by CrewFire -
Known by many names (word-of-mouth, referral marketing, viral marketing, ambassador marketing, influencer marketing, etc.), peer-to-peer marketing refers to the brand-related conversations held between consumers. These conversations can be organic or incentivized by the brand and hold a special place in the minds of marketers as one of today’s most effective promotional channels. They’ve even been called the “future of reaching people” and the “most powerful force in marketing.”
But just what is it that makes peer-to-peer marketing so effective? We’ve dived into the research—and boy is there a lot of it—to get to the heart of the matter.
Without further ado, here are 50 statistics that help explain why everyone is talking about P2P marketing:
There’s no escaping the power of peer-to-peer marketing
Even if you don’t have a dedicated peer-to-peer marketing program in place, your business is bound to be already reaping the benefits of customer evangelism. Check out these shocking stats on just how much customers talk about their favorite brands:
- There are approximately 2.4 billion brand-related conversations everyday in the United States alone. [WOMMA]
- The average consumer mentions specific brand names 60 times per week in conversations. [TalkTrack]
- 82% of consumers proactively seek referrals from peers before making a purchase. [B2C Community]
- 92% of consumers trust referrals from people they know. [Nielsen]
- The average small business gets 60% of its customers from referrals. [Kissmetrics]
Your competitors are already investing in peer-to-peer marketing
For many brands, P2P isn’t just another marketing channel. It’s a necessity for staying competitive and growing market share. After all, if customers are going to rave about a brand, you’ll want make sure it’s your own and not a competitor’s.
- Influencer marketing was rated as the fastest-growing customer acquisition channel in a survey of 125 online marketers. [Tomoson]
- Companies with formalized referral marketing programs saw 86% more revenue growth over the past two years when compared to those that have yet to formalize. [Heinz Marketing]
- 79% of brands are planning to increase their investment in online word-of-mouth marketing, and 29% plan to increase their offline word-of-mouth spend. [WOMMA]
- 84% of marketers plan to employ at least one influencer marketing campaign in the coming year. [Schlesinger Associates]
- 73% of enterprise companies have a dedicated budget for influencer marketing. [Forrester]
- Marketers that use tools to power their referral programs are 3x more likely to accelerate referral flow, yet only 22% have a tool in place to effectively scale peer-to-peer marketing. [Heinz Marketing]
Social media is the premier battleground for peer-to-peer marketing
While marketers often associate word-of-mouth with offline conversations, more and more of these conversations are happening across your customers’ preferred social networks. And, for marketers, this is nothing but good news—as you now have a way to measure, reward, and respond to word-of-mouth.
- 5% of brand advocates recommend brands to others on Facebook. [Syncapse]
- 81% of consumers report social posts from their friends and peers directly influencing their purchasing decisions. [Market Force]
- When it comes to sharing news about online purchases, 55% of shoppers choose Facebook, 22% select Twitter, 14% prefer Pinterest, and 5% Instagram. [Fedelta]
- 59% of Pinterest users have purchased an item after seeing it on the site, and 33% of Facebook users have made a purchase after seeing something in their news feed or on a friend’s wall. [Steelchart]
- Twitter users report a 520% increase in purchase intent when exposed to promotional content from influencers. [Twitter and Annalect]
- 65% of social media users indicate using social networks to learn about brands, products, and services. [Nielsen]
Social media drove 31% of all site traffic in 2015. [Shareaholic]
- The average value of a Facebook fan is $174 for select consumer categories like, exceeding $300 for retailers like Zara and HandM. [Syncapse]
- 43% of social media users report having purchased a product after sharing or favoriting it on Facebook, Twitter, or Pinterest. [VisionCritical]
- 40% of consumers say they’ve purchased a product after seeing it used by an influencer on YouTube, Instagram, Twitter, or Vine. [Twitter and Annalect]
It’s not (just) a millennial thing
It’s no secret that millennials place high importance in referrals and online reviews when comparing products or making a high-consideration purchase. However, they’re far from the only generation engaging in peer-to-peer marketing.
