Don’t Underestimate the Power of Customer Referrals

Companies that systematically track referral behavior uncover a powerful, underutilized growth engine. An analysis of more than 10 million consumers reveals that while about 20% of new customers come through referrals, they account for 72% of the profits all new customers generate. Referred customers cost less to acquire, stay longer, buy more, and refer more high-value customers to your company. Yet most firms overlook them because attribution systems give too much credit to paid channels and fail to capture word of mouth. Leading companies, however, treat referrals as a growth metric, invest in identifying true promoters, and design experiences that inspire recommendations. By shifting the focus from buying customers to earning their advocacy, these companies improve margins and build more-durable, cash-generating growth businesses.

Raccontata dahbr.org