Referral Marketing Statistics By Consumer Behavior, Incentives Offered, Demographics, Referral Gap, Reward Type and Popular Method

Introduction

Referral Marketing Statistics: In order to grow business, mouth-to-mouth publicity is the commonly used method to grab untouched markets. Referral marketing is part of the Words of mouth advertising. This marketing strategy is useful for customers that recommend the brand in exchange for discounts, gifts card, or many alike incentives. To survive in today’s competition, it is a must to follow all marketing strategies that attract customers until and after they become loyal customers.

Don’t miss out on these interesting Referral Marketing Statistics we could also help to grow your business in the local as well as international markets.

Editor’s Choice

• 89% of marketers believe that referrals sent by email are the most commonly used marketing channel.
• 50% of consumers are more likely to recommend a brand if they are offered a direct incentive.
• Commonly used referral marketing reward type includes dollar credit resulting in 50%.
• Consumers grabbed through referral marketing techniques have a 37% retention rate.
• Consumers who come to know about a particular product from their friends or family are 77% more likely to convert it into a sale.
• Refereed customers are 4 times more likely to refer more customers to a similar brand.
• 78% of marketers, 82% of sales leaders, and 87% of front-line sales representatives state that referral programs are most effective to grab new leads.
• Referral marketing has a 3 to 5 times higher capacity to generate conversions for the brands.
• 43% of consumers buy products if they are recommended by friends on Social media.
• As of Q1 of 2023, various eCommerce websites received visits from social media referrals by means of tablets (27%), Smartphones (12%), and Desktop (2%).

What is Referral Marketing?

As mentioned earlier, Referral Marketing is a word-of-mouth marketing strategy developed by many brands around the world. This strategy offers great publicity between friends and family about the brand. This tool is used by many businesses today. Many people confuse Referral marketing and Affiliate marketing, although these strategies have some similarities but differ from each other on some level.

Features of Referral Marketing

• Increases customer retention rate
• Creates brand awareness in unknown markets
• Increased customers database
• Improves brand image
• Increased attraction toward the company
• Wider reach
• An effective marketing strategy in cutthroat competition
• Improved ROI

Types of Referral Marketing

Social Media Referrals

Consumers are more likely to trust a brand if it has a social media presence as well as referrals on the platform. It is easy for companies to target customers and offer them discounts, coupons, or gift cards. Social media referral marketing has a wider reach.

Incentive-based Referrals

This type of referral program offers various gift cards, coupons, and discounts for referring friends or family to the business. Incentive-based referrals are more effective because consumers tend to look out for coupons and discounts.

Email Referrals

By means of email marketing, customers can acquire new product launches and even join referral programs that offer discounts from email marketing referral strategies.

Direct Referrals

The direct referral includes words of mouth promotions and it is an extremely cost-effective method of marketing. In this case, a brand can hire a brand ambassador who has a huge fan base and people follow the words leaving the brand ambassador's mouth.

Referrals From Reviews

Content marketing is another effective way to attract more customers. Written reviews by customers provide actual experience with the brand and therefore, attract more customers from various markets. Reviews can be in the form of written content, graphics, or videos.

Successful Referral Programs to Make Money Online

• Tesla (credits for every referral)
• Smile Direct Club ($200 for every referral)
• Spanx ($20 off on purchase)
• T-Mobile ($50 for every referral)
• Wealthfront ($5,000 for every referral)
• Wise ($50 for every 3 referrals)
• TurboTax ($25 for every referral)
• Fiverr ($100 for every referral)
• Dropbox (up to 32 GB of free storage for every referral)
• Casper ($75 gift card for every referral)
• Charles Schwab ($ 1,000 for every referral)
• Sam’s Club ($10 gift card for every referral)
• GetResponse ($30 account credit for every referral)
• SoFi ($50 to $500 for every referral)

Referral Marketing VS Affiliate Marketing

(Source: similarweb.com)

General Referral Marketing Statistics

• Referral marketing has a 3 to 5 times higher capacity to generate conversions for the brands.
• Referral Marketing state that, customer acquired with referral is 18% more loyal to the brand.
• A customer with a positive experience can refer to at least 2.8 people.
• 52% of the brands with referral programs have stated that it is effective in bringing in new customers.
• On the other hand, 78% of marketers, 82% of sales leaders, and 87% of front-line sales representatives state that referral programs are most effective to grab new leads.
• As of Q1 of 2023, various eCommerce websites received visits from social media referrals by means of tablets (27%), Smartphones (12%), and Desktop (2%).
• Consumers grabbed through referral marketing techniques have a 37% retention rate.
• The highest referral rate is for gadgets and electronics products resulting in 3.4%.
• The average referral rate for all types of brands is 2.3%.
• According to B2B marketers, the average conversion rate for most brands is 11% generated from referrals.
• Referral Marketing Statistics state that only 33% of customers believe in ads they see online.
• 89% of marketers believe that referrals sent by email are the most commonly used marketing channel.
• Referral marketing is 36 times more effective than simple marketing calls.
• 84% of the purchases with new brands occur because of referrals.
• 31% of the traffic on eCommerce websites meant for conversion is generated from social media referrals.
• Further Referral Marketing Statistics state that a customer who came in from a reference has 4.5 cents more profitable per day.
• 60% of business for small-scale industries is generated from referral marketing.
• As of 2022, the global referral market was 3.2 billion whereas by 2027 it is expected to reach 6.1 billion at a CAGR of 13.6%.
• In the United States of America, around 2.4 billion conversions related to brands occur every day.
• 2% of the referral programs benefit the referred friends as well as the promoter.
• Referred customers increase the profit margins of a brand by 25%.
• Brands with effective referral marketing programs experience 83% more growth in revenue within 2 years.
• Referral Marketing Statistics say that 9 out of 10 brand mentions occur offline.

