Referral

A referral occurs when an existing customer recommends your product/service to someone in their network who might be interested in it.

This means your existing customers help you generate new business leads either by recommending them to contact you or by providing their contact details directly to the salesperson.

Sales referrals may also take place in outreach – when you contact a person at a target organization and ask them to direct you to the decision maker.

Related terms:

• Referral selling is a sales tactic that relies on the existing customer base as the main source of new business leads. This typically includes offering certain incentives or bonuses to the customers in exchange for each lead they bring in.
• Word of mouth is a marketing strategy that relies on person-to-person communication to spread the information about a company or its products/services and as a result, generate interest and bring leads.