Referral marketing is a word-of-mouth initiative designed by a company to incentivize existing customers to introduce their family, friends, and contacts to become new customers. It is different from pure word-of-mouth strategies which are primarily customer-directed with the company unable to track, influence, and measure message content. Referral marketing encourages and rewards the referrer for allowing a company to do so. Moreover, it is also different from multi-level marketing, there is no incentive for the original existing customer to drive or influence the subsequent referrals of the new customer – only the conversion of the initial, primary customer is rewarded.
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