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Difference between referrals and affiliate marketing?

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  • Difference between referrals and affiliate marketing?

    I'm completely new to affiliate marketing. Do I understand correctly that the difference between referral marketing and affiliate marketing is that referral marketing requires you to be a customer? What's confusing is that many companies only require you to register an account with them in order to get a referral link. You aren't necessarily required to buy any of their products. Does that mean you aren't a customer, and thus, it should really be called affiliate marketing instead. Some examples I've run across that allow you to earn money from referrals without buying anything are Ebates, Petco, and PetFlow.

  • #2
    Originally posted by Sarah Bennett View Post
    You aren't necessarily required to buy any of their products. Does that mean you aren't a customer, and thus, it should really be called affiliate marketing instead. Some examples I've run across that allow you to earn money from referrals without buying anything are Ebates, Rover, and PetFlow.
    I think you're confusing the consumer side from the marketing/seller side. Many businesses offer both a referral program and an affiliate program. Some key differences are that what you earn for a referral is almost always rewarded in store credit. If you refer someone to PetFlow and they spend the required minimum, you'll be rewarded with $10 to spend at PetFlow. If you refer a friend to Rover and they use the service, you'll receive $20 off your next booking. If you aren't already a customer of the company, you will become one if you want to use your earned credit Store credit is great, but the electric company won't accept it as payment. Referrals usually help you save money, rather than make money.

    Ebates is no more. It was bought out by Rakuten, but the program operates much the same way, just under a different company name. It's an online shopping portal. Rakuten gets paid for sending customers to those companies. Rakuten is just giving you a cut in the form of cashback. The money can be put into your bank account, but remember that it's basically a rebate. So again, your saving rather than earning.

    Many platforms offer both referral and affiliate programs. I just touched on the consumer, referral side for brevity.

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    • #3
      Most people often confuse these terminologies and assume that they are the same marketing technique. In addition to what Rob Porter has said, affiliate marketing involves a company signing up affiliates (individuals or companies) to market its products for a commission. In referral marketing, existing customers refer a company to their network.

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      • #4
        [QUOTE=Rob Porter;n300]
        If you aren't already a customer of the company, you will become one if you want to use your earned credit.

        That is what confuses people. You become a customer simply by getting store credit. Or to put a finer point on it, you become a customer when you are given something rather than buying something. That is counter-intuitive and it throws people off.

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