Referral Marketing Statistics By Consumer Behavior

• 92% of the consumers, trust referred brands from acquaintances.
• Consumers who come to know about a particular product from their friends or family are 77% more likely to convert it into a sale.
• On the other hand, 43% of consumers buy products if they are recommended by friends on Social media.
• If a friend refers a product, the consumer is 4 times more likely to buy it.
• Almost 50% of the consumers in the United States of America state that, their friends and family are their preferred sources for recommendation of the brand.
• Customers who came in by referral are more likely to spend 200% above than the average customer on shopping.
• 83% of the referred customers expect a positive experience from the brands, whereas only 29% experience it.
• Refereed customers are 4 times more likely to refer more customers to a similar brand.
• Upon reading 6 reviews 68% of the customers come to a conclusion about the brand.
• The referral rate in the healthcare industry has an average conversion rate of 7.2%.
• According to Referral Marketing Statistics, 40% of the revenue in the referral business is generated from mobile devices.
• 88% of Americans prefer some kind of incentive for reviewing products on social media.

Referral Marketing Statistics By Incentives Offered

• 50% of consumers are more likely to recommend a brand if they are offered a direct incentive.
• 39% of the customers believe that brands that offer incentives for recommendation are more likely to get referral marketing.

Referral Marketing Statistics by Effective Marketing Strategies

• Customer Referral  (49%)
• Personalized message (37%)
• Online Events (35%)
• Investing in SEO (31%)
• Lead gen with intent data (27%)

(Source: explodingtopics.com)

• According to Referral Marketing Statistics, customer referrals are the most effective marketing strategy resulting in 49%.
• Whereas companies use other methods such as personalized messages (37%), Online events (35%), and Investing in SEO (31%).
• Lead gen with intent data is also one of the most used methods in terms of marketing strategies resulting in 27%

Referral Marketing Statistics By Referral Gap

(Reference: influencermarketinghub.com)

• 29% of customers around the world consistently give referrals resulting in 29%.
• Whereas, the majority of the people are willing to give referrals but rarely provide them resulting in 54%.
• On the other hand, 17% of the consumer have never given referrals.

Referral Marketing Statistics By Demographics

• 28% of millennials state that they won’t purchase any particular product if their friends or family had a bad experience with the brand.

Which Generation Trust Referral Marketing?

(Reference: extole.com)

• If we look at the above almost all of the customers in every generation trust referral marketing in almost similar percentages.
• 85% of millennials trust referral marketing more than any other generation.
• Whereas other generations contribute to trusting this marketing method by Gen Z (83%), Gen X (83%), Boomers (80%), and Silent Gen (79%).

Referral Marketing Statistics By Reward Type

• Commonly used referral marketing reward type includes dollar credit resulting in 50%.
• Whereas, gift cards are preferred by only 17.6% of consumers.
• On the other hand, 9.8% of referral programs have percent discount offers.

Referral Marketing Statistics By Popular Method

(Reference: truelist.co)

• According to Referral Marketing Strategy, lead forms are the most popular referral method resulting in 77%.
• Email referral and verbal referral count up to 73% and 54% respectively.
• In addition to these, other methods include Social media (50%), Sharable URLs (41%), and Print Cards (18%).

Conclusion

Conclusion of Referal Marketing Statistics marks that, this is the cost-effective way to acquire new customers in a short time. In the opposite of affiliate marketing where the reach is toward unknown people, referral marketing occurs between friends and relatives. Therefore, the major drawback of this method is that it has a limited reach. But, receiving discounts, and a gift card is a major attraction for customers, therefore, a referral marketing strategy is one of the best strategies to be used for a successful customer attraction market.

Barry Elad

Barry is a lover of everything technology. Figuring out how the software works and creating content to shed more light on the value it offers users is his favorite pastime. When not evaluating apps or programs, he's busy trying out new healthy recipes, doing yoga, meditating, or taking nature walks with his little one.

Read next

Phishing Statistics By Types, Country and Age Group

Trucking Industry Statistics 2024 - By Demographics, Income-Wise, Paid Taxes, Global Boundaries

Huawei Statistics By Market Share, Countries, Region, Customer Group, Operating System, Industry, Demographics, Category Distribution and Social Media

Tinder Statistics - By Users, Demographic, Match Rate, Country, Usage and Social Media Traffic