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Why Referral Marketing

Referral Marketing—being personally introduced to a prospect—results in business 80% of the time. Think about it. We get the number for the contractor that just remodeled our neighbor’s kitchen, ask a friend for a day-spa recommendation, or try the new restaurant our co-worker raved about. Word of mouth is the primary factor behind 20 – 50% of all purchasing decisions.


1). People are four times more likely to buy a product or service when it’s referred by a friend. (Nielsen)

2). Referrals are the most trusted form of advertising, with 92 percent of consumers reporting that they completely or somewhat trust referrals from people they know. (Nielsen)

3). Companies with formalized referral programs experience 86 percent more revenue growth over a two-year period when compared to the rest. (Wharton School of Business, 2010 data)

4). Referred customers have a higher customer lifetime value and typically produce higher margins than other customers. (Christophe Van den Bulte, a professor at Wharton)

5). When considering the purchase of a product, 84% of shoppers trust recommendations from family members, friends, and colleagues. (Source: Annex Cloud)

While traditional advertising is still useful, word of mouth from everyday Joes and Janes is at least 10 times more effective. Word of mouth advertising is more effective than traditional advertising for two key reasons:

A.) It’s more persuasive. Traditionally advertising trys to convince you that their product or service is the best. Our friends, however, tell it to us straight. Their objectivity and candor makes it easier for us to trust, listen to and believe our friends.

B.) Word of Mouth is more targeted. Traditional advertising trys to reach the largest number of prospects that the marketing budget will allow. Word of mouth is naturally directed to an interested audience… to people who are interested in the product being discussed.


6). Word of mouth affects the purchase decision of 54% of consumers. It’s the most influential psychological driver for purchases. (Source: Adweek)

7). Customers referred by a friend or other customers have a 16% higher lifetime value than non-referred ones. (Source: Saasquatch)

8). The average referring customer invites an average of 2.68 people. (Source: Saasquatch)

9). Social media posts published by friends influence 81% of US shoppers’ purchase decisions. (Source: Forbes)

10). Referral advertising on social media influences 71% of consumers. (Source: Forbes)

SourceReferral.com is the first membership referral website serving the greater Inland Empire. By bringing together quality businesses we create a hub for prospective buyers to find businesses in our six key categories:


SourceReferral.com provides the tools to help elevate your business. We assist in determining two offers to entice your buyer and to nudge your happy customers into actually taking that step and introducing others to your business. Once they have signed up in our system, our Affiliate users can refer your business to their friends and family. Your business will reward the Affiliate when the referral is activated and the sale is confirmed. Your new client will be incentivized with product discounts, upgrades or bonuses (the choice is yours) when they act on the referral.

Rewards can be anything from:

  • Discount off next/first order
  • $X gift card for referring a certain number of people
  • Straight up paying people for referrals
  • Bonus gifts with next order for referring people

We work with you to adapt your referral program until you maximize your product market fit. In addition, we facilitate the connections between the Affiliate and prospective new clients by making it super easy to share via email and social media.


11). Do companies with referral marketing need to offer incentives for referring? – 70% of people open emails from a company in search of a deal or a coupon. (Source: Campaign Monitor)

12). 88% of US shoppers would like a reward for sharing a product on social media or via email. The same goes for 95% of 18-34-year-olds. 77% of them want money, while 18% want free swag for referring. (Source: Campaign Monitor)

13). 82% of SMB owners cite referrals as the primary source of new business. (Source: Influitive and Heinz Marketing)

14). 83% of customers are more likely to refer new customers after positive user experience. (Source: Forbes)

15). Referral advertising on social media influences 71% of consumers. (Source: Forbes)

Is your business ready to launch a Word of mouth Advertising program? It’s imperative to start with the basics. It doesn’t matter how many marketing consultants you hire, amazing ecommerce conferences you attend or new age growth hacks you try. If you can’t provide a quality experience for customers and run a tight operation then you’ll fall short somewhere along the way.

If your business is “referral worthy” talk with a SR representative to get your never-ending customer pipeline set up today.