Business Glossary

promotion similar to member-get-a-member that offers an incentive for referring a third party to the seller; also called third-party referral. It differs from member-get-a-member promotions in that the person making the referral is not necessarily a customer; however, most friend-of-a-friend promotions are directed to current or new customers. This is an inexpensive way for direct marketers to identify their best prospects, assuming that those receiving the promotion will only refer friends likely to be interested in the product or service being sold. catalog houses frequently offer a discount on future purchases to individuals who request a catalog for a friend, although this offer might be contingent upon the friend's making a purchase. This type of promotion is also a popular technique of airline travel clubs that award mileage credits in exchange for referrals.