Over a period of two years, their referral programs resulted in 6% of sales, generating over $100,000 in sales, with a 9X return on investment. One of my retail ecommerce clients connects their Shopify store to ReferralCandy to provide in-shop rewards for referrals in the food and drink industry. These loyal customers are worth up to 10x of the value of their first purchase. The best part? Encouraging existing customers to refer you to their network increases their lifetime value and aids retention. This is why word-of-mouth marketing generates five times the sales of paid advertising. The person giving the recommendation already has that-which, in turn, gives your product more credibility. With a referral program, you don’t have to plough money into getting in front of new customers then providing content that wins their trust. A referral program puts power in that referral machine and convinces more people to refer you (and to do it more often.) What is a referral program?Ĭhances are you have a group of happy customers who’re already referring your products to their network. The conversion rate of referrals from other websites saw a lift from 2.4% in 2018 to 3% in 2019, making it the highest-converting traffic acquisition channel. We can see this in action using website referral traffic. It beats newspapers, blogs, and magazines. Some 92% of consumers trust recommendations over traditional forms of advertising.įor more recent data: 18% of Gen X consumers say they use word of mouth as their main source of brand discovery. Why? Because new customers earned via referral have pre-established trust in your brand.Īn old (but still relevant) Nielsen study shows that recommendations from friends and family are one of the most credible forms of advertising. Referral marketing was rated the most effective tactic used by marketers at all stages of the sales funnel. Referral marketing convinces them to become independent promoters of your product-and get rewarded for doing so. This can include their family and friends through to anyone they see on social media looking for a product like yours.Īlso known as word-of-mouth marketing, it’s a growth tactic that leans on happy customers. Referral marketing is a strategy that incentivizes existing customers to recommend you to their own network. Choose the right referral program for you.What are the different types of referrals?.
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