employees. Its referral program was pretty straightforward: both the referrer and the referee received a month of free service after a successful conversion.
20. PayPal gets 7%–10% daily growth through referrals.
(ReferralCandy)
As a result, PayPal’s user base has increased to more than 100 million members. The company used to give cash incentives to people who invited friends to join — old customers and the newly-referred ones would get $10 each.
Referral Marketing Statistics — Conclusion
As a company, you can offer great services and products, make a lot of customers feel satisfied, and still have mediocre results. Moreover, people will inevitably talk, whether they’re pleased with the product or not. However, it would be a smart business move not to leave things to chance.
The importance of referral-based marketing is immense — think of how often you bought something a friend referred you to. With a head-start from referrals, you can reach a broader audience and close a larger number of business deals. Hopefully, the statistics presented in this article have provided insight into the power of a well-structured referral program.