Referral Marketing Statistics: Why Word-of-Mouth Reigns Supreme
According to the Word of Mouth Marketing Association (WOMMA), there are more than 2.4 billion brand-related conversations every day in the United States. Sharing is an innate human trait, and people are always interested in talking about their favorite products/services. This highlights the immense potential for businesses to leverage referral marketing and turn positive word-of-mouth into new customer acquisitions.
Leveraging word-of-mouth is one of the best marketing decisions you can make. Referred customers have a 16% higher lifetime value compared to non-referred customers (Wharton). Referred customers are more loyal, less likely to churn, and are a cost-effective way to sustainably grow your business.
Image via Nielson
Key Referral Marketing Statistics That Prove Its Effectiveness
- People who were referred by their friends are 4x more likely to make a purchase than those who weren't referred (Nielson)
- 84% of consumers trust the recommendations of others over other forms of marketing (Nielson)
- The lifetime value of a referred customer is 16% higher compared to a customer who wasn't referred (Wharton)
- The churn rate of referred customers is 18% lower than customers acquired through other marketing channels (Wharton)
- Referred customers generate 16% more profit than non-referred customers (Harvard Business Review)
- 92% of consumers trust referrals from people they know, making it one of the most credible forms of advertising (Nielson)
- Consumers are 2-10 times more likely to rely on word-of-mouth referrals than paid advertising, highlighting the immense power of referral marketing over traditional paid channels (Boston Consulting Group)
- Referred customers have a 37% higher retention rate than non-referred customers, making them stickier and more valuable in the long run (Deloitte)
- Word of mouth generates more than twice the sales of paid advertising in some industries (McKinsey & Co)
Image via Deloitte
If you aren’t currently leveraging word-of-mouth marketing, you could just be sitting atop a large potential of missed growth opportunity. These word of mouth marketing statistics are proof of how powerful referrals can be.
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