Edward Roesch
Edward Roesch 8 January 2020
Categories Affiliate Marketing

4 Key Differences In Affiliate Versus Referral Marketing

Every business needs an effective marketing campaign - one that packs a punch to help you spread the word about your brand. Though, while referral and affiliate marketing are quite similar, there are key differences between them. Ignore these differences and you run the risk of an unsuccessful campaign, or, even worse, failure to launch any campaign at all.

What’s affiliate marketing? 

If you Google affiliate marketing, you will stumble upon many tips on how you can make loads of money quickly online with affiliate marketing. However, it is more intricate. In short, affiliate marketing is when another site refers someone to your business website. That person then makes a purchase and, in return, the affiliate gets paid a commission for the sale. 

What’s referral marketing?

Referral marketing is when a customer personally recommends the product or service by, for example, sharing a code with their network of friends, family and colleagues. In return, they will get rewarded if one of their friends then actually puts your product or service to the test. 

So what are the main differences?

Referral marketing can offer more personalisation

Let’s face it, we simply trust people we personally know easier than a company. If you opt for affiliate marketing, the site that advertises your product does not have that same personal connection with the audience that referral marketing offers.

If you opt for affiliate marketing, your affiliates do not know the audience on a personal level. Plus, they are also most likely driving traffic to your company’s website for their own financial gain. Though, when done correctly, that does not necessarily have to be a problem. Many affiliates go to great lengths to make sure that they do not end up sharing impersonal messages. And, according to one source, if you do not have many customers already who will recommend your brand, it is one of the signs when affiliate marketing is best for you. 

Referral marketing can offer a higher conversion rate.

As your audience already trusts their friends, the chances are better that they will actually convert. Plus, referral marketing links are mostly shared on social media, one-off emails or text messages. 

Why does this matter? Unlike search engines (where affiliate marketing links are mostly shared), social media channels have a lot less nonsense that your audience will need to process. In fact, your target audience has probably already become accustomed to view PPC ads as untrustworthy. 

Affiliate marketing can reach more people.

The reality is that you will typically only reach a set number of people if you opt for referral marketing, considering that those who refer your brand will only be able to refer it to those in their immediate network. Plus, you will also have to account for people who simply are not swayed by referral marketing.

Now, affiliate marketing on the other hand can reach loads more people. Whether you opt to work with a website, blogger or influencer, they have their own network that can market your product or service on their website.

Referral marketing can offer better engagement.

As referral marketing can offer better personalisation, the chances are better that people will proceed to the final stage of the checkout process. Though, do not just write off affiliate marketing just quite yet. Many influencers have fostered such a personal connection with their followers that people feel as if they actually know them personally. So, there are pros to working with an influencer that can help you to yield a high conversion rate.

The final verdict

At the end of the day, whether referral or affiliate marketing will deliver the best results will be influenced by your company’s goals. Affiliate marketing (or even a combo of the two) could work well for businesses that are eager to scale quickly. 

Though, if you are not in that big of a rush, begin with a referral marketing campaign. You can always work your way towards launching an affiliate marketing campaign later. 

That being said, you do need to have enough time to devote to an affiliate marketing campaign as this type of marketing does require some TLC. For example, you will have to design logos and banners that your affiliates can share.

If time is on your side, you can try to find ways to leverage the perks offered by both referral and affiliate marketing.

Please login or register to add a comment.

Contribute Now!

Loving our articles? Do you have an insightful post that you want to shout about? Well, you've come to the right place! We are always looking for fresh Doughnuts to be a part of our community.

Popular Articles

See all
10 Factors that Influence Customer Buying Behaviour Online

10 Factors that Influence Customer Buying Behaviour Online

Now is an era where customers take the center stags influencing business strategies across industries. No business can afford to overlook factors that could either break the customer experience or even pose a risk of...

Edward Roesch
Edward Roesch 4 June 2018
Read more
How to Review a Website — A Guide for Beginners

How to Review a Website — A Guide for Beginners

Whether you're a startup or an established business, the company website is an essential element of your digital marketing strategy. The most effective sites are continually nurtured and developed in line with...

Digital Doughnut Contributor
Digital Doughnut Contributor 7 January 2020
Read more
McDonald's: the History and Evolution of a Famous Logo

McDonald's: the History and Evolution of a Famous Logo

McDonald's logo is one of the most recognizable in the world. What does the logo of this brand mean, how did it evolve and what is the secret to the success of McDonald’s fast food network?

Anna Kuznetsova
Anna Kuznetsova 24 October 2019
Read more
The 3 Most Important Stages In Your Presentation

The 3 Most Important Stages In Your Presentation

If you want to deliver a presentation on a particular topic and you have to prepare yourself for it you should make sure that you go through several very important stages in order to craft a compelling, persuasive and...

Nicky Nikolaev
Nicky Nikolaev 16 February 2016
Read more
7 reasons why social media marketing is important for your business

7 reasons why social media marketing is important for your business

Social media is quickly becoming one of the most important aspects of digital marketing, which provides incredible benefits that help reach millions of customers worldwide. And if you are not applying this profitable...

Sharron Nelson
Sharron Nelson 6 February 2018
Read more