The Difference Between Referral Programme and Affiliate Marketing


Often times I tend to get confused trying to explain to myself what exactly is the difference that lies between an affiliate programme and a referral programme.

I must say this is a very tough question to ask oneself but considering the level of my not knowing, I decided to take a hike on this exact topic and here I am today to explain my findings with my readers.

I love sharing my ideas and things I have learned with my readers as a mark of my outstretched hands to help my readers understand and know exactly what I also know.

Let us start by stating out the similarities between affiliate marketing and referral programme

Affiliate marketing and referral programme have only but one thing in common which is their mode of earning. The two monetizing strategies are basically monetized using commissions gotten from sales made and also people referred.

Sometimes affiliate programmes and referral programmes still work at the same time on a website or a business. Say a specific business platform helps their clients monetize by using referrals and also offers affiliates.

Having explained the similarities between affiliate and referral programmes, let us quickly dive into explaining the differences between these two monetizing strategies.

Difference Between Affiliate and Referral Programmes

While traversing, the landscape of marketing programmes can be a very tricky business, especially. When industry terms overlap.

Take affiliate marketing and referral marketing as an example;

These two programmes drive new customer growth for your business, both use indirect advocates to make sales, and both provide a remarkable ROI on your marketing investment.

Having said this, what is really the difference between these two programmes?

Let us narrow this thing down:

Affiliate Advocates vs Referral Advocates

In affiliate marketing, the advocate does not know their referred customer personally, and the primary reason for referring your brand is financial motivation.

In contrast, a referral marketing advocate recommends your brand to a colleague, friend or family. The motivation is based on a strong relationship between. The advocate and the potential customer.

This being said, offering referral rewards helps drive to referral and shouldn’t be discounted.

Let’s look at the channels for success

These interactions lead to differences in the channel of communication used to drive required conversions.

Affiliate marketing tends to use more antiquated forms of media like E-mail and PPC ads. They are not seen to be contacting close friends but they seem to be looking out for a maximum exposure. Whereas a brand ambassador works mainly by social media platforms, text, and E-mail which makes sense given the trust based focus on peer to peer referrals.

An affiliate programme tends to focus on website owners and large influencers – making it more of a partnership than a relationship. The traffic generated is visitors searching for products using online threads.

This traffic has little to do with a prior relationship. While you’ll be getting more traffic, your likelihood of conversion is lower due to the lack of a prior relationship.

A referral programme focuses more heavily on customer engagement. It is building a strong relationship with your customer base to the point where they feel your brand is good enough to share with a colleague or friend.

Here, because of the prior existing trust-based relationship, referred customers are of higher quality, meaning that they are more inclined to engage with your brand and make a purchase.

Having in mind that the two forms of marketing have the same end goals, I.e: growing your business, nuanced differences require nuanced decisions on the type of structure that your business develops and optimizes.

Wrap up

Ambassadors proprietary referral software works just as well for affiliate marketing as it does for referral marketing.

So whichever route you wish to take among these two marketing programmes, you will be sure to bring yourself to a specific landing which is the end product as an increase in income.

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