The environment for marketing and sales is rapidly changing and businesses are looking past traditional channels to drive business growth. These 8 referral marketing statistics show that while most of us - as consumers ourselves - inherently understand the value of referrals, it's time for brands of all sizes to also start taking notice.
While you may see referral marketing work for successful companies like Uber and Airbnb, it's understandable that you might question if it can be achieved by your business. You might also be wondering if your unique audience would be interested, or engaged, in a referral program.
Here's the short answer: No matter the industry, successful referral programs generate a natural network effect. As you acquire more referred customers, an abnormally high proportion of them will convert into new brand ambassadors. Those ambassadors will then draw in new customers, and the cycle will start all over again.
8 Referral Marketing Statistics You Need to Know in 2020
Did you know a customer is four times more likely to make a purchase when referred by a close friend or colleague? Not only are peer-to-peer referrals more effective, but they also cost much less to generate, meaning your cost to acquire new customers is significantly less expensive than through traditional channels.
Referred customers have repeatedly shown to be the most loyal, high value clients. Building a steady flow of these customers will ensure a low-churn rate and more long-term customers, which is a win-win for brands looking to grow.
In any economic climate, both B2B organizations and eCommerce businesses can rely on referral program software to bring in cost-efficient, high-value, leads and potential customers. But especially right now, with more digital adoption across industries, referral marketing should be a critical component of your customer acquisition strategy.
Let's get to the facts - are customers really influenced by referral marketing? Can recommendations drive business growth? To get the full picture, check out our infographic below.
Driving Business Growth with a Referral Marketing Program
For referral marketing to consistently deliver truly exceptional results, it should be treated like any other high-value customer acquisition channel — invest in the process and technology, and incorporate it into your overall marketing strategy.
Many companies run their referral marketing programs manually, but are losing the ability to capitalize on the large opportunity of gaining new loyal customers. By automating the manual process of enrolling, tracking, managing and rewarding referrals, referral software enables companies to quickly scale their referral marketing efforts. Furthermore, leveraging referral technology enables companies to increase engagement and acquire new customers.
To learn how to create a referral program capable of driving high quantities of qualified leads and new customers, check out our latest eBook, "The Definitive Guide to Referral Marketing."