Now that you have heard of various types of marketing, how are they different from each other? How different is affiliate marketing to referral marketing?

Here are some of the most obvious.

One knows the referred one; the other doesn’t

One main difference between the two is that Referral Marketing thrives on familiar contacts – someone the referrer knows is referred to the potential client. This goes without saying that there is an underlying referral relationship which is already existing.

Affiliate marketing on the other hand is just the opposite – the people involved in the system blindly announces that someone needs something, and it’s up to those who heard the announcement to determine if they could be a fit for the need. This means that affiliates have a huge tendency of not knowing who the new customer is.

Driving force is different

Referral Marketing is driven by an underlying desire to help – to help keep the existing referral relationship going. Affiliate marketing on the other hand is financially different. The main stimulant would be to earn money for every fulfilled transaction. The affiliate partner is driven solely by financial reward. Regardless of whether it is a straightforward percentage of sales or a multi-tier incentive structure, affiliate marketing is all about the money.


Affiliate marketing requires that when you make a sale through one of your affiliates you will need to pay that person a percentage of what you have made on the sale. The going rate for affiliates doing affiliate marketing nowadays is about 20 – 60 percent of the item price. Most of the time companies will start affiliates on a 20 percent commission and move them up when the sales starts picking up.

Referral marketing, as opposed to affiliate marketing, is the cheapest method of sales and marketing and companies and organization the world over are adopting this priceless sales method. Why, because it is a way of using your current clients to generate a new database of clients for you and your company.

Medium used

Both methods use different forms of communication to be successful.

Affiliate marketers tend to use more antiquated forms of media like email and PPC ads. They’re not contacting close friends, but rather looking for maximum exposure. They make announcements, post blogs, newspaper articles and/or social media.

Referrals get their goals done by network marketing, attending networking events to get out and meet actual future clients, and thrive on personal forms of communication, like phone calls, personal emails, and even giving gifts to clients they are “courting” on special occasions.

Affiliates = Partnership; Referrals = Relationship

An affiliate program will focus on website owners and large influencers—making it more of a partnership than a relationship. The traffic generated is visitors searching for products online, and has very little to do with a prior relationship between the two factors. While you’ll be getting more traffic, your likelihood of conversion is lower due to the lack of a prior relationship.

A referral program 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 friend. Because of the prior existing trust-based relationship, referred customers are of higher quality, meaning they’re more inclined to engage with your brand and make a purchase.

Reward / Payment for people involved

Affiliate marketers get paid on a commission basis for each person they refer. While referral marketers get paid a set amount for every referral they make or every referral they produce for your company. When you adopt the referral marketing method of sales, you can offer many things other than money to the people you use for referrals – like shopping vouchers, discounts on a meal, prizes, or you could even go as far as turning it into a competition, which makes affiliate marketing a more developed version of referral marketing.