What’s the difference between referrals and word of mouth? A referral is when someone recommends or introduces you and your services to someone else. Referrals are very important to the growth of any business and knowing the difference between a good referral and a poor one is vital. Word of mouth is business generated from your reputation and a customer’s knowledge or perception of your business. This document will help you monitor your referrals and word of mouth. Just like any other form of marketing this is twice as effective and therefore just as important to know where your business is coming from.