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What is Referral Marketing?

Have you ever heard someone share about how they managed to land a coveted deal with just one right introduction? Well, with referrals, that someone could be you.

A referral is the process of an existing customer giving you a recommendation of a company or product you can use. In simpler terms, it’s a word of mouth promotion.

If you find that your business has a lack of referrals, it might be a sign that you may not be reaching out to existing customers and offering them enough new services, products, or solutions.

To see how it can help you build your business, continue reading this article.

Why are Referrals important for my business?

As a business owner, it’s crucial to know that referrals can drive your business forward. They’re the most powerful way of marketing your product, service, or business — and they can turn you into an industry expert and industry leader.

Referrals also act as a fantastic customer acquisition tool. Customers are bound to trust people that they know more than the brands itself. This means with referrals, getting customers in would be slightly more painless.

In this article, we have compiled a list of 38 statistics to show you the power of referrals.

Word-of-mouth Awareness

Attracting New Business

Better Quality Leads

High Conversion Rates

Highly Qualified Customers

  • Customers acquired through referrals have a 16% higher lifetime value

  • Customers referred by other customers have a 37% higher retention rate.

  • Every referred customer makes an average of 2.68 people

  • Referred customers can increase your profit margin by 25%.

  • Customers acquired through referrals spend 200% more than the average customer.

  • 92% of consumers believe referrals from somebody they are acquainted with.

  • Consumers referred by a friend are 4x more likely to buy.

  • Referred customers are 18% more loyal than non-referred ones.

  • B2B buyers are 5 times more likely to engage when someone else introduces them to your company.

  • Referred customers have an 18% higher rate of becoming long term clients as compared to the non-referred ones.

Build Trusted Relationships

  • 76% of B2B executives prefer to work with vendors who have been recommended by someone they know.

  • 73% of B2B executives prefer to work with sales professionals who have been referred to them by someone they know.

Want to get quality referrals?
Try out ReferReach!