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WooCommerce Referral Program vs Affiliate Program – What to Pick?

In this article, we will offer you an overview of both the referral and affiliate programs that will propel you out of this enigma to find out which strategy works best for your WooCommerce business.

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Last updated on July 24, 2022

Digital marketing experts have developed various tools and strategies to assist website promotion across the web, out of which the affiliate and referral programs are extremely profitable for businesses of any level.

Since they operate on similar principles, they are frequently confusing, even though they have significant differences.

In our extensive guide, we highlight the benefits of these two digital marketing strategies and compare WooCommerce referral programs and WooCommerce affiliate programs, along with some plugins for them.

Read on to find out which fits your business goals best.

Understanding referral program

Having at least a dozen loyal customers that enjoy using your product or service can make it easier for them to promote it to more people.

So a referal program is a system that provides incentives to such loyal customers to recommend your products and services to their family and friends.

In the world of digital marketing, this effort is known as referral marketing.

The basic principle behind it is not very complicated, it’s rather as simple as rewarding your customers for sharing a link or a special code with other people. The reward can take the form of discounts, cashbacks, free products, upgrades, etc.

However, to make your deal successful, your product and positioning have to be strong. This process in general will make it easier to uplift people to raise your brand’s awareness among a wider number of people.

How referral program works

The foundation of a referral program is referral links. Each customer who takes part in a referral program is given a special link that records the referrals they make as well as the actions the recipients of those referrals perform, such as email sign-ups, service subscriptions, purchases, etc.

All they need to do is send the link to their friend by email, text message, social media or groups on WhatsApp and Facebook Messenger and they can only hope that their friend will click on it.

Types of referral programs

We can easily classify referral programs into three types:

  1. Direct referrals – Your existing customer base refer your brand to others without any incentives in return. They like the product or service so much that they can’t resist spreading the good word.
  2. Incentivized referrals – The most popular type wherein customers are rewarded some incentives for promoting – a discount on next purchase or some cashback. Most popular with Cab bookings and food delivery companies.
  3. Reputation referrals – This is for those brands that have a strong reputation and people are confident in mentioning you even if they haven’t bought it themselves. An example would be Apple products.

Benefits of referral programs

Referral partner programs are used by many experts and are thought to be a powerful form of marketing. The reason here is justified: people tend to trust recommendations from family, friends, and colleagues more than they would trust advertisements.

A successful referral program can help you:

  • Grow your customer base, as most people submit quality reviews and posts, and you can make your loyal visitors generate interest and trust among their fellows.
  • Improve client relations by rewarding them even for small favors.
  • Develop a brand’s awareness and trust at once, because new customers will have better faith and confidence to decide if they are well worse with the identity.
  • Being cost-effectiveness, as the share of your success depends more on how you present it and the quality that you serve rather than the random marketing investments.

Selecting the ideal referral program may be a terrific digital marketing approach, as well as a great share and aid in the expansion of your business.

However, there’s another successful tactic in marketing that works somewhat on similar lines and even on a bigger scale. That is running an affiliate program.

Understanding affiliate program

Marketing through affiliates is synonymous with marketing through partnerships. You can also use this strategy to reach a wider audience, but in this case, you’ll engage other people more rather than your customers.

In an affiliate program, you allow people – influencers, bloggers, friends and also your customers to become your affiliates and earn commissions for sending traffic or sales your way.

Simply put, affiliates spread your link/coupon in their webspace and get paid for every interaction other people have with this link/coupon. Affiliate payments also vary based on the type of business you run, products sold and who is the affiliate.

Your affiliate program’s success is solely determined by the affiliates you choose, so picking up the right one is critical. Also, the people you entrust your brand to are responsible for the impression they make.

How affiliate program works?

Like referrals, an affiliate program also involves links. This link is a unique URL that contains the affiliate’s ID or username and is essential for monitoring the affiliate performance.

Each person that joins a company’s affiliate program is given an affiliate link or coupon, which aids in tracking any traffic, subscriptions, or purchases generated by that connection.

All they need is to share this link via different platforms and expect people to click on it.

Benefits of affiliate program

Choosing the right affiliates can be a great help in transforming your business. As a result of a fruitful affiliate program, you will receive the following:

  • When you ask other businesses and bloggers to share your content or a link to your page, you get more targeted traffic.
  • Get more conversions and sales when some influential people join your affiliate program and mention your brand to their audience. Here’s more on how influencer affiilate marketing can amp up your sales.
  • Affiliate marketing also results in getting quality backlinks from good authority websites which is quite good for SEO.

With such notable advantages, affiliate marketing is a well-liked digital marketing strategy that, when used properly, can work for practically every organization.

As you may have observed, you may find some significant similarities between affiliate and referral programs. Yes, there are but big differences as well. So let’s compare these tactics.

Similarities between referral and affiliate programs

There are a few fundamental similarities between affiliate and referral programs – which is why even some expert marketers are confused about them.

The major similarities between affiliate marketing and referral marketing are:

  • In both cases, you’re trying to expand your brand awareness.
  • Their mission is to drive fresh, quality traffic to your website.
  • Promoting both of them requires intermediaries.
  • They both work on the principle of rewarding the intermediaries.
  • Both are relatively inexpensive and can be fit into any budget.

Differences between referral and affiliate programs

Since both referral and affiliate programs depend on incentives to promote business growth, they may sound similar to those who are not familiar with marketing. However, the underlying strategies that aim at this goal are fundamentally different.

