Relationship Marketing Strategy and implementation

Existing and former customer referrals

Within existing and former customers we can distinguish between
two subcategories: advocacy referrals (or advocate–initiated cus-
tomer referrals) and customer-base development (or company-initi-
ated customer referrals). We discussed the first subcategory in
Chapter 2 of this book. We introduced the relationship marketing
ladder of customer loyalty (see Figure 2.6) and briefly described the
role of advocates in assisting a company’s marketing efforts. An
advocate, a special classification of customer, was defined as
someone who actively recommends your organization to others,
who does your marketing for you. An organization’s existing or
former customers can play a key role in acting as a referral source.
The second subcategory of customer-base development relates to an
organization’s explicit attempts to use its existing customers, as part

The referral and influence market domains 223

Internal

Markets

Supplier &

Alliance

Markets

Recruitment

Markets

Influence

Markets

Referral Markets

Customer

Markets

Customer

Markets

Advocacy

referrals

Customer base

development

Incentive-based

referrals

Reciprocal

referrals

General

referrals

Staff

referrals

Figure 4.1 The referral market domain.

Source: Payne (1998).^1