Referral vs. Affiliate Marketing is very similar, but there are some subtle differences, do you know which is right for your business? Let us help

1. Referral Marketing vs. Affiliate Marketing
"Affiliate marketing vs referral marketing often get confused for being
the same marketing technique. Both tactics stem from having a person
recommend your business

2. Referral Marketing Software- Everything you want to know

3. What is referral vs. affiliate marketing?

4. Referral Marketing vs. Affiliate Marketing
• What is referral vs. affiliate marketing ? This is the question that often gets
many marketers confused. Many consider this as the same marketing
strategy as both deals with the advocates (the existing customers). And
why not consider them the same? They both work for the same motive to
drive more customers.
• But carrying the same motive and strategy, these two differ a lot, such as
the customer they target or how they engage the customers.
• Further, in this blog, we will learn the similarities and the differences
between them both so that you can decide what suits your business the
best.
• Before I start off with the comparisons between the two, let us know in
brief what referral and affiliate marketing as individuals are.

5. What is Referral Marketing?
• Referral marketing works along with word of mouth. Your existing
customers love the products/services of yours, and they recommend
it to their peers. You don’t pay any customers to promote your brand.
Instead, you reward them or incentivize them for recommending you
via the referral campaign. As reward customers get discounts, free
products, or sometimes cash backs. Rewarding is the best way to
encourage your customers.
• A referral program contains a referral link and a unique code that your
customers will share with their friends. Once their friends subscribe
to your service, the advocates can redeem their reward.

6. The referral program is considered one of the best
ways to promote a business without spending a
hefty amount of money.

7. What is Affiliate Marketing?
• Affiliate marketing is more like referral marketing, but you don’t give out
rewards for promotions. Instead, you pay the influencers in cash. You pay
to the affiliate of your business to sell out your products to others. The
affiliates not necessarily can be your customers. Their sole agenda is to sell
or promote your products and get a commission in return.
• If you are getting a hard time to generate traffic to your website or sell your
products/services, you can always hire an affiliate to help you for good.
Once an affiliate is successful in getting you the desired results, you can pay
them their part of earnings.
• Now that you know the key difference between affiliate and referral
marketing from their definitions let us begin with the key differences.
• Below mentioned are four major points of referral vs. affiliate
marketing :

8. Affiliate Marketing vs. Referral Marketing
• 1. Relationship with the audience
• Affiliate: The Affiliate does not know the customers personally, but
the customer might be a follower of the Affiliate. The Affiliate can be
an influencer a celebrity or any other online business that people
follow of have trust upon.
• Referral: Referral marketing works on recommendations from friends
to friends. The trust level is very high, as there is a sense of
personalization. The friend/ family share about the brand to the
people they know. Thus, how a strong customer base is created.

9. 2. The loyalty of the customers
• Affiliate: The trust level is not as high. Thus in the long term, there is
a probability of losing the customer over time.
• Referral: As the recommendations come from the friends or the
people they trust, the chances of losing customers diminishes. The
loyalty and the perpetuity of the customer are very high in referral
program marketing.

10. 3. Types of Rewards
• Affiliate: In Affiliate, the rewards are more like giving out incentives in
the form of cash. Cash is the commission of the sale the affiliates do
on your behalf. As the affiliates are the influencers of the celebrities,
they sometimes get free products to advertise and bring in the
customers.
• Referral: The incentives in referral marketing are the reward that
customers get in return for referring your services to their friends.
The reward can be discounts, free products or sometimes the
cashback.

11. 4. Medium of Share
• Affiliate: The products and services are shared via a dedicated
website or some blog posts. The affiliates can mention you in their
blogs or can sell your products through their website.
• Referral: The referral program contains the referral link and a CTA.
The advocates share the link with their friends via social media. The
sharing of the referral link and the code can be done in the form of a
text message or as a facebook post.
• These were some differences between affiliate and referral
marketing. Where there the differences exist, some similarities are
there too.

12. Similarities between Affiliate and Referral
Marketing:
• 1. Referral and Affiliate both work with the people to promote your
products to others.
• 2. They both are cost-effective and don’t burn a hole in your pocket.
• 3. They both work in the same ideology to get new customers and in
return, get rewards or incentives.
• 4. Both drive-in the loyal customer that stays in for the long term as
there is a level of trust.

13. Affiliate Marketing vs. Referral Marketing

14. Affiliate vs. Referral Marketing: What to choose for
your business?
•
It all depends upon the type and the goals of your business. Both
types of marketing use influence to drive customers in. If you want
that your products need influencer use affiliate marketing but if you
want your advocates to recommend your services to their friends via
word of mouth use the same.
• Adapting any one of these depends on many factors, such as the
budget of your campaign or the way of customer engagement. The
choice is you choose wisely!
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