34+ Referral Marketing Statistics (2024)

Top Referral Marketing Statistics

• 92% of consumers trust recommendations from friends and family.
• Customers are 4x more likely to buy when referred by a friend.
• 71% of consumers will buy a product based on social media referrals.
• Over 4 in 5 consumers learn about new brands through conversations.
• 70% of consumers today distrust marketers.
• Word of mouth can drive up to 5X more sales than paid ads.

As Sharon Hurley from AMEX brilliantly puts it, “Referral Marketing = Free Advertising“.

Instead of greedy ambitions, this tactic is based on our love of sharing positive experiences, all with an ROI that laughs in the face of traditional advertising costs.

Let’s peek at the stats to see if this holds up.

01. 92% of Consumers Trust Friends and Family Recommendations More Than any Ads. Cornell

A study by Cornell University titled “The Epidemiological Strategy of Referral Marketing“, asked a sample of 28,000 people from 56 countries to see if Internet word-of-mouth creates a positive outcome.

Turns out, referrals from friends and family are trusted by 92% of consumers over any other ads.

The study also showed that rewards have a significant impact on motivating people to share information.

Rewards? Are you kidding me?

I’ll take it any day …

In fact, 55.8% of participants shared an online advertisement because they wanted to take advantage of an offer or discount.

Of those who shared, a substantial 74% cited the attractiveness of the offer as the main reason for doing so.

02. Customers Are 4x More Likely to Buy When Referred by a Friend. Invesp

Referral leads have a 16% higher lifetime value than other marketing leads.

Referral marketing converts 3 to 5 times more, yet only 30% of companies have a formal program.

03. Referred Customers Bring in 30%-57% More New Customers Compared to Others. HBR

Harvard Business Review’s referral contagion research found that referred customers drive 30-57% more new business compared to other clients.

Also referred customers refer 21% more people when reminded of their referral origin.

Reminded of their referral?

Please explain …

It helps them remember the positive connection they have with the referrer and the service.

Reinforces their trust and satisfaction … it’s a no-brainer.

04. 71% of Consumers Will Buy a Product Based on Social Media Referrals. SearchEngineWatch

Social media is king for reach!

54% of users turn to it to learn about products, and a whopping 71% are more likely to buy based on recommendations.

Nearly a third (29%) of users are more likely to buy something the same day they see it on social media.

05. Since 2020, mobile social media referrals in the U.S. have consistently had an 11% conversion rate. Statista

Social media referrals, which often involve influencer marketing, have consistently achieved at least a 10% conversion rate over the past four years.

The trend of shopping directly through social media is growing rapidly. 

In 2024, social commerce accounts for nearly 20% of all e-commerce worldwide and is expected to reach almost 22% by 2028.

TikTok, Instagram, and Facebook are the leading platforms. 

06. Marketing Team-Managed Referral Programs 3x the Chances of Hitting Revenue Goals. Customerthink

Customers acquired through referrals have a 37% higher retention rate compared to non-referred customers.

Companies, where referral programs were managed by the marketing team, were 3X more likely to hit their EOY revenue goals.

You know what else?

What?

Referrals bring in new customers on top of contributing to long-term loyalty.

Think about that.

07. Word-Of-Mouth Marketing Is Free Advertising From Your Customers. American Express

65% of U.S. users feel more connected to friends through Facebook Stories, and 58% visit a brand’s website after viewing its story.

Engaging content is king!

And for obvious reasons, User-generated content (like reviews) is perceived as more trustworthy than traditional advertising.

08. Over 4 in 5 Consumers Learn About New Brands Through Conversations. Impact

Yet another stat shows us that consumers rely on referrals more than ads.

“Over 80% of consumers find new brands through conversations”.

These stats are honestly overwhelming.

Everyone should focus on WOM marketing ASAP 😂

I know right?

The study also found that, specifically Higher rewards and simple programs make more consumers join referral programs.

So there you go …

09. Dropbox’s User Base Skyrocketed From 4 Million in 2010 to Half a Billion in 2016, Mainly Driven by Word of Mouth and Referrals. Dropbox

Dropbox has seen a significant increase in user connections, with 3.3 billion connections made through sharing among users.

44% of Dropbox’s user base came through another user!

And 75% of their users are outside the us.

10. 32% of Marketers Found Email Surveys to Be the Most Effective Method to Measure Customer Satisfaction. ReferralRock

Email surveys are the most widely used method, employed by 85% of marketers, and were deemed the most effective by 32% of marketers, followed by customer reviews @20% and website/in-app surveys @15%.

