When it comes to obtaining referral business, there is no denying that word of mouth is a powerful marketing tool. While companies pour hundreds of dollars into blind customer acquisition through paid ads and SEO, sales leads through referrals outshine these efforts in both effectiveness and cost.
Yes, you heard that correctly. Referral business is essentially free marketing and valuable, warm leads. Whether you’re looking to increase your bottom line, boost customer loyalty, or build a customer base similar to those of your top performers, investing in referral marketing strategies is the right move.
Referral Business Statistics
Don’t take my word for it! Let’s let these 10 referral business statistics do the talking.
1.84% of people state that friends and family are the most trusted source of product recommendations. (Neilsen)
2. 84% of B2B decision-makers begin the buyer’s journey with a referral. (Saasquatch)
3. 78% of B2B marketers say that referral programs generate good or excellent leads. (Social Media Today)
4. Referred customers can increase your profit margin by 25%. (Wharton School of Business)
5. Referrals produce the highest lead-to-sale conversion rates. (eMarketer)
6. Referred customers have an 18% lower churn rate than customers acquired by alternate marketing means. (Wharton School of Business)
7. 83% of consumers are willing to refer after a positive experience, but only 29% do. (Texas Tech University)
8. 86% of companies with a formal referral business program see growth. (Small Business Trends)
9. 88% of marketers use referral marketing and loyalty marketing software. (Social Media Today)
10. Only 30% of B2B companies have a referral business program. (Heinz)
Rewarding Your Customers for Referral Business
The case is clear: referrals are a goldmine of opportunity for businesses and consumers alike. But with only 29% of consumers willing to leave a positive review for your business, customers clearly need some type of incentive to promote your product.
Why spend precious marketing dollars exclusively on outbound marketing when you can be allocating funds toward higher quality leads? With only 30% of businesses implementing a referral rewards program, now is the time to gain a leg up on competitors and tap into the goldmine of referral business.
With 88% of marketers using referral software, it looks like technology is a key in the collection of referrals. With the help of an incentive program, obtaining, tracking, and rewarding customer referrals has never been easier. Here are just some of benefits that today’s incentive technology can provide:
- An online rewards platform to organize referral input as well as streamline promotional marketing of your referral incentives.
- Point programs with the ability to redeem millions of rewards in an online shopping mall.
- Card Programs, including hundreds of virtual gift card options, or branded, reloadable debit cards for easy reward fund transfer.
- Performance tracking capabilities for referral data analysis and improvement.
- An incentivized learning system to educate customers on product information for stronger referrals, or to conduct surveys.
- Full integration with your current CRM system to keep data organized.
- Mobile app capability to enter referral business opportunities on the go.
Ready to Benefit from Referral Business?
Incentive Solutions is here to help. Click the following links for more information on our reward options and our in-house incentive software, or set up a free consultation with one of our trusted incentive program advisors. We’re here to help your business grow.