Recommendation Rate

Referral rate is a measure of how many of your customers would recommend your product or service to others. It is often expressed as a percentage and shows what proportion of your customers would be willing to recommend your company to others.

Recommendation rate

Why is the recommendation rate important?

Customer satisfaction is closely related to the recommendation rate. Satisfied customers tend to share positive experiences with others, attracting new potential customers. Therefore, a high recommendation rate may indicate high customer satisfaction.

In addition, a high referral rate can also help grow your business. Because word of mouth is a very effective form of marketing – it costs nothing and often has higher credibility than paid advertising.

How do you measure the recommendation rate?

To measure the recommendation rate, you can simply ask your customers: Would you recommend our product/service? You can ask this question in a survey or include it in a feedback form on your website.

The answers can then be rated on a scale of 1 (would not recommend) to 10 (would definitely recommend). Customers who give 9 or 10 points are considered promoters. Those who give 7 or 8 points are considered Passively Satisfied and all below that are Critics.

You then calculate your recommendation rate as follows: (number of promoters – number of critics) / total number of respondents * 100 = % recommendation rate

How can you improve the recommendation rate?

There are several strategies for improving referral rates. One of them, of course, is to improve the customer experience. This can be achieved through better service, higher quality products or faster feedback.

Another option is to set up a referral marketing program. In doing so, your existing customers receive an incentive (e.g. a discount or a gift) when they refer new customers.

In addition, you should always make sure to proactively address negative experiences and offer solutions – because nothing hurts the willingness to recommend more than unresolved problems!

Conclusion: The value of word-of-mouth advertising

Referral rate is a valuable tool for measuring customer satisfaction and the potential for organic growth through word of mouth. By continuously monitoring this key indicator, you can ensure that your company stays on track – for the benefit of your existing as well as future customers.