- Millennials (those born between 1980 and 2000) and baby boomers (those born between the mid 1940s and 1960) alike ranked word-of-mouth as the #1 influencer in their purchasing decisions for big-ticket items. [Radius Global]
- Generation X (those born between 1960 and 1980) spends more time on social media than any other generation, averaging a whopping seven hours per week. [Nielsen]
Peer-to-Peer Marketing is key to amplifying your reach
In what we call ‘the battle for the eyeballs,’ peer referrals are just what the doctor ordered for getting in front of your target customers. They break through the noise in a way that paid media and other marketing channels just can’t keep up with.
- Word-of-mouth marketing has been shown to increase marketing effectiveness by as much as 54%. [MarketShare]
- 49% of consumers indicate friends and family as their top source of brand awareness. [Jack Morton]
- Earned media (press, word-of-mouth, peer-to-peer referrals) drives 4x the brand lift as paid media. [Bazaarvoice]
- Word-of-mouth impressions drive sales 5x greater than the equivalent number of paid impressions, and this discrepancy greatens for high-consideration purchases. [WOMMA]
- Referred customers are 400% more likely to refer customers to your brand than non-referred customers. [Extole]
Consumers don’t trust traditional marketing.
Of course, it’s not just about getting in front of your customers. It’s also about earning their trust. Today’s consumers are both increasingly skeptical of traditional marketing channels and increasingly elusive when it comes to reaching them by paid means, like online advertising and TV commercials.
- Only 15% of consumers trust content created and shared by companies. [Forrester]
- Only 33% of consumers trust the messaging conveyed in online ads. [Nielsen]
- Only 22% of brands are trusted by consumers. [Havas Media]
- There are 615 million devices with some sort of ad blocker installed, with 30% of consumers blocking ads on at least one site. Peer-to-peer marketing presents a way to reach these previously unreachable consumers. [PageFair]
- TV viewing among 18-24-year-olds is decreasing by 7.1% each year, falling more than 39% since 2011. [Nielsen]
…but they do trust peer-to-peer marketing.
Fortunately, there is one channel consumers continue to trust: Word-of-mouth. By having your message come from people, rather than corporations, peer-to-peer marketing takes roots in pre-established lines of trust that add the invaluable element of social proof to your marketing message.
- 84% of consumers say they trust recommendations from family, friends, and colleagues, making peer recommendations the highest-ranked information source for trustworthiness. [Nielsen]
- 43% of people rank authenticity over content when consuming media. [Forbes]
- Consumers highly value recommendations even if they do not personally know the reviewer, with 88% indicating they find online reviews as trustworthy as personal recommendations. [BrightLocal]
- Consumers rely on peer-to-peer marketing 2-10x more than paid media. [Boston Consulting Group]
- 88% of business-to-business (B2B) buyers consider online word-of-mouth as a key source of information and advice. [BaseOne]
- Non-celebrity influencers (‘micro-influencers’) are 10x more likely to drive purchase intent than celebrities. [Collective Bias]
- 54% of people believe the smaller the community, the bigger the influence. [Technorati]
Peer referrals mean $$$
For brands, this all means one thing: Revenue. Referred customers typically cost less to acquire, convert easier, stick around longer, and have a higher lifetime value than that of your average customer.
- On average, brands generate a 650% ROI for every dollar invested in influencer marketing. [Tomoson]
- People are 4x more likely to make a purchase when referred by a friend. [Nielsen]
- Peer-to-peer marketing is the leading driver behind 20-50% of all purchasing decisions. [McKinsey]
- Conversion rates for word-of-mouth recommendations are 3-5x higher than those of non-referred prospects. [WOMMA]
- The lifetime value (LTV) of a new referral is 16% higher than that of your average customer. [Wharton School of Business]
- Customers referred by other customers stick around 37% longer than non-referrals. [Deloitte]
- Influencer marketing tied with email marketing to rank the #1 most cost-effective customer acquisition channel in a survey of 125 marketers. [Tomoson]
- 87% of sales reps identify referrals as the best leads a business can get. [Heinz Marketing]
- 94% of brands employing influencer marketing programs found them to be effective. [AdWeek]
- 74% of consumers consider peer-to-peer marketing to be a key influencer in their purchasing decisions. [Ogilvy, Google, and TNS]