Referral Selling

Posted in Marketing and Strategy Terms, Total Reads: 2646

Definition: Referral Selling

Referral selling refers to a condition when a customer is persuaded to buy goods or services by making promises of a commission, rebate or other benefits by supplying information about other potential customers that helps the trader or the supplier sell to other consumers. This type of selling is the basis of all direct selling but the customer does not get the promised benefit unless new customers are acquired through referrals after the agreement is made.

While building a referral selling, following important points to be kept in mind

1. Referrals must always be the priority.

2. Metrics must be in place

3. Referral selling should be an activity on a daily basis.

4. Skill development is necessary.

5. It is vital to overcome the fear of rejection


Customer ABC wanted to join an adventure club but was worried about the cost. Before ABC signed up, the club offered a 10% rebate on an 18 month membership if ABC gave the club the names, telephone numbers and email ids of five of ABC friends and those five friends took out a membership. This is one of the forms of referral selling.


Hence, this concludes the definition of Referral Selling along with its overview.

Browse the definition and meaning of more terms similar to Referral Selling. The Management Dictionary covers over 7000 business concepts from 6 categories. This definition and concept has been researched & authored by our Business Concepts Team members.

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