Referrals are trusted more than online reviews and lead to customers that spend more and are more likely to refer others - but it depends on the stage you’re in.
Referred customers make up to 71% more referrals than non-referred customers and are more likely to convert to high-value customers.
People were 26% less likely to buy a product again when they recommended it to a friend but that friend didn’t buy it.
Science-based insights to improve a customer reactivation campaign for an online team-building activity
Science-based insights to improve a customer reactivation email of an audiovisual equipment rental marketplace.
Earning a coupon by doing an activity with friends makes people up to 21% more likely to buy from you using the coupon.
Money rewards hurt the social motivation of recommending a product, unless they are for a strong brand. Non money rewards (e.g. a small gift) give better results for all brands.
Large referral rewards (e.g. Get $50 if you invite a friend) boost the referral rate (+750% in one experiment) but lower the average profitability of newly referred customers (-48%).
Net Promoter Score (NPS) is often called “The One Number You Need to Grow”. This is false. But it can predict growth if you survey all your potential customers and track its changes over time.
Gifts to customers without strings attached (e.g. spend at least $50) and without a hidden agenda (e.g. to convince someone to buy) increase word of mouth.
Use an altruistic CTA for your referral program (“give $20 off to a friend”). It increases likelihood of referrals by 60% and total referrals by 86% compared to the most commonly used CTAs.
Referral messages that say the sender already bought the product increase conversions by 11%. Messages that include an incentive for further referrals lead to 53% more referrals.
