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Sales Glossary

The sales industry is always changing and evolving. Keeping on top of those changes can be tough. The Vidyard Sales Glossary is your ultimate guide to important sales terms, definitions, concepts, slang, insider business jargon and more to keep you up to date with the latest in sales industry lingo.

What is a Referral?

A referral – also called a business referral or sales referral – is when an existing customer gives you information to contact a new prospect. Your existing customer will either give you (the sales rep) details to directly reach out to the new prospect, or they will give your contact information to their colleague to reach out to you.

Either way, a referral indicates that the existing customer is happy with your product and thinks someone else will benefit from using it too.

Why are Referrals Important?

Referrals are important for sales teams for many reasons. They help with prospecting, building trust, and engaging with new audiences. Let’s take a deeper look at some common benefits of sales referrals.

New Prospects

Receiving referrals means more prospects are entering your sales pipeline. They may be from an audience you’ve never targeted before, or come from a company you’ve tried to sell to before. Either way, it’s an opportunity to form a new relationship and make a new sale.

Low Cost

Referrals cost you nothing. There’s no investment in time or resources because they happen organically. The more referrals you get, the more time you save on prospecting that you can allocate elsewhere.

Simpler Sales Cycle

Selling to referrals is easier because they’ve heard about the product from the person who referred them, or they work at a similar business as the referrer, so your product is an obvious, easy fit for them.

For a sales rep, referrals are simpler because there are less steps involved. There’s no prospecting stage, so you can dive right into introductions and getting to know their business and goals, and focus on how your product will help. Closing ratios tend to be higher with referrals as well.

More Trust and Customer Satisfaction

If an existing customer is sending you referrals, that indicates they’re happy with your product and think others could benefit from it too. Positive reviews and referrals go a long way and show new prospects that your company can be trusted, and is respected and valued.

More Referrals

An existing customer who gives one referral is likely to give more. The happier they are, the more they’ll recommend you and your product to others. And the new customers you’re able to sign on that were referred? If the process goes well and they’re happy with the product too, guess what? They’ll start sending even more referrals your way.

How to Get Referrals

There are a few tactics sales teams can employ to ensure they get referrals.

Keep Customers Happy

Engage with your existing customers, ensure they’re happy with your product, and help troubleshoot any issues they may be experiencing. If you exceed expectations and go above and beyond the bare minimum, they’ll be impressed and more likely to send referrals.

Create an Incentive Plan

Who doesn’t like incentives? Many companies offer incentives or create referral programs for their existing customers. Consider offering a discount on renewals, or a free upgraded feature for customers that send successful referrals.


Sometimes all you have to do is ask.

Don’t go asking every single customer for a referral. Instead, target the ones you have a solid relationship with and know are satisfied with your product.

As with everything else in sales, communication is key when it comes to scoring referrals. If a customer mentions they’re happy with their experience, follow up and ask if they know anyone else who would benefit from it as well.

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