With advertisements bombarding us wherever we look, customers are becoming increasingly immune to ad campaigns. No matter how genius your next marketing idea may be, it feels as though meerkats in smoking jackets are starting to lose their edge.
Even influencers aren’t quite what they used to be. They are being paid to tell us what to buy, and they are terrible at hiding it – to the point where if I see another Lycra-clad “mother of three” with chiselled abs telling me that I need to invest in a pink reusable cup in order to be a success, I will go out of my way not to buy said cup.
So, if no one is noticing the clever ad taglines and celebrity endorsements anymore, then how does a customer choose what to buy? The answer lies in trust. If your friends and family use a certain product, chances are it’s because it’s good. Unless my 65-year-old mum has a secret influencer partnership with her favourite hairspray brand, then I can assume she recommended it to me because it works well. If I already believe it does a good job, then I don’t need much more to convince me to buy.
The Stats Behind Referral Marketing
The power of your product marketing lies firmly in the hands of your customer, which means that my mum is hairspray’s hardest working marketing exec and she doesn’t cost them a penny. But don’t take our word for it, here are 11 research-backed stats that show just how essential customer referral marketing is when it comes to building a successful marketing strategy.
- A Nielsen survey on advertising found that referral marketing outscored all other forms of advertising, including brand sponsorship, editorial content, banners, and other online ads.
- 83% of potential customers trust friend and family recommendations before making a purchase.
- Word of mouth is the biggest influencing factor behind up to 50% of purchasing decisions.
- Customers acquired from referrals have 37% higher retention rate.
- 81% of consumers are more likely to engage with brands that have reward programs.
- On average, referred customers spend 16% more.
- Customers are 67% more likely to purchase a product after it has been shared by a friend or family member on social media or via email.
- Word-of-mouth increases marketing efficiency by up to 54%.
- 83% of satisfied customers are willing to refer, however only 29% actually do.
- When referral tools are used, companies are 3x more likely to accelerate referral generation and conversion.
- 78% of B2B marketers say that referral programs generate good or excellent leads.
Your customers are your most influential brand ambassadors and they are boosting growth much more than a traditional ad can, so it’s important that these referral channels are easy for them to access. At Harviist, we’re passionate about all things referral marketing, get in touch at [email protected] to find out how our simple software can help you reach your hardest working customers.