Key Highlights:
- Referrals significantly influence buying decisions, with word-of-mouth playing a central role in discovering brands.
- Authenticity in referrals contrasts with the perceived inauthenticity of ads, leading to greater trust in personal recommendations.
- The article argues for a quantitative approach to understand referrals’ impact, moving beyond personal, anecdotal evidence.
- A partnership with Nielsen’s Harris Poll Online and a survey of 2,000 Americans revealed surprising insights into referral marketing.
- Findings indicate that referrals are not industry-specific, affect various demographics differently, and are a crucial decision-making factor.
- More than 80% of Americans are influenced by recommendations for purchases, and social media shares correlate with buying behavior.
- Incentive structures are important for boosting referral activity and can scale up the effectiveness of referral marketing programs.
- The data suggests referrals are often the primary driver in purchase decisions, underscoring their importance in marketing strategies.
Understanding Referrals for Marketing
It’s not exactly controversial to suggest that referrals influence customer buying decisions.
Most of us have sought input from our network when making a big purchase, or we’ve taken a chance on a new company after hearing a friend or family member rave about its products and services.
This is exactly how many of us discovered brands like Uber and Airbnb (two hallmark examples of referral marketing) and it makes sense why we value this form of “marketing” so much.
Referrals, after all, tend to come from a very genuine, authentic place. The same isn’t usually true of ads or branded content.
That said, here’s the problem with that perspective: It’s qualitative.
While drawing from our own experience helps us contextually understand why referrals are important, it doesn’t really tell the full story. That’s because it’s anecdotal and experiential, not quantitative.
It’s color on a page without any real structure, which makes it difficult to understand how important word-of-mouth really is and what we can do to better leverage it.
Key Findings from a National Harris Poll Survey
Earlier this year, we set out on a mission to fill in that detail.
Thanks to a partnership with Nielsen’s Harris Poll Online, we surveyed 2,000 Americans about a number of questions related to word-of-mouth and referrals.
When the results came in, even our team — which lives and breathes referral marketing — was surprised by the data.
Most notably, our research with the Harris Poll showed that:
- Word-of-mouth isn’t limited to specific industries (i.e., it’s not just for eCommerce brands) or demographics, but certain age groups and income levels do rely more on referrals
- The vast majority (more than 80%) of Americans seek recommendations when making a purchase of any kind
- When someone shares or talks about a brand on social media, there’s a significant correlation to purchasing behavior
- Incentive structure plays a big role in increasing and scaling referral activity
That’s just a sampling of our findings, but the general conclusion from the study was clear. Referrals don’t just help us make decisions. Often times, they’re the primary driver of them.
Ready to Dive into the Data?
Check out the infographic we created below to see just how much word-of-mouth and referral marketing play a role in customer decision-making.
How is your company leveraging referrals to drive revenue?
If you don’t have a referral marketing program and you’d like to learn more about how to build and manage an effective one, check out our latest eBook, “More Referrals, Less Hassle: The Modern Marketer’s Field Guide to Building a Highly Productive Referral Marketing Program.”