21Jul

15 Facts About Why Referrals Matter for Your Business

 

Who doesn’t love hearing about a great product or service from a trustworthy source?  And who could you trust more than your friends and family? People have made purchasing decisions, done business and developed preferences for centuries based on the power of word-of-mouth.

We are social beings and exist in community with one another. People seek truth and share their opinions on what they’re buying and using, they want to share the value they are getting. And whether they share their opinions online or offline – you want your customers to share them so they can create real value for you and your business. If you still don’t believe referral marketing matters for your business, or you underestimate the power of a good referral, you need to read through these marketing statistics. 

  • Millennials ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products. Baby Boomers also ranked word-of-mouth as being most influential in their purchasing decisions about big-ticket items and financial products.
  • 84% of consumers reported always or sometimes taking action based on personal recommendations. 70% said they did the same of online consumer opinions. 
  • Word-of-mouth has been shown to improve marketing effectiveness by up to 54%.
  • 91% of B2B buyers are influenced by word-of-mouth when making their buying decision.
  • 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision.
  • 56% of B2B purchasers look to offline word-of-mouth as a source of information and advice, and this number jumps to 88% when online word-of-mouth sources are included.
  • On social media, 58% of consumers share their positive experiences with a company, and ask family, colleagues, and friends for their opinions about brands.
  • 72% say reading positive customer reviews increase their trust in a business; it takes, on average, 2-6 reviews to get 56% of them to this point. 
  • 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts.
  • 68% trust online opinions from other consumers, which is up 7% from 2007 and places online opinions as the third most trusted source of product information.
  • 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision.
  • 79% of people say their primary reason for “liking” a company’s Facebook page is to get discounts. 81% also said they’re influenced by what their friends share on social media.
  • 66% of respondents under the age of 34 are likely to give a referral after receiving social recognition.
  • More than 50% of respondents are likely to give a referral if offered a direct incentive, social recognition or access to an exclusive loyalty program.

Statistics provided by the follow sources: Ogilvy/Google/TNS, Nielsen, BrightLocal, MarketShare, Software Advice, Market Influence.

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