Brands and digital marketers are leveraging the popularity of social media platforms to sell their products and offer customers a chance to refer the products/services to their friends and family. Word-of-mouth marketing encourages new customers to make a purchase. Moreover, it’s a powerful tool to make sales. People today trust individuals than the brand itself.
While word-of-mouth is hard to control and harder to predict, it is not entirely out of a brand’s hands. Word-of-mouth marketing strategies from brands help them to spread a positive word about their products and services.
Word-of-mouth strategies include referral marketing, affiliate marketing, and influencer marketing. These terms are not interchangeable and have major differences. It is important to know which term to use when. Let’s start with affiliate marketing:
Affiliate marketing occurs when a brand introduced an affiliate program for freelance marketers, social media figures, sales leaders, and website owners to help sell their services and products. In return, brands give them an incentive or a commission fee for every sale they make. The partners recruited to boost sales are known as affiliates. Affiliate marketers place product and service links of the brands on the blog posts, websites, and even social media accounts.
The brands have to provide the affiliates with marketing material, including all the affiliate links. Companies have to compensate the affiliate marketers with a commission fee through affiliate programs. For every sale they make through their website, the brand gives them a commission payment.
There’s no concept of fraud in affiliate marketing as the brands can track website visits, sales, website clicks, and the number of purchases. Therefore, it is easy for brands to identify and reward top affiliate marketers.
Most of the prospects apply through affiliate programs. However, some brands recruit marketers who can target a wider audience through their websites and social media accounts.
For example, an athlete might be recruited by a brand to post about gym equipment. He might put a review on his website or include the product’s affiliate link on one of his sports blog articles.
Affiliate marketers are concerned with making as many sales as possible while directing visitors to the brand’s product page. The higher the purchases and number of coveted clicks on the link in an affiliate’s blog article, the higher the commission fee.
Affiliates use their social media accounts and websites to promote a product. They are encouraging a wide audience (mostly strangers) to buy the product. They are not referring the product to their friends and family.
Most of the affiliate marketers are regular customers of the brand, however, it’s not true in every case. They are admitted to the affiliate program or are recruited based on their ability to reach the target audience.
Affiliate marketing differs greatly from influencer and referral marketing. Referral marketing involves sharing the link directly with friends and family who might be interested in buying the product/service.
Take the example of Amazon’s associate program. You might have seen social media figures reviewing products or recommending them in their blogs. If you open them, most of the links will direct you to Amazon’s product page.
Amazon then uses affiliate links to track sales traffic. They identify the top associate program member and remunerate them.
Referral marketing is a strategy that involves encouraging customers to spread the word about their services to friends and family. Referral marketing is a broad term and includes all the techniques used in affiliate and influencer marketing.
When it comes to referral marketing, you might have heard about referral programs. That being said, let’s talk about all the features of a referral marketing program so you can differentiate it easily from affiliate and influencer programs.
A referral program is for existing customers only. It helps all the satisfied clients to share what they love about a brand’s product or service. They share their recommendations with friends and family who might be interested in buying that product/service. They do not only refer to the products but also share their benefits and special features.
There are various types of referral programs. The customers can refer to the product/service via a text message, email address, social media account, phone number, and even by copying and pasting a referral link given by the brand.
One of the best referral marketing strategies including providing the customers with a pre-written message so that they can share the benefits easily. However, some of the brands let loyal customers decide and customize the message they want to send to their friends and family.
The message is always addressed or sent by a referrer and is sent from his channel. That is why it has a personal touch and creates an emotional bond with new customers.
A good referral program includes rewarding loyal customers with incentives. However, the incentives can vary and depend on the type of brand and business. For instance, the brand can reward the customer with 10% for sharing a referral message to 10 friends and family members. The purpose of an incentive is to encourage customers to share the message as much as possible.
The incentives are usually awarded whenever a new client purchases because of the referral. Some of the popular incentives are discounts, store credits, free products, gift cards, service upgrades, and even cash.
Fortunately, referral links and codes create specifically for referral programs make it easy for the brands to track where all the recommendations/sales and referrals are coming from. After that, the brand connects with the person who made a recommendation/referral and sends the reward.
One prime example of referral marketing is Airbnb’s referral program. Customers who sign up receive a referral link with the form. This makes them easy for them to share it with their friends and family. Whenever their friend or family member makes a booking with Airbnb, then the referrer receives an award or credit in their account.
