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29 Statistics That Prove Word-Of-Mouth
Marketing Works

It's no secret that word-of-mouth marketing is one of the most effective ways to promote a product or service. In fact, studies have shown that word-of-mouth is 10 times more effective than traditional marketing techniques.

There are several reasons why word-of-mouth is so effective. We've put together some statistics in this article that proves it.

What is WOM marketing?

Word-of-mouth marketing (WOMM) encourages satisfied customers or other advocates to promote your product or service to people they know, who, in turn, may become customers themselves". Word-of-mouth marketing has become increasingly popular due to the rise of social media.

WOM marketing is one of the most powerful forms of advertising, as 88% of consumers trust their friends' recommendations over traditional media. (Investopedia).

There's no doubt that word-of-mouth is still king when it comes to marketing. It's also one of the most effective ways to grow your business.

How often do you ask for referrals?

The thing is, we often ask for recommendations when buying a new product or service. After all, we're more likely to trust feedback from people that we know rather than sponsored ads.

Even if we find an in-depth blog post or video, online reviews or feedback from friends will ultimately seal the deal. This is exactly why word of mouth marketing is a powerful marketing strategy.

If you still need to be convinced, here are some statistics that prove referrals work.

Why word-of-mouth marketing works

Consumers use word of mouth to discover new products or evaluate their purchase decisions to guarantee that their money is well-spent.

  1. 72% of people get their news of the day from friends and family, making it the most common way to learn new information. (Pew Research Center)
  2. 92 percent of consumers trust word of mouth from friends and family above all other forms of marketing or advertising. (Nielsen)
  3. Consumers talk about their brand-related experiences around 90 times per week. (Hubspot)
  4. 90% of consumers believe in brand recommendations from friends, while 70% believe in consumer opinions. (Hubspot)
  5. Word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions. Its influence is greatest on first-time customers or when the said product is expensive. (Mckinsey)
  6. Word-of-mouth recommendations are four to five times more influential than indirect recommendations from promotional media. In fact, 50% consult their friends and family, which is more than company websites (39%), blogs and forums (35%), newspapers and magazines (13%), TV (13%), social media (10%), and radio (3%).
  7. Word of Mouth increased marketing effectiveness by up to 54%. (Forbes).
  8. 49% of US consumers believe friends and family are their top sources of brand awareness. (Invespcro)

Word of mouth's impact on purchase decisions

While many factors influence a person's purchase decisions, word-of-mouth marketing can be particularly influential. In fact, a recent study found that nearly two-thirds of respondents said they had been influenced by word-of-mouth when making a purchase decision.

The Impact of Word-of-Mouth (WOM) on Consumers' Purchase Decisions Word-of-mouth marketing is a form of marketing that uses personal recommendations from satisfied customers to promote a product or service.

Friends and family are perceived as trustworthy sources of information. Since their feedback and experience are more accurate, it has a significant influence on consumers' purchase decisions.

  1. 61% have recommended a local business to their network by word of mouth. (Bright Local).
  2. On social media, 37% have used Facebook, 12% Twitter & 10% Google+ to make local business recommendations. (Bright Local)
  3. 37.6% of respondents believe word-of-mouth had an influence on their decision-making when dining out, while 33.1% of respondents reported similarly when purchasing electronic goods. (Statista)
  4. 91% of B2B purchasers said that their buying decisions were influenced by word-of-mouth. (Reuters)
  5. 67% of consumers are more likely to purchase a product after a friend or family member shared it through email or social media. (Web Profits)
  6. For millennials, word-of-mouth is the top leading influencer in their purchase decisions when considering apparel, big-ticket purchases, financial products, and packaged goods. (Marketing Charts).
  7. Word-of-mouth is the driving force of purchase decisions for 54% of consumers. (The Producer's Perspective)

Customers want to join referral programs

If you don't have a referral program yet, then you're missing out on a lot. Many customers are willing to refer to your brand if they can get incentives in return. According to an RRD survey of 1,000 consumers, 55% learn about products through word of mouth.

More than 50% of people are willing to get referrals if they receive direct incentives, social recognition, or access to an exclusive loyalty program. (Invespcro)

  1. More than 50% of people are willing to get referrals if they receive direct incentives, social recognition, or access to an exclusive loyalty program. (Invespcro)
  2. 77% of Americans prefer to receive cash rewards in exchange for a referral. (Nielsen Harris Poll)
  3. 83% of satisfied customers are willing to give a referral, but only 29% end up doing it, likely because they were never asked. (Forbes)
  4. The most effective incentives for a high referral rate on social media include the following:
  • A discount code or coupon for "Liking" or "Following" a brand page - 35%
  • Access to limited-time offers for sharing social content - 35%
  • Discounts on e-commerce purchases for referring friends and family - 20%. (Retail Touchpoints)

Referred customers are more valuable

While referrals can happen organically, businesses can also set up their own referral program and increase brand awareness. When customers talk about your product or service, it helps to increase brand awareness and exposure.

For starters, a referral program incentivizes brand advocates to recommend a brand in order to get rewards, freebies, and exclusive offers. Interestingly, word-of-mouth marketing studies show that referred customers are more likely to be loyal and generate more profits for the business over time.

  1. Referred customers have a 37% higher retention rate. (Deloitte)
  2. The lifetime value of referred customers is 16% higher than non-referred customers, despite similar demographics and time of acquisition. (Wharton)
  3. The speed at which referred customers churn and move on with another brand is around 18% lower compared to other consumers. (Wharton)
  4. The average return on investment for a referral program is roughly 60%, and this is over a six-year period. (Wharton)
  5. Companies with referral programs experienced 86% more revenue growth over a two-year period than those without. (Web Profits)
  6. 20% of small business owners are happy with their current referral program. (Web Profits)
  7. 75% of business owners believe referrals are their lowest-cost method of acquiring new customers. In addition, 44% say referrals are the best customer acquisition strategy; however, among those respondents using a SaaS-based referral marketing system, that percentage jumps to 64%. (Web Profits)
  8. 78% of respondents say that customers acquired through the program are more loyal than other customers. (Web Profits)
  9. 78 percent of marketers say referral marketing leads to "good" or "excellent" leads. (Software Advice)
  10. 51 percent of the B2B professionals surveyed stated that a formalized referral program would increase the effectiveness of generating referrals and producing referral sales. (Statista)

Word of mouth marketing works

Word-of-mouth is one of the most effective ways to raise brand awareness. Of course, people are more likely to believe the information provided by their network than other types of paid media. Their experience and point of view are more authentic than a sponsored ad claiming you're the best.

On top of this, referred customers are more likely to stay loyal and make more purchases over time. This shows that customers may continue to patronize a brand if their friends and family do the same.

This is precisely why having a referral marketing program is invaluable to your business. Plenty of customers are already willing to spread the word about your brand, especially if they get rewarded in return. If you're looking for a surefire way to grow your business, you can't go wrong with word-of-mouth marketing.

We hope these word-of-mouth marketing statistics helped you evaluate why your business should incorporate a referral program into your marketing strategy. If you're looking for a surefire way to grow your business, you can't go wrong with word-of-mouth marketing.

How to get started with your word-of-mouth marketing strategy? Sign-up for their 30-day trial and launch your own referral program today.

By Genius Team