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60 Referral Marketing Statistics Businesses Need to Know [2024]

60 Referral Marketing Statistics Businesses Need to Know [2024]

How many times have you tried a new restaurant or fragrance because someone introduced you to it? That is referral marketing at work. Referral marketing is a timeless marketing strategy where customers recommend a business’s products or services to their friends.  

If you’re planning to implement a referral marketing strategy in your business, you need to first understand how well it works. 

We’ve compiled this comprehensive list of referral marketing statistics to be your guiding light. These referral stats help you understand how consumers react to retail referral programs and what approaches work best.

Overall Referral Marketing Performance Statistics

referral marketing

Referral marketing is one of the most effective strategies ever. Check out these referral marketing stats to understand how effective this method is: 

1. 92 percent of people trust recommendations from their friends and family more than any other type of advertising.

2. 84 percent of B2B decision-makers believe that the B2B buying process begins with a referral.

3. About 82 percent of Americans rely on recommendations from friends and family when making purchases.

4. Customers who come through referrals tend to generate higher profits for businesses.

5. Word-of-mouth recommendations contribute $6 trillion in annual global spending, accounting for 13 percent of all sales. 

6. Referral leads have a 30 percent higher conversion rate

7. 43 percent of marketers who use referrals acquire over 35 percent of their new customers through them. 

8. Word-of-mouth impressions from offline sources drive at least 5 times more sales than paid advertising impressions.

9. Referral marketing has the highest conversion rate compared to other marketing channels.

Customer Referral Behavior Statistics

Find out how customers react to referral programs online or offline. These stats reveal what to expect from referral leads and actions that led to the referral sale: 

10. 55 percent of consumers like to share their purchases on social media

11. 50 percent of people trust online reviews just as much as they trust recommendations from their personal contacts.

12. 28 percent of millennials are reluctant to try a product if their friends don’t give their approval. 

13. 88 percent of Americans are interested in receiving rewards for sharing products on their social media platforms.

14. 79 percent of I.T. buyers rely on recommendations from peers when deciding on a vendor.

15. 98 percent of people read online reviews when considering local businesses. 

16. Consumers consider brand advocates to be more trustworthy sources of information compared to other sources.

17. 23 percent of people discuss their favorite products with friends and family every day.

18. Adweek reveals that there are 3.3 billion brand mentions in 2.4 billion brand-related conversations daily in the U.S. 

19. Referred customers are 37 percent more likely to make another purchase.

20. One-fifth of people in North America who discover a product through word-of-mouth buy it right away.

21. On average, a dissatisfied customer will share their negative experience with 8 to 16 people. 

22. Conversely, satisfied customers will spread the word about their positive interactions with a business to 4 to 6 individuals.

23. According to Miller, 33 percent of people on Facebook were influenced by a friend’s post to buy something.

Referral Program Design and Implementation Statistics

referral program incentives

Check out these referral program statistics to find out how business leaders and marketers go about their referral marketing plans.

24. Only 30 percent of North American B2B companies have a formal referral program in place.

25. Dropbox’s referral program is a well-known example of effective design. They offered extra storage space to both the referrer and the referee, resulting in rapid user growth.

26. 69 percent of employers have established employee referral programs.

27. While 91 percent of customers are willing to give referrals, only 11 percent of salespeople actually ask for them. 

28. Half of referral reward programs provide dollar credit to their promoters.

29. $10 is the most common reward amount in such programs. 

30. Almost 91.2 percent of referral programs are double-sided (they reward both the promoter and the referred customer).

31. 71 percent of employers believe that offering cash is the most effective way to encourage employees to refer candidates for job openings. 

32. 40 percent of company hires come from employee referrals

33. 43 percent of marketers use word-of-mouth marketing to boost sales.

34. 72 percent of referral programs offer equal rewards to both the referrer and the referee.

35. About 35 percent of companies that use gift cards as incentives for referrals also provide multiple vendors where the gift cards can be redeemed.

Industry-Specific Referral Marketing Statistics

Marketing referral programs perform differently across sectors. These B2B referral statistics explore the results to expect depending on your industry: 

36. The global average referral rate across different industries is about 2.35 percent.

37. The software industry has the highest referral rate at 4.75 percent 

38. Books follow at a second position with a referral rate of 3.27 percent, then food comes in third with 2.98 percent 

39. Companies like Atmorph and iWader Fishing have experienced high referral rates with 24 and 23 percent retention rates, respectively

40. 32 percent of people learn about new podcasts through word-of-mouth recommendations.

41. Similarly, 20 percent of people discover smartphone apps through recommendations from friends.

42. 37 percent of Americans rely on word-of-mouth suggestions to find new restaurants.

43. Nearly one-third (31 percent) of electronics buyers are influenced by recommendations from friends. 

44. Over half of craft beer drinkers in the U.K. stated they would try a new beer based on a friend’s suggestion.

Referral Marketing Trends and Innovations Statistics

referral marketing innovations

Marketers and organizations are now employing advanced technologies and practices to push the boundaries. Check out some of the key changes to expect in this industry in the next few years: 

45. The global market share value of referral marketing software is expected to grow from $225.9 million in 2019 to $713.3 million by 2027.

46. Brands will likely use more emotional messaging as it results in 3 times more referrals.

47. One-fifth of companies plan to use word-of-mouth marketing in their yearly marketing strategy.

48. Businesses will seek out more collaboration opportunities as 60 percent of all referrals come from partnerships.

49. About 70 percent of marketers are planning to increase their online word-of-mouth efforts, while 29 percent are focusing on traditional offline methods. 

50. Experts believe that artificial intelligence may encourage user recommendations by analyzing past preferences to suggest similar items

51. Referral marketing tools are evolving to integrate with popular e-commerce platforms.

Impact of Referral Marketing on Business Growth Statistics

If you’re wondering, how effective are referral programs? These referral statistics will answer your questions: 

52. Referred customers generate about 16 percent additional profit.

52. 86 percent of B2B companies with a referral program experience growth.

54. Referred customers have a 59 percent higher lifetime value.

55. Businesses that feature consumer reviews on their websites can experience a substantial increase in conversion rates, with an average increase of 19.8 percent.

56. According to Software Advice, 78 percent of marketers agree that referral marketing generates high-quality leads.

57. Over six years, the lifetime value of referred customers was found to be 16 percent higher on average compared to non-referred customers. 

58. 85 percent of small businesses state that word-of-mouth referrals are the main channel potential customers use to discover them.

59. Referred candidates are hired more quickly and tend to stay at the company for a longer period.

60. According to Williams, 86 percent of businesses with organized referral programs have seen an increase in revenue over a two-year timeframe. 

Empowering Your Strategy

Now, you understand the impact of customer referrals on business growth. You also have an idea of how most companies run their referral campaigns. These key referral marketing stats offer valuable insights that will serve as your guiding light.

Use these insights to create and direct your company’s referral program. Don’t forget that trends are always changing. These insights may not be valid in the near future, so you must keep up to date with current data sources. With tools like Mandala AI, you can always source real-time data to inform your referral marketing strategy. Sign up for a free account today and take your referral marketing to the next level.

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