Affiliate vs Referral Marketing






When looking at both affiliate and referral it's easy to see similarities between the two techniques. However, their key differences are also apparent and the below information will highlight this.

Common ground shared:

Or course, as with any business you'll want to drive more customers to your website, increase company revenue and witness a good ROI on Internet Marketing Investment. Both affiliate and referral techniques will do this for you.

But was IS the difference?

Affiliate marketing is based on financial gain. The advocate does not know the referred customer and it could be as simple as the consumer clicking on a link. In most cases the affiliate will earn a set fee for each recommended customer.

Referral marketing is all to do with word of mouth. Brands will need to perform at consistently high standards to achieve excellent results as it means that your previous customers' friends and family will need to recommend you.

The Facts

Affiliate marketing is on the rise and in 2012 alone, affiliates increased by a massive 42%

According to statistics, 66% of affiliates are males compares to the 34% females.

As much as 83% of happy customers will refer your product or service

A referred customer has a 16% higher lifetime value, according to research from the Wharton School of Business

How they work

1 Potential affiliates sign up to a dedicated scheme which rewards the supply of extra customers

2 They use emails, social media and their own websites to promote a service

3 All customers received from affiliates are monitored to the final purchase, before rewarding the affiliate with financial incentives





1 A list of past consumers are compiled who would be most likely to recommend friends and relatives for the product or service

2 These 'brand ambassadors' will then use links to refer the product or service, which is tracked for success rates

3 Marketing software is used to calculate the success of referrals and incentives including discounts and cash payments are offered





The Benefits

Affiliates will only receive payment for each consumer pulled through to a sale.

Affiliates can choose which marketing works best for them; whether it's email campaigns, social media, SEO or PPC.

Companies can have a range of affiliate partners providing a healthy supply of new customers.

Using referral marketing will reduce your sales expenses and is an effective way to promote your product or service.

With referrals you'll build up a larger network of satisfied consumers. This will increase in size for every customer recommending you.

Non-qualified leads have an average conversion rate of 10%, whereas referred customers can hit the 60% mark.


Top Tips for Success

Remember your target audience:

You need to make sure your affiliates can meet your needs and target an audience relevant to your product or service.

Ensure trustworthy credentials:

Customers need to have trust in your product so this needs to remain at the top of your agenda. Trust is lost with too many ads or promotion of a product with no belief.

Always keep relevance:

Online marketing is always changing so it's imperative to remain relevant and keep up-to-date with all offers, promotions and deals.

Type of customer:

With a referral system you need to clearly state your target audience and customer demographic to ensure optimal success.

Give and receive:

In order to ensure a satisfied customer it's important to follow-up any support you offer, before asking for their help. Satisfied customers will be more willing to lend a helping hand in the future.

Provide a rewards programme:

With a reward on offer, customers are more likely to refer your product or service. For example, for every five new consumers recommended the referrer will receive a cash incentive or discount on their next purchase.

Affiliate vs Referral Marketing

shared by Quotatis on Jun 20, 2013 in Business

Affiliate vs Referral Marketing

shared by Quotatis on Jun 20, 2013 in Business


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An infographic explaining the similarities and differences between affiliate and referral marketing and the pros and cons of each.
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