Referral Marketing versus Traditional Marketing and How They Work Together

Referral Marketing. We’re hearing about it more and more these days. But what is referral marketing exactly and how is it different from Traditional Marketing?

With Traditional Marketing strategies such as: pay-per-click, banner advertising, direct email marketing, EDM, direct mail, social media etc., you have to rely on other people to come to you.

In its simplest form, referral marketing is spreading the word about a product or service through a business’ existing customers, rather than traditional advertising or marketing strategies. Word-of-mouth marketing happens when others tell each other about a business. It is a critical part of referral marketing. Word-of-mouth is the principle behind things that “go viral,” for example, the Old Spice commercials featuring Isaiah Mustafa (tag line: “The man your man could smell like”) that were originally released on YouTube. At the time, this campaign, became the fastest growing online viral campaign ever, with 23 million views in 36 hours—and generated a sales increase of 107% for Old Spice in 2010.  ( This is the power of word-of-mouth.

Referral marketing has been around for ages, but it has changed a lot. It’s very different because society has changed, and even more so in recent years. We’re even busier and get bombarded with more and more messages every second. Referral marketing is important because it helps us to cut through the noise to reach our customers and clients. Traditional Marketing helps us build brand recognition so people are seeing us, so they’re familiar with us and so we stay front-of-mind. Referral marketing works, because when we are bombarded with a million brands, products and services – we listen to those we trust.

In a nutshell, referral marketing is when a relationship has been built and someone has said, “You should go here for this business.” That person now walks into your store because of the other person’s credibility. You have a greater chance that they will want to do business, and even more importantly – they’ll want to do it with YOU.

Now, does this mean cut out all your traditional marketing methods? Of course not! You need a balance of both traditional and referral marketing for your business to flourish.