Making the Distinction: Affiliate Marketing vs. Referral Marketing

Making the Distinction Affiliate vs Referral Marketing

Looking at the words ‘affiliate’ and ‘referral’, one would assume that these two forms of marketing are practically similar, but there are striking differences. They are the same when it comes to their objective: both aims to drive more leads to the business and increase the return on investment.

These two types of marketing are important especially in B2B lead generation. A business can use all the publicity it could get, and what better way to achieve that than by person-to-person marketing?

So what sets them apart?

Affiliate: The main rationale of affiliate marketing is financial gain; the buyer is now known to the affiliate marketer as it is in some cases, and all the consumer needs to do is to click on a link. The affiliate earns a commission for each client recommended.

Referral: Referral marketing, on the other hand, has to do with conversations. For brands to succeed, they need to maintain the high standards consistently so you can be recommended by friends, family, relatives and previous clients.

Affiliate: This form of marketing is on the rise. In 2012, its popularity and usage increased by 42%.

Referral: Meanwhile, referral is based on satisfaction and experience. If your customers are happy with the service or product they got, as much as 83% of them will refer your services to others.


  • For potential affiliates, they sign up with a reliable scheme that rewards the supply of more clients.
  • Affiliates make use of their own resources to promote the products
  • When a client is secured, that client is monitored till he/she makes the final purchase before the affiliate is rewarded with a financial incentive.


  • A list of client is compiled. These are clients that would recommend a service to a friend or relative.
  • The Brand Ambassadors refers the product or services using the link and the entire process is tracked till it is successful
  • Software is used to perform the different calculations and incentives before payments are made.

The perks



  • This is an effective way to boost sales at a very low price.
  • Through referrals, you can build a large network of clients. It has a ripple effect since a satisfied client can recommend more clients.
  • For leads that are not qualified, they can have an average conversion of 10% while referral customers can reach the 60% mark.