Affiliate vs. Referral
You might think you need a referral program when what you actually need is an affiliate program.
Companies spend months building the wrong type of program because they focused on commission structures before understanding the fundamental differences.
The decision between lifetime fees vs. first-year commission isn't your most important choice.
Questions you need to answer:
- What's the nature of the relationship?
- Referral partners have ongoing relationships with their clients
- Affiliates have audience reach but typically no direct client relationship
- What's the involvement level?
- Referral partners actively participate in the customer journey
- Affiliates primarily drive traffic and awareness
- What's the value creation model?
- Referral partners create value through trust and validation
- Affiliates create value through reach and exposure
A referral partner might be your customer's trusted advisor who knows their business inside out.
An affiliate might be a content creator with a relevant audience but no direct client relationships.
Different roles. Different values. Different programs.
After you've clarified these distinctions it is time to start thinking about commission structures.
