Referral marketing

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1 Introduction
2 As a subset of word of mouth marketing
3 Different Types of Referral Marketing
4 Associations Involved with Referral Marketing
5 Publications Available on this Topic

[edit] Introduction

Referral marketing is a term that pre-dates the Internet. It is a marketing and sales technique used by businesses that encourages people to pass on a sales message to other potential customers. Referral marketing works because the recipient of a sales message is more likely to open an email from a friend than from a sales person.

A successful referral campaign is a word of mouth marketing campaign that motivates customers to talk about and recommend your business -- with a specific objective in mind. The objective can be to recommend a friend to do business, sign-up for an e-newsletter, visit a web site, or any goal a company is trying to accomplish.

[edit] As a subset of word of mouth marketing

It’s common to think that word of mouth marketing and referral marketing are the same thing; or distinct without being different. But there is a difference between the two.

Referral marketing is focused: it is a distinct type of word of mouth marketing that enables a satisfied customer to refer others to that business.

Word of Mouth Marketing, on the other hand, encompasses dozens of marketing techniques that are geared toward encouraging and helping people talk to each other about products and services.

Word of mouth is more about giving people a reason to ask about your products or services; referral marketing presumes there are already many good reasons to talk about your business, and simply gives satisfied customers an avenue through which they can easily communicate this satisfaction with friends.

[edit] Different Types of Referral Marketing

Referral marketing has many different techniques. It has traditional offline applications. These offline applications have also been optimized for the web.

In the offline world, there are a number of systems that can be used to generate more referrals. One system, authored by DuctTape Marketing's John Jantsch is available at [1] Other material from other authors is freely available as well.

Inc. Magazine examines the use of satisfied customers to pass along your message and to generate referrals in this series of articles:[(http://www.inc.com/guides/marketing/20686.html)].

In the online world, tools such as ReferNow [(http://www.refernow.com)] offer a dashboard for the creation, management and measurement of referral marketing campaigns.

Other tools, such as those provided by http://www.ereferralmarketing.com/ and http://www.moleresourcing.com offer tools that can be used to conduct an employee referral campaign.

Another variation of online referral marketing is a form of Affiliate Marketing. In Affiliate Marketing, traffic referrals are normally redeemed for cash, goods or services. Referral sites offer 'free gifts' which can be obtained by people signing up to the site and then referring other people to the site through their link. Once the people have signed up they need to complete an offer. The offers are run by firms wanting to attract people to the site, and so pay the referral site a fixed amount per referral they generate. A link to a referral site looks like this: [[2]].