5 Referral Facts You Can’t Afford to Ignore!

by | Aug 23, 2016

When was the last time someone referred a product or service to you? Last week? Today at lunch? Chances are, you recently made a purchase based on the opinion of a family member or friend. Whether their suggestion was for a new movie, a salon service, or a great mechanic, when it comes to getting advice from a trusted source, we’re all ears.


Referrals are great because they take most of the research out of the purchasing process. But from the business owner’s point of view, it’s hard to tell whether the customer is making a purchase on the basis of a referral, or if they’ve come in thanks to other marketing.


Therein lies the biggest argument people have against strengthening their referral programs: Referrals are notoriously hard to track. How do you know if you’re getting a decent return on your investment? Are you throwing money out the window and watching it fly away in the breeze?

We know how tempting it can be to question the efficacy of your referral program, but the truth is, eliminating it would be a big mistake for your bottom line. Here are five referral facts you can’t afford to ignore:

1. Harris Poll Online is rife with answers to the question “Why referrals?” Their data includes some staggering numbers. According to Business 2 Community, a hub for business-related news, strategy, and resources, 82 percent of Americans ask family and friends for recommendations about a purchase, and that number leaps to a staggering 92 percent in the 18- to 34-year-old range. Oh, and just so you know, an overwhelming majority of people — 88 percent to be exact — would love a referral incentive to send friends and family your way.

2. It’s not only the word of friends and family that people trust. According to BrightLocal, 88 percent of consumers trust online reviews just as much as they trust personal recommendations from their social circles. These individuals are also using other consumers’ experiences to determine the overall quality of products and services.

3. According to a survey by the marketing mavens at SDL, when it comes to talking about positive brand experiences, 58 percent of consumers share and ask for recommendations on social media.

4. According to Friendbuy, a company that focuses on referral tracking and campaign optimization, 77 percent of people are more likely to purchase if they’re referred to a product by their family and friends.

5. Referral marketing channels are helpful for facilitating at least four of Dr. Robert Cialdini’s six “weapons of influence” from his seminal marketing book “Influence: The Psychology of Persuasion,” including reciprocation, social proof, liking, and authority. This makes referral marketing a powerfully influential way to promote your business.

Every big name has to start somewhere, and for many, that means turning customer satisfaction into product hype. But for that, you’re going to need a dedicated group of niche customers.

vans referrals

When you find a demographic that is close-knit enough to refer one another to your product or service, you’ve hit gold. The popular shoe brand Vans, for example, blew up after marketing to the skating subculture in the 1970s, once word spread about their cool, customizable kicks.

It’s a classic story of fads, fame, and ultimately fortune. Vans leveraged the power of referrals and in-person marketing at events to create their now-famous shoe brand.

At the time, it may have seemed like a completely organic phenomenon, but Vans knew what they were doing. They jumped on the opportunity to market to a growing subculture of young people with shared opinions and a gravitation to anti-conformity. Vans put their shoes to the streets, and the new generation couldn’t help but talk about the cool new shoe they’d found.

Referrals aren’t always easy to track — especially when they come from word of mouth — but look at the facts. Scout out ideas from companies who have made referrals the backbone of their business.

Once you see the success stories, you’ll be less likely to ditch your referral program and will feel inspired to launch a new one instead.

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