Affiliate Marketing vs. Influencer Marketing vs. Referral Marketing

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As a business owner or someone interested in getting into marketing, you've probably heard the terms affiliate marketing, influencer marketing, and referral marketing. However, for many, the distinctions between the three are ambiguous and a little confusing.

While they all have the same end goal and similar results, the methods employed and the situations that they are best suited to differ quite markedly. In this article, we will shed light on these three marketing types and help you make a more informed decision on which one to use.

Affiliate Marketing: List of Features

Affiliate marketing is a type of arrangement between an affiliate and a business whereby the business pays the affiliate a commission on a sale made as a result of a referral. The arrangements’ success largely depends on performance and the ability of the affiliate to bring in business. Read on to find out more about affiliate marketing!

 

Direct Potential Customers to Your Business

Affiliate Marketing forms around a business relationship between a company and an affiliate. This mutually beneficial relationship focuses on getting brand affiliates to direct potential customers, to your business, in exchange for a commission upon successful conversion.

A brand, product, or service generally gets promoted by the affiliate in the form of an email, blog post, or review. This marketing strategy uses an affiliate link so that the businesses can verify traffic and conversions made.

 

Easy To Set Up!

One main benefit of using Affiliate Marketing is that setting up an affiliate network is relatively easy because you don’t have to spend much time seeking out affiliates that match your chosen niche.

Many websites collect qualifying details about potential affiliates; these can help you find out which affiliate has the most experience in your market niche.  Another function is their ability to weed out desired affiliates from the undesired ones, helping businesses to improve the quality of their affiliate network.

Furthermore, you can speed up the process by searching on affiliate marketing service providers like FlexOffers; they can connect you with the right members, handle your campaign, payments, and statistics.

 

Long Term Relationships

Because affiliate marketing businesses rely on building partnerships, they focus mostly on long term relationships. Traffic gained from affiliate marketing is a gradual influx; it grows according to:

  • The quality of the selected affiliates
  • and the number of long term relationships with affiliates

Businesses that utilize an affiliate marketing business model tend to use reward systems and loyalty bonuses to keep and motivate their network of affiliates, putting further emphasis on the long-term nature of this marketing arrangement.

 

Influencer Marketing: Main Characteristics

Influencer marketing is a type of social marketing that includes endorsements and product placements from influencers within a given field. Influencer marketing is known for being able to create a significant boost in exposure to a business or brand. Read on to learn more about Influencer marketing!

 

Excellent Fast Exposure

If you need a quick and effective way to get a lot of exposure to your brand in a short space of time, then Influencer marketing is an excellent solution. After familiarizing an influencer with the product or service to be promoted, promoting happens through social media and their blog.

Due to the high number of followers that influencers have, a large amount of brand exposure generates very quickly, which inevitably results in a massive and sudden influx of traffic from curious or convinced followers to the brand’s website.

 

Collect the Social Proof You Need

Influencer Marketing generally works by paying a celebrity, an expert in a particular niche, or an authority amongst a target audience to endorse your brand, product, or service. Influencer marketing, therefore, makes good use of social proofing to boost brand exposure and sales.

Influencers and celebrities often have a large number of followers who either idolize, strive to learn from or emulate them. When their followers see that they have recommended or endorsed a particular brand, product, or service, they are therefore highly likely to be interested in or purchase from the approved company.

 

Short-Term Relationship Based

The business relationship between a company and an influencer is typically short-lived. It is limited to the familiarization period and the agreed promotion time on the blog and social media pages.

Furthermore, the business relationship is managed manually by a marketing manager as opposed to an online tool. It is the marketing or PR manager’s job to pick out a suitable influencer, reach out to them and familiarize them with the brand. A mistake that you should avoid is the selection of influencers that don’t fit the target group of your business.

 

Referral Marketing: Focal Attributes

Referral marketing is the process of creating new customers via the referrals of existing customers, usually through word of mouth or some other form of direct communication. This form of marketing relies heavily on the trust and relationship between referees and those whom they make referrals to, which are typically friends and family. Read on to learn more about referral marketing!

 

Let Your Customers Create Leads For You

Referral Marketing focuses on rewarding existing customers or subscribers to encouraging others to shop at your store or subscribe to your service. Generally speaking, both the referrer and the referee get a reward in the form of discounts, upgrades, credits, or altruistic emotions. Rewarding both parties has proven to be a powerful motivator to make a purchase or subscription.

 

Makes Good Use Of Trust

Referral Marketing is a useful technique because of its uncanny ability to utilize trust. When people make referrals, they often refer to their inner circle, i.e., their friends and family.

Because close relationships imply a high level of trust between individuals, a high degree of social proofing comes into play. After all, if you know and trust a person well, you will trust their recommendation faster.

 

Return On Investment

Referral Marketing is an ever-expanding return on investment (ROI). As referrals are made from one person to the next in an indefinitely long chain of references, the amount of traffic, user engagement, and conversions will increase over time. The initial costs of this marketing form will eventually be The costs of marketing will, over time, be balanced by the extensive margin that comes with this kind of marketing.

While the quality of the product or service itself is vitally important to referral marketing, a crucial secondary predictor of its success also comes from the quality of customer service. People will be far more likely to refer your product or service to people they know if they have had a highly satisfying experience with your brand.

 

Which Should Your Company Use?

There is no all-purpose ‘silver bullet’ marketing method when it comes to marketing. The type of marketing you choose to use depends entirely upon the needs and goals of your brand. If you have a promotional offer or wish to promote a particular service or product or to give your brand a boost in public awareness, then you should use Influencer marketing.

If you want to utilize an already existing customer base to increase your sales and profits by recommending you to people that they know, then you should use referral marketing. If it is your goal to get people to promote your brand and send traffic to your site through means other than social media, such as blogs, then you should use affiliate marketing.

 

Final Thoughts

As you now know, the type of marketing strategy you should use depends on your business needs. As a rule of thumb, affiliate marketing, which is a long-term traffic generation strategy, should be used when you want lasting channels of traffic.

If you need a massive, short-term influx of traffic to do a big promotion, for example, influencer marketing is the right choice for you. Referral marketing is the best choice if your customer base is well developed, and you want to leverage this to your advantage.

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