Affiliate marketing is commonly confused with referral marketing as both forms of marketing use third parties to drive sales to the retailer. However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.
What is Affiliate Marketing?
Affiliate marketing centers around a business relationship between a brand and an affiliate. These businesses act as agents, sending qualified traffic to your website. Affiliate program success relies around locating advocates capable of reaching and promoting your product to your target audience. Customers will not know the advocate personally, and this is the crucial difference between affiliate and referral programs.
What is Referral Marketing?
Referral marketing revolves around the shared relationship between your customers, their friends or associates and your brand. Current customers personally promote your brand to new users to earn rewards, ideally for both themselves and their friends. While affiliate marketing is like enlisting a reputable yet unknown salesperson to spread the word about you online, It’s like bumping into a friend on the street and having them share a great tip or piece of advice with you. Often called word of mouth marketing, referral campaigns center around some basic facts: