Why Word-of-Mouth Wins

The numbers are clear. Recommendations from trusted friends and family beat traditional marketing in every way that matters.

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5×

More Likely to Become Customers

16%

Spend More Over Time

60%

Lower Cost Per New Customer

Far More People Actually Become Customers

People who are referred by a friend are not just slightly more likely to become customers, they are dramatically more likely. Traditional ads struggle to get past single digits, while warm referrals reliably hit double digits.

~11%

Average sign-up rate from referrals

Compared to just 2.35% across all marketing put together.[1],[6]

5×

More likely to become a customer

Referred people are five times more likely to become paying customers.[2],[5]

Better Customers, Not Just More Customers

Referrals don't just bring in more people, they bring in better ones. Research from Wharton Business School and other institutions shows that customers who came through a friend are more valuable from start to finish.

16%

Spend more over time

Customers who came from a referral spend much more with your business over the long run.[4],[7]

25%

Spend more on their first visit

Customers who came from a referral spend more from day one. They are ready to buy.[5],[7]

37%

Stay longer

Customers who came from a referral stick around longer, so you spend less time finding replacements.[3],[7]

Each New Customer Costs You Much Less

Every pound you spend on referrals works harder. Because referred people are quicker to say yes and stay longer, the cost of winning each new customer drops a lot compared to paid ads.

60%

Lower cost per new customer

Referral programmes bring in customers at a fraction of the cost of traditional advertising.[1],[6]

86%

Of people trust friend recommendations over ads

Trust does the heavy lifting. You spend less convincing people who already believe in your service.[1],[2]

75%

More likely to buy after a friend shares a link

When a friend shares a recommendation, three quarters of people who see it are more likely to buy.[2],[5]

Traditional Marketing vs. Word-of-Mouth

	Traditional Marketing	Word-of-Mouth Referrals
How many become customers	About 2.35% average	About 11% average[1],[6]
Trust	Low. People are tired of ads.	High. Recommended by a friend.[1],[2]
Spend over time	Baseline	16% more[4],[7]
Cost per new customer	High and rising	60% lower[1],[6]
How long they stay	Standard	37% longer[3],[7]
Spend on first visit	Baseline	25% more[5],[7]

Sources & Research

The data on this page is drawn from the following industry research and publications:

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