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Business Definition for: referral
Dictionary of Marketing Terms
referral

name of a prospective customer (or member, donor) acquired from a current customer or other third party. Most referral programs offer the customer an incentive award for referrals, particularly for referrals that become customers. For example, air travel clubs offer bonus mileage. Referrals generally respond to promotions at a much higher rate than other prospects, but the response rate decreases as the average number of referrals per customer increases. Studies show that customers who give many referrals tend to include people with little or no likelihood of interest in the product.

See also friend-of-a-friend , member-get-a-member (MGM)
Dictionary of Real Estate Terms
referral

the act of suggesting the use of a certain broker .

Example: Smith receives several listings based on referrals from former customers.

Example: A broker agrees to pay a 1% referral fee to out-of-state brokers who suggest families that are moving into the area.

Dictionary of Business Terms
referral

  1. suggesting the use of a certain professional, company, or broker.
  2. suggestion that leads to hiring a certain employee.

Related Terms:
friend-of-a-friend

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.

member-get-a-member (MGM)

organization or customer recruitment technique that offers an incentive to current members for referring new members. For example, book club MGM promotions offer discounts on books to members who successfully recruit new members.

Copyright c 2000, 1994, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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