Published on
June 7, 2021
Affiliate vs Partner: What Program Is Best for Your Business
What is the difference between an affiliate and a partner? Find out their merits and demerits, and which program best suits your business.
Introduction
An affiliate receives a commission when a specific action set by you—the affiliate partner program owner—is completed. A partner is a more high-level figure and can be part of multiple programs, including a reseller program where they talk directly to prospects.
Both affiliate and partner programs can be effective ways to grow your brand and increase sales, but what are their differences, and which is best for your business?
The marketing and sales industry underwent significant changes within the last several years. E-mail marketing and direct advertising seemed to be the go-to strategies for most online businesses but their efficiency is starting to wean off slowly.
Specifically, direct advertisements aren’t performing like they used to; a 2021 Marketing Dive study has shown that ad overload is the problem. In the report, 52% of the surveyed people stated that overexposure to ads negatively impacted their image of a brand.
As advertisement channels become oversaturated, companies have begun to shift their focus to indirect partnership channels, which can foster real trust and long-term business.
These partner programs can help develop partnerships with other businesses, consultants, and people whose networks would otherwise be inaccessible without certain perks.
The Difference Between Affiliate & Partner
Affiliates are partners, but partners aren’t always classified as affiliates. An affiliate is only a partner type. Partnerships cover a wide variety of different channels and programs, and affiliates are just one of those options. The two other types are:
Affiliate programs are usually categorized under some sort of performance-based compensation package. The most popular form is a commission program in which the affiliate is paid based on the sales/conversions made through the affiliate’s channel.
For example, SaaS companies often share revenue with the affiliate for a certain time period, and depending on the affiliate program, they may do so for the entire lifetime of the customer, meaning that the affiliate doesn't just get a one-time commission but recurring commissions.
When the marketing term affiliate was first introduced, it mostly referred to coupon and discount sites that would get paid based on the actions traffic took on the sites they redirected them to.
These websites gained a poor reputation for being less transparent and obnoxious. Unfortunately, this negative "aura" is still associated with affiliates, but programs are shifting to deliver real value to those who choose to participate.
Who is an Affiliate?
Affiliates are individuals or businesses that grow and maintain a high-value audience in specific niches, such as data consulting, B2B marketing, and payment processing.
Some of the most successful affiliates spend time creating value for their audience through their content, which establishes them as experts in their niche and awards them trust.
Affiliates cultivate and grow a dedicated following that trusts their recommendations.
Finding the right affiliate for your business is about aligning your affiliate program with what affiliates care about most: increasing cash flow and cementing their position.
There are a few similarities between affiliate marketers and influencers.
Often, the two mix together (even in business, not just consumer industries), and affiliates might be seen as influencers or "thought leaders" in their own right.
What is the role of an Affiliate partner?
Since affiliate programs are primarily performance-based, it makes sense that most affiliates are focused on conversions (i.e. turning loyal audiences into cash flow).
Affiliates seek out products that they believe they can sell to their audience effectively and in a timely manner. They also look for innovative and interesting products to pitch.
High-end affiliates will want to ensure that the product or service they are promoting provides their audience with value and isn’t just a quick sell. This value-based method ensures their audience remains happy while providing a good stream of dedicated customers.
How To Align Affiliates with Your Business Efforts?
It’s important to remember that you are selling your product to an affiliate’s audience, not the affiliate themselves. So, you should focus on finding affiliates who align with your vision and cater to your ideal customer profile (ICP) through them. This isn't an immediate process.
Focus on finding not only affiliates that align with your vision but also cater to your ICP at scale.
First, you will need an established client base. If you don't and immediately jump onto the affiliate bandwagon, you may incur all kinds of alignment issues.
This is extremely important because even if you find a good affiliate marketer, if the audience isn’t interested in your product, then the partnership will fail.
If you’re looking to attract high-quality affiliate marketers, it’s essential to showcase the value your product or service can provide. They’ve spent a considerable amount of time building trust and authority with their audience, and selling a bad product could damage their reputation.
