When getting onto a good program for your marketing strategy, a referral one can prove to be most successful for those just starting up a business. However, it should never go without having particular strategies to help move things along. This can be a new way to help one truly develop their brand. Also, they can advance in different things from setting up a good program with a referral partner or even create a beta system that has a loyal following. In this case, here are some quality statistics to help a person see how referral marketing is actually very effective. Take a look at the stats below:
1.“Companies with formalized referral programs experience 86% more revenue growth over the past two years when compared to the rest.” (Heinz Marketing)
Having a good plan of action can be great for long-term growth. The more experience a company has with referral program, the better they’ll be off to help increase their revenue over a few years.
2. “Word of mouth is the primary factor behind 20-50% of purchasing decisions.”(McKinsey)
This is nothing new, because word of mouth has been around since time. However, this is one of the essentials of referral marketing. It’s all about getting referred to a product or service through someone’s words that you trust.
3. “1 offline word of mouth impression drives sales at least 5x more than 1 paid, and much more (as much as 100 times more) for higher-consideration categories.”(ANA Influencer Marketing)
Word of mouth holds a lot of weight when it comes to getting people involved more organically. This is important, because it feels more natural rather than through a forced advertisement.
4. “88% trust online reviews as much as they trust reviews from their personal contacts.” (Bright Local)
When it comes to getting a product, a lot of people look through the online reviews and testimonies. Typically, they try to see if there’s a certain pattern available that will help indicate whether or not something is worth dealing with at the end of the day.
5. “Customer acquisitions through referrals spend 200% more than the average customer.” (Annex Cloud)
More customers are going to be able to get with the program through referrals. Whether it’s an exclusive invite or just a friend letting them know of a popular thing, these are essential in creating more buzz to a company.
6. “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)
Referrals have become a very strong way of doing things as far as the marketing is concerned. It’s important to implement this in one’s strategy in order to step ahead from the competition.
7. “A whopping 97% of IT professionals say they rely on peer recommendations and ratings/reviews during the buying cycle.” (Spiceworks)
This type of input is crucial to setting up the backend to a product line. When they get this information, it’ll be better for long-term results in order to find a good balance between design and actual content that resonates with people.
8. “Business to business companies with referrals have a 70% higher conversion rate, and they report a 69% faster close time on sales.” (Heinz Marketing)
This is an interest thing to realize, because more companies tend to work with each other in a system that benefits them both. It could be a joint venture where one business has an exceptional product and the other brand has a good loyalty following, which makes a high conversion rate if both work together.
9. “Referred customers’ LTV is 16% higher when compared to non-referred customers.”(Wharton School of Business)
Referrals have a much higher value, because it comes from a friend, family member, or acquaintance rather than a business simply doing marketing to draw someone to the company.
10. “When referred by a friend, people are 4x more likely to make a purchase.” (Nielsen)
A friend is someone a person can trust, which means that their word holds a lot more weight. This is especially the case when buying a product.
11. “Customers acquired through referrals have a 37% higher retention rate.” (Deloitte)
The customers pay attention more when they’re generally interested in a certain content.
12. “According to the New York Times, 65% of new business generally comes from referrals.” (New York Times)
People always want to be influenced from other things, such as a friend or relative. They value their opinions more due to them having one’s best interest at hand. This is important, because that close-knit relationship lasts for the long haul.
13. “74% of consumers identify word-of-mouth as a key influencer in their purchasing decision.” (Ogilvy)
Most people tend to go for familiarity as it brings a lot of trust. It’s important to have this early camaraderie to make it better for a future purchase decision.
14. “83% of consumers are willing to refer after a positive experience—yet only 29% actually do.” (Texas Tech University)
People can be a bit lazy or forgetful in actually promoting after a good experience.
15. “Referred customers have an 18% lower churn than customers acquired by other means.” (Wharton)
When getting referred to a specific program, this means they’re on there for the long-term due to believing in the program.
16. “You can expect at least 16% more in profits from referred customers.” (Harvard Business Review)
More of a profit incentive due to having a stable set of customers.
17. “87% of frontlines sales reps, 82% of sales leaders, and 78% of marketers surveyed agree that referrals are the best leads your business can get.” (Heinz Marketing)
Referrals have a certain power available that allows them to impact the way people see your business. It’s important to notice this, because this is a grassroots level of marketing to help in seeing the demand for your product.
18. “Consumers rely on word-of-mouth 2x to 10x more than paid media.” (Boston Consulting Group)
While good advertising is great to speed things up as far as reputation, word of mouth has more conviction. Those words are more sincere. It’s important to take advantage of this in a more effective manner.
19. “Eighty-two percent of small business owners have said their main source of new business is referrals.”(Constant Contact)
Helps to bridge the gap between the big businesses and small businesses. Great to even the playing field.