Most marketers conduct customer satisfaction research frequently, with 49% doing so monthly, 20% weekly, and another 20% daily.

What was found below Web/In-App surveys?

• In-person conversations @12%
• Social Media @7%
• Customer feedback forms @5%
• Phone/video chat conversations @5%
• Data analytics @2%
• Live chat @2%

11. Word of Mouth Can Drive up to 5x More Sales Than Paid Ads. Businessnewsdaily

Word-of-mouth drives 5 times more sales than paid ads and influences 90% of purchases.

This comes as no surprise as fewer than half of people find traditional TV, magazine, and newspaper ads credible.

In fact …

20% of North Americans instantly buy a product they learned about via word-of-mouth.

Millennials are 38% more likely to discover a company via word-of-mouth.

12. On Average Referrals Can Be 10 Times More Effective Than Traditional Marketing Methods. ReferralFactory

Referrals can be a top-performing lead acquisition channel, sometimes outperforming paid ads.

Double-sided referral programs where both the referrer and referred friend get a reward tend to perform better than single-sided programs.

I notice this trend in SaaS.

Especially in Online Banks and subscription-based web apps.

Referral programs work well for both B2B and B2C businesses.

13. Referrals Generate 65% of New Business Opportunities. Annex

And these customers spend 13.2% more than customers acquired by other means.

Customers act as advocates, potentially reaching a wide audience through personal networks.

But they also spent more cause of increased perceived trust.

14. Referred Customers Are Worth at Least 16% More Than non-referred Ones. Wharton

Referred customers are more valuable in both short-term and long term. They bring in more profit initially and stay loyal longer.

Why?

Spending capacity?

No, it’s actually because they come with built-in trust and credibility.

According to the study, they also seem to start with a higher profit margin than non-referred ones.

In almost all cases, the extra value they bring is greater than the cost of referral fees.

15. Social Media Is the New “Word-of-Mouth”. UMD

64% of marketers agree that word of mouth is the most effective form of marketing.

Despite the rise of social media, many referrals still occur offline through personal interactions.

But the ones that occur online show faster results and are easier to measure.

16. 90% of Millennials Want Compensation for Sharing Products on Social Media or Email. Getambassador

Well, that was kind of expected 🤔

Who doesn’t want compensation?

The other 10% apparently!

Here are some more findings from the same study:

56% of American women aged 18-34 seek reviews about beauty products.

Parents in the United States ask for recommendations before purchasing a product 90% of the time.

17. 52% of Buyers Rule out Referrals Before Engaging With a Company. Turbify

The participants answered that this happens because sellers often have unclear services, irrelevant expertise, and unimpressive websites.

This might be tied to the fact that 81.5% of buyers get referrals from people who aren’t even clients.

18. The Global Referral Marketing Software Market Is Projected to Reach $1.08 Billion by 2028. Maia

The Referral Marketing Software market size was valued at USD 563.47 million in 2022 and is expected to expand at a CAGR of 11.6% during the forecast period, reaching USD 1,078.78 million by 2028.

What’s referral marketing software?

It automates the process of managing referral programs. 

As in referral tracking, automated reward management, reach analytics, so on …

19. 95% of People Influence Friends to Make at Least one Purchase a Year. Buyapowa

Notice they said, “At Least” …

A significant majority (95%) of people have the ability to influence their friends to make a minimum of one purchase per year. 

One purchase a year might sound small.

But it’s not small in a $4 Trillion+-a-year industry.

20. 43% of Marketers Use Word-Of-Mouth Marketing to Boost Direct Sales. Uprisecampaigns

Even fewer use it to cut costs by having customers help each other with service needs.

WOMMA survey shows that referrals and social media marketing are becoming more important for companies.

It’s definitely underutilized.

26% of marketers see online social media marketing as a major expense, while 21% prioritize offline WOM marketing.

Smaller companies invest more in WOM marketing than larger ones. Only 20% of large companies consider social media marketing a major category.

21. 57% of Gen Z Are Excited to Receive Direct Mail. AT

Over half (51%) of consumers were more excited about direct mail last year compared to the year before.

Excitement was highest among Gen Y (65%), Gen Z (57%), and Gen X (53%). Baby Boomers were the least excited (36%).

22. 59% of U.S. Adults Learn About Local Events Through Word of Mouth. Recmanagement

Most U.S. adults learn about local events from social media (66%) and word of mouth (59%).

Facebook is the top platform (53%), followed by Instagram (27%) and other social media (21%).

