Referrals versus Word of Mouth: What’s the Difference?

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Referrals and word-of-mouth marketing are distinct yet powerful strategies for advisors to build trust and acquire new clients. By understanding their differences and leveraging both approaches, you will maximize client acquisition through personal connections and a positive reputation.

Let’s dive into these differences and explore how you can use both approaches to your advantage.

Referrals: Personal connections and direct recommendations

A referral occurs when one of your clients recommends you to a prospect, often based on a positive experience they had working with you. This recommendation is rooted in a personal connection between you and the client. Since the prospect is receiving a trusted recommendation, it can be a strong motivator for them to give you a try. Referrals are often the result of excellent client service, relationship building, and exceeding client expectations.

To encourage referrals, make it a priority to build strong relationships with your clients. Maintain regular contact with them through various client communication channels and by hosting events. Ask for referrals directly. The key to getting referrals is to provide exceptional service that makes your clients want to recommend you to others.