Affiliate vs. Referral: Merits and Demerits for Mobile App Marketing

Affiliate marketing and referral marketing sometimes make confusion among marketers, advertisers, and influencers. These two terms are sometimes used interchangeably. However, these two terms are referred to as marketing strategies. These strategies both work for the same motive which is to drive more customers. But, these strategies are not the same. These are quite different from each other such as the way of their work to engage more customers and the target customers also differs.

In this article, we will discuss the different aspects of affiliate marketing and referral marketing. Before we start the comparison between the two let’s know about affiliate and referral marketing briefly.

What is affiliate marketing?

Affiliate marketing is also known as partnership marketing. Affiliate marketing is when an affiliate promotes other companies products or services. If someone makes any purchase through the affiliate link then the affiliate gets a commission. This commission may be a percentage of the total sale amount, a set amount per click, or a set amount per sale. This depends on the criteria and conditions provided by the advertiser.

An affiliate marketing strategy stimulates existing customers to recommend your services or products. This audience can be your friends, colleagues, family members, or any contacts that have shown their interest to purchase your products or services.

If you’re facing a hard time generating more traffic to your websites or web pages to sell your products/ services, you can hire an affiliate to generate more traffic. If the affiliate becomes successful in their job then you have to pay them their share.

What is referral marketing?

On the other hand, referral marketing is when a business’s existing customers promote the brand’s products or services to new users to earn a reward. Your brand’s existing customers promote your brand to their friends, family members, and colleagues.

You don’t need to pay them for recommending your brand instead you need to reward them through referral campaigns. As reward customers get free products, discounts, or cash backs from your company. Rewarding is the best idea to make customers satisfied. Referral marketing contains a unique code that must be shared by your customers with their friends. When their friends make any purchase using the codes then your customers will be rewarded by your company. 

Difference between affiliate and referral marketing

Difference between affiliate and referral marketing
Image source: Commission Factory blog

You can consider the following key points to understand deeply the difference between affiliate and referral marketing.

Relationship with the potential customers:

The main difference between affiliate and referral marketing is the type of relationship between the person who is referring (affiliate or referrer) and who is being referred (customers).

In affiliate marketing, the affiliate doesn’t refer your products or services to the customers personally. They get their commission after completing their task.

In referral marketing, the referrer recommends your brand’s products or services to the new users personally to earn the reward. Sometimes the existing trust between the referral and customers ends up with a successful referral.

Target referrer

In affiliate marketing, the target affiliate can be the publishers, influencers, and bloggers, who have skills and desires to make revenue through affiliate marketing. When any affiliate signs up for an affiliate program then he/she will be responsible to make more revenue for the business by promoting the business’s affiliate links to their channels.

In referral marketing, business owners target their existing customers for promoting their brand. Instead, the brand rewards its existing customers for recommending its products. The customers promote the business with a unique link to their friends.

The loyalty of the customers

In affiliate marketing, the trust level between the brand and the target customers is not so much. So, a loss is probable for the customers in long run. The loyalty of the customers is very low in affiliate marketing programs.

Whereas, in referral marketing, the recommendation comes through the people whom new users trust, so the probability of losing customers is low. The loyalty of customers is very high in referral marketing programs.

Medium of share

In affiliate marketing, the affiliate can share your brand’s products or services through their website or can mention your products in their blog posts.

On the other hand, in referral programs the existing customers share a unique link with new users to make their purchase. The sharing of this code can be done through Facebook posts or text messages.

Customers pool

Affiliate marketing allows the advertiser to reach a wider range of audience. If an affiliate has a larger audience pool, they must build trust and generate a stronger relationship with the target audiences to make them purchases.

In referral marketing, as the existing customers promote your brand to their friends, colleagues, relatives, etc.; there is a limitation to the number audience that any referrer can reach.

Advantages and disadvantages of affiliate marketing for mobile app

If you want to promote your mobile app successfully by adopting affiliate marketing strategies then besides some advantages there are also some disadvantages. Here, we are listing the advantages as well as the disadvantages of choosing affiliate marketing strategies:

Advantages

Incredible traffic growth

As the affiliate marketing strategies include the scrutiny of your competitors, potential customers for your mobile app, niche market, and nature of your app, etc. this program helps you to gather reasonable information before setting your business goals. These strategies will benefit you in the long run to generate more traffic, engagement, and leads toward your app.

Generate more revenue

The first step to being taken before implementing an affiliate program is research. Various factors will be assessed related to promoting your mobile app. These strategies will facilitate you to attract more app downloads; thus you can generate more revenue.