Influencer marketing includes recruiting a group of people (mostly social media figures and public figures) for promoting products and services. Influencers you follow on Facebook, YouTube, and Instagram have a substantial reputation. They influence and showcase their lifestyle, daily routine, products, and the services they use to the general public.
An influencer has one or more than one social media with a large following. Most of them even have their websites. Rather than referring to friends and family members, they explain the benefits of buying a particular product and encourages the followers to make a purchase.
Influencers have either a large following or are experts in a specific niche. That is why some celebrities are also recruited by big brands to promote their products. As long as the audience sees the celebrities and influencers as authorities, recommendations made by them will be considered authentic. A social media user with more than 5000 followers is known as an influencer, given she shares her lifestyle, fashion sense, daily routine, etc.
It is the authority and the social media power that lures the followers into making a purchase. Hence, benefiting the brand.
Micro-influencers have small yet tightly-knit followers and their content is better than that of celebrities or well-known figures.
Influencers enter a short-term relationship with the brand or do a paid collaboration to promote the product. However, there are certain terms and conditions in influencer marketing that all the influencers have to abide by. For example, influencers have to agree on the number of posts they will make on the product. Moreover, the duration of the working relationship is also decided beforehand.
Most of the influencers are not the customers of the brand. But the followers have no problem with that since they have authority.
The brands reach the influencers first and familiarize them with how the product works, its benefits, disadvantages, etc. It helps them to curate compelling content for their followers. Good influencers in the community only promote the product that they have used. While most of them share the experience story, some of them show how the product works.
Influencer-brand collaboration is strictly a business relationship. Therefore, all the brands compensate influencers and celebrities with credits, free products, cash, and other incentives in exchange for promotion stories and posts.
For example, Shannon, a vegetarian food blogger has a business relationship or paid collaboration with Silk. Therefore, she promotes their almond milk. She has also posted a useful article on her website in which she has mentioned Silk’s almond milk as a good alternative to non-vegetarian milk.
As she is a vegetarian food blogger with high authority, she knows everything about plant-based cooking. It’s imperative that other vegetarian food brands will reach her and ask to promote their products/services.
Here are several differences between three word-of-mouth marketing strategies:
People admitted to referral programs are previous customers of the brand. They are satisfied with the brand and are familiar with the product/service.
Affiliate marketers are not necessarily the customers of the brand. Most of them do not purchase the product they are promoting. However, they are familiar with it.
Influencers or public figures have not purchased previously from a brand. However, they only promote the product if it’s good and has something to offer to the followers.
Influencers are recruited to promote a brand’s product because of their authority. They are associated with a niche, are experts, and have reached a large portion of the audience on the internet.
Whereas, affiliate marketers have the skills to make sales. They have their websites through which they promote the product. Most of the affiliates sign up on their own.
Referrers are not recruited, rather choose to promote a product on their own. They can sign up on their own and only if they are loyal customers. They are familiar with the product and know the benefits of using it. That’s another benefit for the brand.
People who sign up for referral marketing programs share referral links and pre-written referral messages to their friends and family who might be interested in making a purchase. Close relatives and friends already trust the individual’s suggestion. So, they check out the product for sure.
On the contrary, affiliate marketers share product reviews and information to the general audience. They curate content in the form of blog posts and add the product’s affiliate link appropriately. Anyone reading the blogs can click on the link and make a purchase. Some share of the sale will automatically go to the affiliate marketer. The person clicking and making a purchase trusts the affiliate, however, the trust is quite low as compared to a referrer’s case.
Influencers doing a paid collaboration with brands fall somewhere between affiliate marketers and referrers. They share everything with their followers on social media. They have their social communities. They promote the product to people they have not met physically.
Affiliate marketers prioritize making sales above all because they receive a cut from the profit.
On the other hand, referrers share the product suggestions out of love for their friends and family. Some might get enticed by the incentives that a brand gives but the priority and motivation for them is to help their friends and family.
Influencers have the same motive as the referrers. They share the product benefits so that their followers can reap the benefits. Yes, paid collaborations are their way of earning but the primary goal is to help the community invest in good products.
Affiliate, influencer, and referral marketing are different forms of word-of-mouth. Almost all brands rely on these strategies to boost sales and drive conversions. All 3 marketing strategies generate a powerful return on investment and boost sales. As long as you pick the right type of word-of-mouth marketing for your business, you are good to go.