42 Referral Marketing Statistics to get you started on RAF Program (2024)

Referral programs are a bigger deal than some companies may realize. If you’re not yet leveraging the customer acquisition powerof word-of mouth-marketing, here are some referral marketing statistics that will change your mind and make you want to implement a refer a friend program tomorrow.

Every day, billions of recommendations happen just because someone likes a product or a service and tells someone, who then tells someone else, who in turn tells someone else—it’s human nature to talk about things we like.

Chances are your satisfied customers are talking about your brand right now, but are you giving their advocacy the attention it deserves? These referral marketingstatistics will help you evaluate where you stand.

Referral marketing statistics:

The power of word-of-mouth

The Word-of-Mouth Marketing Association reports that every day in the U.S., there are approximately 2.4 billion brand-related conversations. People frequently talk about the products and services they enjoy and the companies who offer them.
92% of consumers trust referrals from people they know–Nielsen
People are 4X more likely to buy when referred by a friend– Nielsen
77% of consumers are more likely to buy a new product when learning about it from friends or family. – Nielsen
81% of U.S. onlineconsumers’ purchase decisions are influenced by their friends’ social media posts versus 78% who are influenced by the posts of the brands they follow on social media. – Market Force
43% of consumers are more likely to buy a new product when learning about it from friends on social media. –Nielsen
85% of fans of brands on Facebook recommend brands to others. –Syncapse
84% of consumers say they either completely or somewhat trust recommendations from family, colleagues and friends about products. These recommendations make the information source rank highest for trustworthiness. – Nielsen
Customers are fast turning to their trusted social media platform for guidance. According to Shareaholic, social media accounted for nearly 31% of new business.
HubSpot states that nearly 78% of consumers admit being influenced by the posts of the favorite brands they follow on social media to buy a product.
39% of customers will prefer giving feedback about your business on social media. –JobsinMarketing

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The buzz that builds brands

74% of consumers identify word-of-mouth as a key influencer in their purchasing decision. –Ogilvy/Google/TNS
1 offline word of mouth impression drives sales at least 5x more than 1 paid, and much more (as much as 100X more) for higher-consideration categories. –WOMMA
Word of mouth is the primary factor behind 20% to 50% of all purchasing decisions. –McKinsey & Company
49% of U.S. consumers say friends and family are their top sources of brand awareness.
71% of consumers are more likely to make a purchase based on social media referrals.
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
Consumers rely on word-of-mouth up to 10X more than paid media. – Boston Consulting Group
55% of consumers share their purchases socially on Facebook, Twitter, Pinterest and other social sites.
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.
Up to 54% improvement in marketing effectiveness has been demonstrated through word-of-mouth. – MarketShare

The role of incentives

More than 50% of people are likely to give a referral if offered a direct incentive, social recognition or access to an exclusiveloyalty program. – Software Advice
39% of respondents say monetary or material incentives such as discounts, free swag or gift cards greatly increase their chances of referring to a brand. – Software Advice
70% of email readers open emails from a brand or company in search of a deal, discount or coupon. – Campaign Monitor
65% of consumers say that receiving rewards impacts their frequency of purchase.
79% of people say their primary reason for ‘liking’ a company’s Facebook page is to get discounts. – Market Force
64% of consumers say that rewards impact how much they spend.
69% of consumers say that they’re more likely to try a brand if it gives rewards.

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The results

Referral marketing generates 3-5X higher conversion rates than any other channel.
Customer referral programscan bringan average of 20,000 new email addresses per month – Annex Cloud
Referred customers have a 16% higher lifetime value compared to non-referred ones. – Harvard Business Review
When researchers analyzed specific case studies on referral software, they identified a 10% increase in WOM (offline and online), translating into a 0.2–1.5% sales lift. – MarketShare/ Keller Fay Group
Referred customers bring you a 25% higher profit margin.
A referred customer is 18% more loyal than a customer acquired by other means.
Referred customers are 4X more likely to refer more customers to your brand.
Customers referred by other customers have a 37% highercustomer retentionrate.
Customeracquisitionsthrough referrals spend 200% more than the average customer.
Robust advocacy-marketing programs are achieving significant revenue gains—10 to 20% for established products and up to 100% for new products.
One of Annex Cloud’s referral marketing clients saw a9.7% increase in conversion. – Annex Cloud
Another one of Annex Cloud’s clients saw an average of $100,000 in monthly revenue justfromreferral orders– Annex Cloud

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Want to make sure you’re on top of yourcustomer acquisition game? Launching or optimizing your own referral marketing program is a great next step?Get in touchwith one of our experts today orrequest a demoof ourreferral program software.