So it’s in their best interest to recommend things aligned with their mission.
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Who is a Business Partner?
When you think about a business partner, you may think of a co-founder, investor, or primary shareholder. In this case, we aren’t talking about that type of partner, but the idea of fostering a relationship through a partner program is similar to having shareholders. In this case, we are talking specifically about referrers, resellers, MSPs, integrators, consultants, etc.
While affiliate programs primarily focus on conversions from a wide audience that the affiliate may not know personally, other partnerships focus on associating with the right people and bringing attention to the brand on a one-to-one basis.
How Business Partner Relations Work?
Partners typically connect with a brand through sponsorships, endorsements, indirect marketing, and even long-term content distribution agreements.
Sponsorships and endorsements have long been effective marketing techniques. They are quite common in sports and other highly watched activities, but there's no reason why they shouldn't work in business-to-business partnerships, either.
Referral and distribution agreements are also an effective way to grow your brand by using the sales networks of other businesses and services. Partners will typically retain a percentage of sales or purchase items from you at a discount in exchange for giving access to their network.
Why are Affiliates Considered a Type of Business Partner?
Affiliates are business partners because they are a part of your business’s sales channels. By pitching your product, they associate themselves with your brand and company.
This lends their credibility and support to the business. Despite that, it can also go in the opposite direction if they aren’t very reputable or if they are shady about their practices.
Due to the performance-based metrics and focus on cost-per-action (CPA) metrics, not all partners will or should become affiliates. Like in a typical workplace, not everyone wants to work for a commission. Certain partnerships offer advantages beyond just sales.
Resellers are also business partners, but they may want to receive other perks such as product discounts that they can then mark up with their own services on top (this is typical of service providers using certain technology platforms) or "vanity" perks such as badges and events.
Affiliate vs. Partner: Which Program Fits Your Business Best?
Partnerships provide a great way to expand marketing and sales efforts and grow your brand through representation by other people.
As a subset of partnerships, affiliates provide a more direct approach with performance-based compensation to encourage continuous sales. Both programs provide their own unique advantages and can significantly benefit businesses that implement them correctly.
When Does an Affiliate Program Work Best?
Affiliate programs are best suited for marketing efforts focused on high conversion rates and pushing sales to a specific product offering. Since these programs are incentive-based, partners are encouraged to sell as many of their products or services as possible.
Finding the right affiliate marketer will allow you to pitch directly to your ideal audience, resulting in higher conversion rates and a more dedicated customer base.
How a Long-Term Partner Program Can Benefit You?
Establishing a long-term partner program can provide quite a few advantages to you and your business. Quality referral and reseller partners lend their image and reputation to your products, which can add credibility and legitimacy. This can be much more valuable than just an affiliate.
Long-term partners offer access to much of their networks and audiences (whereas affiliates have a closed-garden approach to getting access to their audience), which can expand brand awareness and reach and provide a platform for continued business growth.
A referral partner will most often refer someone they know. With a reseller, it's similar but a lot more sales-driven rather than word-of-mouth-driven. An affiliate doesn't know the potential end customer personally; they speak to a wide audience of people who may convert.
Design a Partner Program That Works Great for Your Business
Designing a partner program is no easy task, and it can take considerable upfront work to get it going. However, the benefits and rewards partnerships offer can be game-changing.
Consider which partnership might benefit your businesses the most and then strategize. Set a budget and test a few different methods before launching your program.
Once your partner program is established, it’s time to manage and maintain it. This process takes some time, so be patient and keep it focused.
This can be a considerable amount of time and work without any tools.
That's why platforms like Kiflo were designed to simplify the process of designing your programs and save you considerable time. Kiflo automates much of the day-to-day work required in a partner program so you can focus on other parts of your business.
Conclusion
It's time to choose the program that will work best for you now that you know what affiliate and partner programs have in common and what differentiates them. Whether you want to manage an affiliate, partner, or referral program, you will need a platform that will make it easier to create your programs and save you a lot of time.
