For many solo professionals, having a business model based solely on referrals is a matter of pride. If you receive a sufficient number of referrals to be selective, you are very lucky. In the long run, identifying your best prospects and pursuing them is better for your business.
If your customers give you many referrals, then you need to educate customers about who you can help. They may turn out to be a sales force you can't control, sending you unprofitable clients you can't please.
Red Lemon Club: Why World of Mouth Promotion is Harming Your Creative Business, 2014-Mar-25 by Alex Mathers
Word of mouth leads to settling for less, because you have not gone out and chosen those clients, they have come to you, and very often they will not be suited to your service. More often than not, you will accept doing work for them because they pay you, and especially if someone you know recommended you to them. You can’t often say no.
The trouble is, they are unlikely to be the very best suited to your product or service with the budgets to match what you are really worth.
By all means make use of word of mouth as one of several tools to bring new clients into your business.
Just realise that it might not be the sharpest tool in the box.