Difference between affiliate marketing and referral marketing

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Two marketing strategies that are gaining ground in the present day business are affiliate marketing and referral marketing. Generally people confuse between the two because both these terms seems to be the same. But the fact is it is not. Affiliate marketing is a type of marketing in which rewards are given to individuals, agencies, search sites etc. for bringing in each visitor or customer through their marketing efforts. It is a type of performance based marketing. Many times it would not be possible for business organizations to bring customers  on their own and they would have to depend on third party vendors, affiliate management agencies etc. Affiliates apart from using regular advertising methods also use techniques like     e-mail marketing, search engine optimization, pay per click campaigns etc.

Now it comes to what is meant by referral marketing. Referral marketing is generally confused with affiliate marketing but they are two distinct forms of marketing. This confusion arises because in both these techniques third parties are used to drive sales. The major difference between the two is that affiliate marketing is done by third party service providers for monetary gains whereas referral marketing is carried based on trust and personal relationship. If a customer has conviction in the product/service on offering then he/she might engage in giving referrals. For e.g. if an education institution to which child goes for schooling is good then parents of that children might refer that school to their neighbours, family or relatives as well.

Click the following links to understand affiliate marketing and referral marketing better.

Example of affiliate marketing

Example of referral marketing

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