20. “When marketing manages the program, companies were 3x more likely to achieve revenue goals.”
Yet only 10% of companies have tasked marketing with managing the referral program.”(Heinz Marketing)
Quality marketing is very important, because it helps to give people the right kind of promotion to meet their goals 300% more than no effort.
21. “77% of consumers are more likely to buy a new product when learning about it from friends or family.” (Nielsen)
People become more comfortable with friends or family and trust their judgement.
22. 92% of respondents trusted referrals from people they knew.” (Nielsen)
Having a past relationship/bond with someone holds more clout.
23. “Every referring customers makes an average of 2.68 invites.”(Referral Saasquatch)
They tend to spread the message via word of mouth, so that makes it easier for businesses to get more foot traffic.
24. “14% of customers who visit a referral page take an action.” (Referral Saasquatch)
More people are bound to make a purchase or subscribe on a referral page.
25. “Word-of-mouth has been shown to improve marketing effectiveness by up to 54%.”(MarketShare)
It’s important to find a solid method to acquiring more traffic and buyers. Word of mouth is powerful because it comes from people that you trust. That’s a better marketing tactic than a simple ad.
26. “84% of B2B decision makers start the buying process with a referral.” (Heinz Marketing)
A lot of people are more cognizant of how referrals impact buying. This is a crucial step in creating a good business.
27. “81% of consumers are more likely to engage with brands that have reward programs.”(Nielsen)
People tend to flock to programs that actually have a reward when buying. It’s like getting an incentive of investing or purchasing.
28. “70% of email readers open emails from a brand or company in search of a deal, discount, or coupon.” (The Social Habit)
More people are finding that they need a good an incentive to truly put their message across. A deal, discount, or coupon is created to get a prospects attention. They will most likely make a more positive course of action due to having a good thing in order to buy.
29. “Offering a reward increases referral likelihood, but the size of the reward does not matter.” (American Marketing Association)
It’s important just to have an incentive or lead-in to get the prospect’s interest.
30. “Non-cash incentives are 24% more effective at boosting performance than cash incentives.” (University of Chicago)
For some people, they enjoy discounts or getting a prize/free things rather than simply cash.
31. “Social media drove 31% of overall traffic to sites.” (Shareaholic)
Engagement is certain key to the success.
32. “79% of people say their primary reason for “liking” a company’s Facebook page is to get discounts.” (Market Force)
Facebook is a good form of social media, but the key is finding a way for good advertising. When a business has a good discount coupon or a sale posted, this makes a prospective customer want to buy more.
33. “59% of Pinterest users have purchased an item they saw on the site, 33% of Facebook users have purchased an item they saw on their news feed or a friend’s wall.” (Marketing Charts)
Social media has made a good way of allowing a business to get more attention to their brand. This social aspect has given people better interaction and visibility.
34. “On social media, 58% of consumers share their positive experiences with a company, and ask family, colleagues, and friends for their opinions about brands.” (SDL)
Social media is an ideal spot for getting in contact with peers and family. They typically share their opinion on a brand through a review, a like, or even promoting a special deal.
35. “85% of fans of brands on Facebook recommend brands to others, compared to 60% of average users.”(Syncapse)
A sound recommendation is very powerful, especially on the right platform. This could be a great way to attract people to different brands via social networks.
36. “43% of consumers are more likely to buy a new product when learning about it on social media.” (Nielsen)
Social media has a way of attracting an interactive audience. It’s a lot easier to share and see the details of things. Plus, people will have different reviews or share their experience.
37. “Social media produces almost double the marketing leads of trade shows, telemarketing, direct mail, or PPC.” (Nielsen)
With a lot of people on a computer or mobile device, they are more inclined to buy in the comfort of their own homes. They can also find out more about the products in their own time. Social media has a more of an organic approach, and this fares better to the average person.
38. “89% of millennial women trust recommendations from a friend, peer, or family member more than recommendations from a brand (11%).” (Mom Central)
More women are involved in taking referrals from their friends, peers, and family members. This is especially the case in regards to products suitable for their particular needs.They value their peers/friends advice, because those are people they trust to use the product or service.
39. “Advocates’ recommendations are the most trusted source across all age groups: Millennials, Gen X, baby boomers, and mature adults.” (Deloitte)
When it comes to a supporter, that means they have used the product for themselves. Their word holds weight no matter the demographic of people. This is become there’s a living and breathing human that actually has used it.
40. “Brand advocates are 50% more likely to influence a purchase.” (Marketing Charts)
It doesn’t matter if it’s a brand advocate on a website or going on social media, their words hold a lot of weight. People look to them as major influencers and that certainly sways their opinion on certain things.
At the end of the day, referral marketing should be used as a tool to enhance brand attractiveness. This will enable them to seek long-term revenue and traffic growth. What are some other statistics that prove useful? Drop a note below.