Factors Referral program Affiliate program
Source Rely more on existing customers to spread the word. Rely more on bloggers, influencers, industry experts.
Reach potential Limited ability to reach people outside of family, friends, or coworkers. Wider reach across an audience of different niches.
Trust High as recommendations are from trusted people. Not as high as affiliates do not know the customers personally.
Control More control as you know your customers. More control in your hands provided you choose the right affiliates.
Efforts Less as your customers will do the promotion. More as you also need to help affiliates with resources so that they promote better.

WooCommerce referral program plugins

Be it any WooCommerce store, without plugins, you can’t set up any referral program or affiliate program.

We first have a look at the popular WooCommerce referral program plugins.

AutomateWoo – Refer A Friend add-on

With AutomateWoo – Refer A Friend, you can easily create and run a customer referral program that boosts your word-of-mouth sales.

It is a ‘coupon-based’ campaign where advocates receive unique discount codes to share with their friends.

Promo codes can be used by friends to earn discounts and advocates receive store credit for referring friends. You can also switch back to ‘link-based campaigns’ if you’re not comfortable with coupons.

Using your WordPress admin area, you can easily set up a customer referral program for WooCommerce.

WooCommerce referral program plugin AutomateWoo Refer A Friend addon referrals listing

Key features:

  • Choice between manual or automated referral approval.
  • Advocates can share the link via Facebook, Twitter, WhatsApp and more.
  • The coupon codes are unique to each advocate.
  • You can include a post-purchase share widget.
  • Fraud prevention.
  • Analyze the performance of your program through a dashboard.

Pricing: $79/yr

Get AutomateWoo – Refer A Friend

Referral System for WooCommerce

Referral system for WooCommerce plugin allows you to create a referral program that turns your loyal customers into brand advocates, and gives them exclusive rewards every time they refer a friend.

Using this plugin, you can easily integrate WooCommerce Points and Rewards extensions.

Referral System signup rewards

Key features:

  • Referrers and referrals can get sign-up rewards.
  • Offer order-based rewards.
  • Offer loyalty points and referral rewards.
  • Easy social sharing options.
  • Track your referral rewards on your My Account page with ease.
  • Allows customers to redeem their points.
  • Customizable referral emails.
  • Set expiry dates for rewards.

Pricing: $49/yr

Get Referral System for WooCommerce

Gamification for WooCommerce

Gamification for WooCommerce will help you employ gamification to improve user engagement in your WooCommerce store. Rewarding your customers with discount coupons, points, badges, etc., can increase their loyalty to your store.

Referral points can also be assigned for specific products. Furthermore, you can limit the accessibility of certain products based on a customer’s level in your reward system.

Key features:

  • Create a point, badge, and coupon-based automatic reward system for your WooCommerce store
  • Partial payments are allowed
  • Restrict product accessibility based on points
  • Permit customers to establish a referral network

Pricing: $79/yr

Get Gamification for WooCommerce

WooCommerce affiliate program plugin

Affiliate for WooCommerce from StoreApps is one of the best plugins on the WooCommerce marketplace. You can create and run your successful affiliate program.

The plugin is easy to use and comes with simple settings so even new users can configure it easily.

In addition, store owners can track and manage affiliate partners, set up commission rates, create marketing campaigns and make payouts all from a single place.

Also includes a self-care dashboard for your affiliates.

Plugin developers provide full support so that if you run into any problems you get the help you need.

Affiliate for WooCommerce plugin dashboard

Key features

  • Allow manual and automatic approval of affiliates on your website.
  • Allow affiliates to create referral links or use coupons for referrals.
  • Advanced rules to create commissions for different products and affiliates.
  • Create marketing campaigns to aid affiiates in promotion.
  • PayPal Payout and manual payout method.
  • Set up a multi-tier affiliate program
  • Real-time, accurate and advanced reports.
  • Search filters, tags, export…

and a lot more…

Pricing: $129/yr

Get Affiliate for Woocommerce

Which strategy is right for you?

Use the following inquiries to examine your goals if you are still on the fence about your choice:

  • Type of business – For consulting, coaching, online stores like fashion, electronics and B2B businesses, affiliate programs are more suitable. Referral marketing works well for restaurants, fleet bookings, local services, gyms and B2C businesses. Though, both programs work well for any business.
  • Brand reputation – A successful referral campaign hinges on your reputation, so you should focus on it to encourage referrals to invite their peers.
  • Boost your sales or get more initial users – As affiliate programs target large and relevant audiences, they can stimulate sales spikes. You may want to choose a referral campaign if you do not want to chase numbers but instead want to acquire more users initially (can be free ones as well).
  • Existing customer base – Affiliate marketing can be effective even with no client base, but referral programs require clients who have already tried and liked your products. Therefore, affiliate marketing is more effective for businesses with experience.
  • Quality or Quantity – Some businesses do not have high-quality standards for their products. For these businesses, affiliate marketing is the better option. To get referrals, you must constantly improve your product to meet your audience’s expectations.

Conclusion

Affiliate program or referral program? The choice is yours as both are powerful.

But you have to opt for the right marketing strategy and partner that can help you bring maximum returns by considering all the points that are mentioned above in the blog.

It’s also a win-win situation for you and your customers both at the same time.

If you opt for the WooCommerce referral program, we suggest AutomateWoo – Refer a Friend. And if you are thinking of starting your own affiliate program, Affiliate for WooCommerce is your go-to plugin.

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