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Which out of affiliate or referral marketing gets more users for your brands

by Sudhir Kumar Referral Marketing

 The ultimate goal of all brands, products and services is to gain new customers, increase their returns on investment and ultimately their revenues. The two main channels proven to achieve this are affiliate marketing and referral marketing. While many companies are often left in a dilemma as to which one to choose from among these two, here are some facts about both of them.

According to this report by Internet Advertising Bureau, out of the total £800 million spent in affiliate marketing in 2012, they generated £9 billion via lead generation and sales. According to Software Advice, a lead generation and evaluation company, 88% B2B marketers use referral marketing software’s. These stats are enough to make a novice marketer wonder which method to choose to growth hacks the number of users, however in this article we explain in detail how each of these marketing methods work and which one is the most beneficial for your brand.

Affiliate marketing – Way back in 1990 Amazon used affiliate marketing (used even today) to share a part of revenues with people or companies who drive sales to your brand. For every sale they get a percentage of commission ranging between 35-50%. One drawback of affiliate marketing is that the advocate drives new users for financial gains and does not know them personally.

Referral marketing – Billion dollar companies such as Airbnb, Uber, Dropbox and Groupon used referral marketing wherein the existing users refer the products to new users and when they sign up for these products, each one gets some rewards. This word of mouth marketing is 54% more effective because the user recommends the products to his network – family, friends and peers.

To create an effective referral marketing campaign, first find out the right incentive that’ll make the existing users your brand advocators. For Dropbox’s 3,900% growth, when an existing user referred Dropbox’s service to a new user and when the new user signed in, both got a free space of 125MB.

To get the maximum out of refer a friend program, the right reward has to be given at the right time in such a way that it’s not obstructive yet gives a light nudge by adding a call to action. With so many companies using refer a friend growth hack, referral marketing software’s are highly used, Refiral being one among them wherein you can quickly implement a referral program.

The key to championing the referral marketing is by offering outstanding customer service, identifying the correct channel that’ll drive sales, measuring the results and then making the entire process frictionless.

Wrapping up – Affiliate marketing and referral marketing both have reaped good results for different industry players. For every $1 that you spend in affiliate marketing, the return rate is $11 while people are 4 times more likely to buy a product when it is referred by a friend.

What works for one business may not give the anticipated results for another business, so try each of these channels and put into enforcement the one that helps in growing your user base incrementally. 


Author Bio

I am Mamta, an electronics engineer and a freelance content writer. I have 1.5 year experience in SEO based content writing. I have passion in creative writing and worked on various niche, besides of writing I love singing, sketching and watching movies. I love to weave my ideas, visions and knowledge into words and expression that’s why I am here as writer.


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About Sudhir Kumar Freshman   Referral Marketing

12 connections, 0 recommendations, 42 honor points.
Joined APSense since, April 22nd, 2015, From noida, India.

Created on Dec 31st 1969 18:00. Viewed 0 times.

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