In the current day, businesses abound, and it’s getting increasingly difficult to survive amidst all other similar businesses. In the early years, it was beneficial to get rid or “destroy” the competition. But aside from the fact that this strategy is negative and results to enemies and too much money and effort wasted, the trend nowadays is much more peaceful. And this is to leverage other businesses – or to try and work amicably, yet alone together towards similar goals.
There are various types of marketing efforts nowadays which rely on this “subsist-on-each-other’s-efforts” tactic, that the various terms and arrangements become confused with each other.
The 3 most intertwined marketing systems are Referral Marketing, Affiliate Marketing and Joint Ventures. They all have their similarities, but they are actually very different from each other. How? Let us start by defining what each one is.
What is Joint Venture Marketing is a partnership that involves two or more businesses coming together with the intent of promoting one another’s goods or services to build a bigger profit and a healthier bottom line. The businesses are typically related but non-competing, ensuring that both businesses find equal benefit from the arrangement.
A Joint Venture or “JV” can simply be two people (or companies) working together for a specific purpose. The purpose may vary – sometimes it can be to promote you, then some other times, to promote your partner, or both. It could also be to make money, to gain exposure, to enter a new territory or to market with the help of someone who has solid ground in that market.
Affiliate Marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts.
Affiliate Marketing is a promotion method that can be used to reward partner companies for introducing new clients. This type of marketing involves an established product or service, which affiliates sign on to help sell for a portion of the profit. The affiliate may pay a small fee up front to begin working with the company, and then provides the financing for marketing efforts like a website, mailings or door-to-door flyers. The company offers support in terms of credit card services, shipping and customer service. The affiliate also enjoys the benefit of marketing an established product with a familiarity that makes it much easier to sell.
Referral Marketing, on the other hand, is a marketing arrangement where most of the time, there is no actual monetary exchange, but more of being given leads or tips on who else others think can benefit from the products or services a business offers. It is more of pointing a business to the direction of someone they know who might be interested in making a purchase.
We know that these 3 types of marketing have one main similarity: there is a product or service, and the businesses which offer these products and services need more customers who will actually make a purchase or pay for a service. There is a need for more customers.
But each one is different as based how they accomplish their goals.
1. People involved
A Joint Venture involves another similar but non-competing business so that they can work together to increase their profits. They could complement each other – like how restaurants partner with businesses selling eating utensils and plates. When food is bought, there is an underlying need for the utensils. Both work together.
Referral Marketing on the other hand, involves the business in need of more clients, plus people who can give them leads towards even more customers. The partner could be friends, other decision makers from other business (which may or may not even be similar to the business looking for referral), and in most cases, old established customers who have enjoyed already the product and/or service. Thy can be the unofficial “brand ambassadors.”
Affiliate Marketing, on the other hand, involves parties outside the original corporate structure to build profits. The outside influences are typically individuals interested in selling the product or service already established by the company with the purpose of earning a portion of the sales.
2. Driving factors
A Joint Venture is driven by the need to grow a responsive customer base through their own collection of loyal customers. Two or more complementing businesses’ client base can be mutually shared, thus increasing their joint list of loyal clients.
Referral Marketing has a strong emphasis on relationships and building lasting business-and-trust-geared relationships. Although this may sound a bit personal, the very essence of a referral relationship is the underlying trust with the notion that real friends won’t dare refer a doubtful product or service because this very trust is damaged.
Affiliate Marketing relies purely on financial motivations to drive sales. Period. The business pays to get people snorting out customers from the most unexpected places, and the affiliates work to the best of their abilities to earn money.
3. Product and/or Service
Affiliate marketing already has a product or service to offer, and the company has probably been at least somewhat established to customers within an industry.
In Joint Venture Marketing, a newcomer to a specific industry might cash in by relating his product or service to another business that has already been established. In this situation, there is more than one company and therefore more than one product or service involved with the arrangement.
Referral Marketing may involve the promotion to other people of several products or services, regardless if these products are already established or still paving a name in the business arena.