Build the app’s recognition

As an owner of a mobile app dealing with affiliate marketing, you can quickly understand that it is a very effective way to build your mobile app’s recognition and increase your target audiences’ acquisition quickly towards your app. As the affiliates mention your app’s name in their blogs or website in a positive way, you have someone as your mobile app’s ambassador; your app will get more recognition in the market.

High Return On Investment

By using affiliate marketing for your mobile app’s online advertising methods; you will be able to have a greater impact on your overall revenue. If you’re thinking to implement affiliate marketing for your mobile app’s promotion we can surely tell you that you will not have any complaints regarding your return on investment. ROI can be calculated if you know how much money is being spent for conducting affiliate marketing programs concerning how much money is generated by the affiliate programs.

Boost the app’s reputation

If you can create a reliable affiliate network and the network promotes your mobile app into the market; you can quickly realize a bigger reputation boosting has done for your mobile app. But you must corporate with someone trustworthy and valuable affiliate. Your mobile app is going to be a reputable mobile app that people want to download and make it installed.

Disadvantages

Spoiled reputation

The biggest demerit can take place if you allow someone to promote your mobile app on your behalf which can potentially damage the reputation of your app. You must be careful in choosing the right affiliate for your app. There may be various offers by the affiliates for you but you must make sure what is best for your potential customers.

Incorrect conversions

If affiliate marketers are dishonest in their responsibilities, it’s undoubtedly the biggest threat in advertising your mobile app. You can end up losing your app’s reputation, lose money, and there will be no such positive outcomes as well.

Uncertainty

Apart from these, you need to be aware that there is no guarantee that you will surely become successful. You cannot be 100 percent sure that affiliate marketing will work out for you. For these reasons, affiliate marketing can be referred to as a path of uncertainty.

Advantages and disadvantages of referral marketing for mobile app

Advantages and disadvantages of referral marketing for mobile app
Image source: Referral Rock

If you want to promote your mobile app successfully by adopting referral marketing strategies; then besides some advantages there are some disadvantages too. Here, we are listing the advantages as well as the disadvantages of choosing referral marketing strategies:

Advantages

Impact of the power of word of mouth

In this present era of digitalization, we get influenced by regular promotional messages. So, if you want to promote your mobile app dealing with referral marketing then it will be the most effective form of marketing to boost your app’s reputation. Referral marketing is when words of the mouth come into play. When consumers share their experiences of using your mobile app with their friends, colleagues, or relatives, then your app will become more familiar to new users. Each person continues the chain of promotion of your app then the chances of people getting more engaged towards your mobile app will be increased.

Gain new users’ trust

Referrals who convert into new customers of your mobile app will enjoy your app for a longer period. As the new target customers get information about your mobile app from their close ones; your app will instantly gain more trust from the new users. If you want to keep the new users for a longer time you must conduct double-sided referral programs where the referral and also the invitee can get the reward.

Saves cost

The task of searching for new customers and referring them to a product isn’t easier at all.  Unlike other marketing campaigns, referral marketing reduces marketing costs exponentially as it influences the existing potential customers who spread the word about your app very quickly. Further, referral programs provide lower-cost alternatives to promote your mobile app. The potential customers who talk about your mobile app also reduce the cost of the marketing campaign.

Disadvantages

Difficult to manage

Though you have set up referral programs to promote your app; most referrals may happen spontaneously. You may not have control over the messages.

Lengthy process

Referral programs will take more time to promote your mobile app naturally; that is why nowadays business plan to offer additional incentives, free subscriptions, monthly discounts, etc.

Undesirable feedback effect

Sometimes referral marketing ends up with more problems than happy customers. Reviews can be negative about your app and that will have a greater impact on the app’s reputation in the market. For this reason, a business must need to take care of the existing customers.

What should you choose?

If you’re wondering about what marketing strategies must be adopted for your business, then you must focus on the type and objectives of your business. Both affiliate and referral have a greater impact on getting customers in. if you want to promote your products vis an affiliate then you should choose affiliate marketing strategies. On the other hand, if you want more engagement of new users through your existing customers then you can choose referral marketing strategies.

Choosing anyone of these also depends on your budget and the target audience. So, you need to choose it wisely.

Conclusion

So, both affiliate and referral marketing raise voices to promote your brand’s recognition and generate more traffic toward your brands.

At first affiliate marketing can be difficult to manage but it brings a lot of worth with hard work and effort. Affiliate marketing has been tremendously growing for a few years. An affiliate also can earn money by promoting someone’s products or services. 

Referral marketing utilizes existing customers to increase new customers to be engagement with the brand. Both affiliate and referral marketing programs incentives for generating more customer revenue. But the main difference between the two types comes from how the advertisers approach new customers and encourage customer relationships.

M. D. -we will discuss the different aspects of affiliate marketing and referral marketing. Understand deeply the difference between affiliate and referral marketing.

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