Affiliate marketing tip #2: Affiliate marketing vs. referral marketing
Affiliate marketing and referral marketing. Two well-know terms ... which are commonly confused by more than 75% of internet marketers!
Sounds incredible?
Well ... Here's a simple question:
What is referral marketing and why is different from affiliate marketing?
Now take a short brake before continuing! Try to answer the above question by defining each term with your own words and defining the main difference between these two strategies!
And don't cheat :)
OK. Now compare your definitions and your answer with my conclusion:
Affiliate marketing is a partnership between merchants and affiliates. Referral marketing is a relationship between marketers and customers.
Basically, the final objective is same in both situations. You are desperatley trying to engage and convince so-called third-parties in order to generate sales for a given advertiser.
But that's the only common thing about these two strategies. Everything else is different ...
In affiliate marketing you ultimate objective is to generate a constant flow of sales, customers or prospects. In referral marketing your main goal is to maintain and to increase the engagement of the existing customers.
In affiliate marketing there is a partnership between merchants (advertisers) and affiliates, while in referral marketing you - as a marketer - are trying to create a connection and to build a relationship with the customer.
In the first case we are talking about a pure finantial motivation. There is no contact between you and the customer. You can't influnce his decisions or his further actions. In the second case, there is always a human connection. Some sort of 'personal touch' that usually can be leveraged to influence the behavior and the upcoming decision of an existing customer.
And needless to say, the promotion strategies will be different as well. As an affiliate marketer you are going to focus on PPC, paid advertising, social media and of course email marketing. Of course, all these promotional methods can be used in referral marketing too, but there is a big difference: the offline marketing methods also can be very effective.
Recent Comments
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Referral marketing depends on trust, and building relationships. Talking about about how people can change their lives. It's crazy to live your last 20 years in fear.
Hmmm. Thanks for clarifying. If you don't know the difference, you don't know the proper way to conduct business between the two. Appreciate this!
As you said Sachi, it's all about finding the proper way to conduct a business
Thanks for your comment!
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I haven't seen a pure referral marketing model, unless you mean the situation where you have a product that you created for sale - sort of like the Jeff Walker launch scenario.
I think what I'm doing with my website is incorporating both concepts into one model. I'm establishing a relationship with companies offering a service (the affiliate partner) and also educating the potential customer to the point where they understand the need for the service in their own life. The balancing act I feel will build a stronger base of people dedicated to improving their own lives. I hope that is the right approach and will create a long-term business helping people.
Any thoughts? Thanks for all your posts. Ted
Yep ... That's the "next level" ... Incorporating both concepts in one marketing avenue.
Thanks for your time and your feedback Ted!
Thanks for the encouragement. Now I have to make it work.