Customer Referral Programs, Affiliate Programs, Partner Programs what is the difference? In this section we explain the main differences between each and provide some examples.
Welcome to another session on “What is a customer referral program”, today we’re going to talk about what is not a customer referral program. So in the past we have talked about what is a customer referral program, but it can leave a lot of questions still. So we want to talk about the two most common types of referral programs that are not customer referral programs.
The first type of referral program that is not a customer referral program is what’s called an affiliate program, and these are probably the most common that we see out there today. So an affiliate program is pretty simple in its concept, we’re going to take a random third party, he’s going to sell your product, and he’s going to make money for doing it. He’s going to make a commission of doing this, and he’s going to have all the advantages in the world to not talk to his friends but to actually talk to people at large. When we look at affiliate programs, one of the best-known example is the Amazon affiliate program. Really simple idea, if you post a review of a book, product, something that’s on the Amazon website, and someone on your website clicks through and buys that, that affiliate, the person who posted that link on their website, they’re going to earn a commission for that, they’re going to get paid for making that recommendation.
Now, over the years, affiliates have kind have gotten a mixed review and it’s actually illustrated by the fact that amazon no longer calls their affiliate program Amazon affiliate, they actually call it Amazon associate, just because they’re trying to get away from some of the underhanded tactics that people will employ when it comes down to just selling products.
The other type of referral program we see, that is not a customer referral program, is actually a partner program. So partner programs are a little more socially acceptable than an affiliate program, but what happens with a partner program, is that third parties come in and they’re certified by the organization typically, that might just be as simple as signing some kind of waiver, or it might be as much as completing courses, training, minimal employments, whatever it might be for the partner company, your company, to ensure that they’re qualified. Now, once again, that partners going to go out and they’re going to sell that product to random strangers and they’re going to get a commission for doing this.
Now, both affiliate and partner programs we realize we’re typically paying cash, so this is something that will affect the company’s cash flow, but it’s also something that motivates people differently. The other thing is, affiliates and partners are not typically expanding through their own network, their friends, they’re expanding through strangers or with the potential they’re doing their standard sales process with. And the problem with this is they’re not associating as much trust as what can be associated through a customer referral program. But these are two types of programs that are out there, that you should probably know about. They might make sense for your business, they often do make sense for some people’s businesses, but they’re not customer referral programs. That wraps up our session on “What is not a customer referral program”.