Affiliate Marketing vs. Referral Marketing

AFFILIATE REFERRAL VS. MARKETING m THE COMMON GROUND Both affiliate and referral programs drive new customers to your business, can significantly increase revenue and provide a remarkable ROI on your internet marketing investment. TITHE DIFFERENCE,I In affiliate marketing, the advocate does not know their referred customer personally, and the primary reason for referring your brand is financial motivation. Referral marketing advocates recommend your brand to direct friends or family members and motivation is based on a strong relationship between the advocate and the potential customer. TII THE FACTS II 42% The Wharton School of Business found that a In 2012 alone, online referred customer has a affiliates have increased 16% higher life-time value. by 42% In a recent article from MSNBC.com, online affiliate #1 was voted the #1 job of 2012. 83% of satisfied customers are willing to refer U.S. Affiliate Marketing products and services. spending will reach $4.1 billion in 2014, up from $1.6 billion in 2007. 2007 2014 A University of Chicago study found that non- cash incentives are 24% more effective at 66% of affiliates are male, 34% are female. boosting performance than cash incentives. TII HOW IT WORKS I Affiliate signs up for Merchant affiliate Merchant identifies a list of customers who program. would be "most likely to refer a friend, relative or colleague." Affiliate uses an affiliate link in emails, Brand ambassadors use referral links to refer social networks & websites whenever they friends, business network, and family to the mention the merchant. product or service. 50% Merchant tracks affiliate links all the way to Merchant tracks referrals through a referral final purchase and rewards the affiliate marketing software, and rewards brand with cash and other financial incentives. ambassadors with incentives such as discounts, cash & other premiums. TII PROS & CONS 1II EXPENSES Merchants often pay a portion of revenue to the middlemen, the biggest one being the Referral marketing reduces your sales expenses and sales cycle. affiliate network Merchants have the benefit of only paying Referrals can build your level of satisfied customers. The cycle self-perpetuates with more satisfied customers referring others to when an affiliate produces a sale. your company. VS Brands may be misrepresented in the market place by affiliates who don't have a close tie-in Closing ratio for non-qualified leads is 10 percent versus a 60 percent close ratio with the brand. with referred leads. TII TIPS II Know Your Audience Be Trustworthy Stay Relevant If your affiliates break reader's trust by promoting a product they don't believe in or take advantage Make sure the affiliates you Check up on your affiliate partner with can anticipate partners. Make sure they are and meet the needs of your up to date on your most recent customers. of their visitors with too many ads, offerings, deals & promotions. they will lose respect with the communities they influence. REFERRAL Type of Customer Give and You'II Receive Rewards Program Provide a clear picture of the Give your clients extra service and Provide special rewards to your customer demographics to your referral network. follow-up support before asking referring customers on a regular basis. If a customer for referrals. Satisfied customers are more willing to share. provides you with 5 sales, offer them something special, e.g. discounts. SOURCES Saleschase.com, SugarRae.com, About.com, Sales Perspectives for Dummies by Tom Hopkins, KAmbassador getAmbassador.com, sigmabeautyaffiliates.blogspot.com, Forrester.com, Benchmarkemail.com, LetsTalkSeo.com A Referral Marketing Software ロ