Customer Referrals Drive Quick Conversions
It is no secret that customer referrals are valuable, but new data from Extole is shedding light on just how quickly they push customers through the purchasing cycle.
The data comes from an internal analysis of the campaigns from Extole’s retail customers. According to the findings, most customers (52 percent) who convert from a referral typically do so within 24 hours of the initial share. Comparatively, 13 percent of referral conversions happen between day two and day seven after the initial share. Referrals are most commonly shared by customers either via email or social.
“It’s not a mystery why referrals convert new customers with such speed. They cut through the brand noise consumers hear each day. With a referral program, brands can encourage trusted recommendations between friends, delivering a valuable incentive of their choosing as well as the instant gratification of reaping that benefit - be it a discount, point value, free shipping, or gift with purchase,” said Matt Roche, CEO and Founder, Extole. “What’s eye-opening for brands is not only the speed with which referrals convert but also that these customers are more loyal, more valuable over time, and more likely to refer in additional new customers themselves. It’s a win-win for any brands looking for new customers, but it also delivers long-term value and loyalty.”
It is also important to note the data found that referred customers have a 25 percent higher lifetime value and a three times higher conversion rate than non-referred new customers. Brands looking to acquire loyal customers and increase conversions should encourage referrals by including sharing technology and/or incentives that make it easy (and rewarding) for their customers to share referrals for products and services.