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Affiliate Marketing vs. Referral Marketing


Affiliate Marketing vs Referral Marketing

These two forms of marketing looks similar, but there are striking differences. This article highlights the differences between these two forms of marketing. Basically, both marketing styles aims to drive more customers to the business and increase the return on investment.

What is the Difference?

Affiliate: The main purpose of affiliate marketing is financial gains, the consumer is now known to the affiliate marketer as it is in some cases, and all the consumer needs to do is to click on a link. The affiliate earns a commission for each client recommended.

Referral: For referral marketing, it has to do with talking. For brands to succeed, they need to maintain the high standards consistently so you can be recommended by friends, family, relatives and previous clients.

The Facts

Affiliate: This form of marketing is on the rise. It increased by 42% in 2012 alone. Judging from statistics, females form 34% if affiliate marketers while males form 66%.

Referral: If your customers are happy, as much as 83% of them will refer your services to others. According to a research conducted by Wharton School of business, when a customer is referred, he has a 16% life time value.
How does it work?


• For potential affiliates, they sign up with a reliable scheme that rewards the supply of more clients.
• Affiliates makes use of their own resources to promote the products
• When a client is secured, that client is monitored till he/she makes the final purchase before the affiliate is rewarded with a financial incentive.


• A list of client is compiled. These are clients that would recommend a service to a friend or relative.
• The Brand Ambassadors refers the product or services using the link and the entire process is tracked till it is successful
• A software is used to perform the different calculations and incentives before payments is made.

The Benefits

– They receive benefits for each client secured through the sale.
– Affiliates can choose the best marketing strategy for them be it Social Media, SEO or PPC.
– Companies takes advantage of these to secure a healthy supply of fresh clients.

– This is an effective way to boost sales at a very low price.
– Through referrals, you can build a large network of clients. It has a ripple effect since a satisfied client can recommend more clients.
– For leads that are not qualified, they can have an average conversion of 10% while referral customers can reach the 60% mark.

Tips for Success

– Always have your target audience in mind, making sure that they meet your needs while you go for clients who have needs identical to the products you offer.
– Trust should be priority as customers are looking towards that. When there is no trust, all adverts and promotions are an effort in futility.
– As a result of the dynamics of the market, you need to find ways to remain relevant always, adapting to the changes as they occur.

– To ensure success, you need to state your target audience and demographics of your consumer to ensure success.
– For each offer, do some follow up to make sure customers are satisfied. If you need any help in the future, satisfied clients will be willing to offer some assistance in future.
– Make use of incentives to generate more leads. For example, offer some measure of discounts to each referral on the next purchase.

About The Author
Last month, more than 2 million people visited Brandon's blog. He shares exactly how he took his blog from zero to 1 million monthly visitors here. His path to success was not easy. Brandon had to comeback from being disabled, by a rare health disorder, for most of his thirties. God delivered him from hardship and has blessed his family in so many wonderful ways. You can send Brandon a message here.