Referral Marketing Statistics

When it comes to advertising, nothing beats referral marketing. Customer referrals are when companies encourage clients to spread the word about their products or services and share their positive experiences. Referral programs are a bigger deal than some companies may realize. Every day, billions of recommendations happen just because someone likes a product or a service and tells someone, who then tells someone else, who in turn tells someone else–it’s human nature to talk about things we like. 

This marketing method is effective because we tend to trust people close to us more than brands. When you hear about a great company, you’re much more inclined to become a customer knowing other people enjoy their services. Here’s a list of some referral statistics proving why customer referrals are the key to marketing strategy. 

Referral Marketing Stats Highlights

  1. 92% of consumers trust referrals from people they know.
  2. Referred customers are 4 times more likely to invite other people to your business.
  3. Customers acquired through referrals have a 37% higher retention rate.
  4. There is a 70% increase in the conversion rate for referrals from a satisfied customer.
  5. Referred customers have been proven to be 18% more loyal.

Referral Marketing – Key Statistics

92% of consumers trust referrals from people they know.

According to Nielsen’s latest Global Trust in Advertising report, which surveyed more than 28,000 Internet respondents in 56 countries, 92% of consumers around the world say they trust earned media, such as recommendations from friends and family. Above all other forms of advertising an increase of 18 percent in last few years.

Customers trust recommendations they receive from sources they know. No matter how many strategies the business uses as part of its digital marketing efforts, there’s nothing quite like a glowing referral.

Referred customers are 4 times more likely to invite other people to your business.

Study shows that referred customers are 4 times more likely to invite others to make a purchase when referred by a close friend or colleague. The referral builds confidence in the business since consumers are more likely to buy from a company they have reason to trust, like a friend’s recommendation. Peer-to-peer referrals are more effective and cost much less to generate, meaning the cost to acquire new customers is significantly less expensive than through traditional channels. 

Customers acquired through referrals have a 37% higher retention rate.

Referral marketing can grow the business if implemented strategically. Customers referred by other customers have a 37% higher retention rate. Suppose you’re in the plumbing business and just installed a water heater at a happy customer’s house. If they bring you a referral customer, they are more likely to stay with you than a new customer who found you organically. Why? Because they already trust your business, even before receiving the service.

Referral from a happy customer has a 70% higher conversion rate.

Customers referred to the business by someone happy with the services are more likely to engage in the products than random, non-referred customers. Referred customers convert at a rate that’s 70% higher than leads generated from other marketing channels. Referred customers positively perceive the brand because their peers promoted it. Trust is the key. Unlike other marketing channels where you gradually have to build that trust, you have their faith from day one with referral marketing.

Referred customers have been proven to be 18% more loyal.

Referred customers have repeatedly been shown to be the most loyal, high-value clients. Referred customers are more loyal than non-referred customers because they have a relationship with a fellow customer their referrer. Referred customers can get guidance about the firm’s offerings and procedures or receive help from their referrers in other ways. This relationship strengthens their trust, attachment, and satisfaction with the firm.

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.

Other Referral Marketing Stats

  • 82% of small businesses claim referrals as their main source of new business.
  • 69% of consumers are more likely to try a brand/business if they give rewards.
  • 78% of businesses that use social media to market and gain referrals perform better than their peers.
  • 94% of consumers report that positive reviews make them more likely to contact and use a business.
  • Four out of five consumers will change their minds about a business and their purchase decisions based on negative reviews.
  • Referred customers bring you a 25% higher profit margin.
  • Customer acquisitions through referrals spend 200% more than the average customer.


Referral marketing is a powerful form of word-of-mouth marketing one can use to boost conversion rates and attract loyal customers. 

Word of mouth is too effective a tool to sit and rust while your brand is in the trenches. The upper-listed referral marketing statistics have shown, that your brand will see revenue increases from actively encouraging referrals. Not only does a referral create a new customer, but it reinforces brand loyalty and helps retain existing customers.

These referral marketing statistics support that customer referrals are a vital business lead source. The statistics regarding marketing and sales show the referrals close faster and convert into better customers. Hence, a referral is the highest honor a business can receive from a customer.



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