Facebook takes more than half?

Yeah, Facebook is the most used platform for WOM.

Millennials and Gen Zers mainly use social media for event info, while Gen Xers (69%) and Baby Boomers (63%) rely on word of mouth.

Parents are more likely to use social media for events than non-parents (80% vs. 58%).

23. 52% of Car Buyers Are Influenced by Personal Recommendations, While 22% Rely on Youtube Reviews.” Autolist

Word-of-mouth from friends, family, and coworkers influences 52% of car buyers. 

Data-backed organizations influence 33% of buyers. Wile Media awards from outlets influence 26% of shoppers.

24. Brands Using Advocate Marketing Get 17.5x More Reviews. Relationshipone

A study by G2 Crowd and Influitive found that companies with advocate marketing programs get up to 17.5 times more product reviews.

They also receive 3.5 times more page views, generate 200% more leads, and achieve higher user satisfaction and market presence.

Advocate Marketing huh?

Advocate marketing involves loyal fans and customers to boost brand awareness through reviews, references, and content sharing. 

25. 70% of Consumers Today Distrust Marketers. Granter

70% of consumers distrust marketers. ✋

This distrust drives the brand renaissance, aiming to rebuild trust and align brand positioning with real actions.

94% of marketing leaders say a brand is crucial for customer behavior.

Maintaining brand relevance is key, with 35% naming it a top challenge.

26. 41% of Marketers Rank Word-Of-Mouth in Their Top two Trust-Building Channels. DMA

As you can see in the above graph, Email leads at 51% and WOM is second at 41%.

Out of the research Text/SMS was found to be the least used or trusted channel only at 3%.

SMS for Marketing is kinda creepy.

It’s true …

Most users mark SMS-based mass marketing as spam.

And half (45.6%) of all irrelevant emails sent are considered to be spam as well.

27. 69% of People Avoid Buying From Retailers Due to Negative Feedback From Friends and Family. Sourcingjournal

69% of people avoid buying from retailers due to negative feedback from friends or family.

On the other side …

When considering new retailers, 47% prioritize cost, and 36% prioritize quality.

28. Buyers’ Decisions Are Most Impacted by Receiving 3-9 Referrals. Oechsli

Oechsli’s research focused on how financial advisors use WOMI, measuring it by the number of referrals received within a 12-month period.

55% of financial advisor clients come after 3-9 referrals, 22% after 0-2 referrals, and 19% after 10+ referrals.

Takes a lot of convincing …

It’s not really that much for something as serious as choosing a financial advisor.

92% of clients found their advisor through word-of-mouth influence (WOMI), and 60% chose their advisor because of it.

29. 85% of Unhappy Customers Switch to a Different Provider. Francisbuttle.

85 out of every 100 unhappy customers will switch to a different provider!

Customers are more likely to share negative word-of-mouth (NWOM) about services than goods.

Research shows 75% of customers who experience a service failure tell at least one other person.

30. Word of Mouth (Wom) Has a 40% Research-To-Purchase Ratio. RRD

Word of mouth has a higher research-to-purchase ratio (40%) compared to social media (30%), online/digital ads (27%), and print ads (16%).

Direct Mail has the lowest purchase impact?

Actually, According to the survey, Podcasts at 13% had the lowest purchase power.

31. 88% of People Trust Online Reviews as Much as Personal Recommendations. Winsavvy

88% of people trust online reviews as much as personal recommendations.

Isn’t that something?

Verified online reviews act as “word of mouth”, and are highly trusted.

32. 85% of Social Media Users Say They Trust Ugc More Than They Trust Branded Content. BigCommerce

85% of social media users trust user-generated content (UGC) more than branded content.

However, only 16% of brands give clear instructions on creating and sharing UGC to avoid seeming pushy.

UGC like Reddit and Quora?

And like comments, shoutouts, reviews, posts …

UGC builds trust through social proof.

33. 92% of B2b Buyers Are More Likely to Buy After Reading a Trusted Review. G2

92.4% of people said yes, and 7.6% were unsure.

Despite that, only 1 in 5 companies use reviews in their marketing.

Reviews build trust, provide credibility, and show value, offering great opportunities.

34. 95% of Purchasing Decisions Are Subconscious. Inc

Yes, 95% of consumers are more driven by emotions than logic in their purchasing decisions.

The same amount of people want content to move them through every stage of the funnel. (The Rabbit Hole Effect)

People often don’t even realize this themselves and might say they make logical choices based on features, but research shows emotions are a bigger factor.