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. The affiliate industry has evolved significantly, overcoming early challenges such as fraud and negative perceptions, and has matured into an accountable and effective channel for driving sales and brand growth.
These partner programs can help develop partnerships with other businesses, consultants, and people whose networks would otherwise be inaccessible without certain perks. Affiliate partners promote the company's products, earning commissions for driving sales or referrals, which enhances the reach and revenue of the business.
Understanding Affiliate and Partner Marketing
Affiliate and partner marketing are two powerful strategies within the affiliate marketing industry that businesses use to expand their reach and boost sales. Both methods involve collaboration with external entities to promote a company’s products or services, but they do so in distinct ways.
Affiliate marketing typically involves independent marketers who promote a company’s products through various channels, such as blogs, social media, or email campaigns. These affiliates earn a commission based on the sales or leads they generate, making it a performance-based marketing strategy. This approach allows businesses to tap into the affiliate’s established audience, leveraging their influence to drive conversions.
On the other hand, partner marketing encompasses a broader range of strategic collaborations. Partner programs often involve deeper, more integrated relationships with other businesses, consultants, or influencers. These partnerships can include revenue sharing, co-branding, and joint marketing efforts, providing a more comprehensive approach to market expansion. Partner marketing aims to create long-term, mutually beneficial relationships that go beyond simple commission-based transactions.
Both affiliate and partner marketing strategies offer unique advantages and can be tailored to fit different business goals. Understanding the nuances between them is crucial for selecting the right approach to drive business growth and achieve marketing objectives.
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 status can be a preliminary step leading to higher tiers like becoming a Partner, particularly in platforms like Twitch, reflecting a focus on quality partnerships and long-term growth rather than sheer volume.
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 in the Affiliate Marketing Industry?
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.
Partnership marketing encompasses various collaborative efforts between businesses, including affiliate and referral marketing, leveraging the strengths and resources of partnering entities for growth and efficiency.
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 with Revenue Sharing?
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. By redefining traditional perceptions of a marketing channel to embrace partnership marketing, businesses can access new markets and collaborate more effectively. 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.
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.
Key Differences Between Affiliate and Partner Programs
Affiliate programs and partner programs are both integral components of the affiliate marketing industry, but they differ significantly in their approach and scope. Understanding these differences can help businesses choose the right program to align with their marketing strategies and goals.
Affiliate programs primarily focus on leveraging the reach of independent marketers to promote a company’s products or services. Affiliates use their platforms, such as blogs, social media, or email lists, to drive traffic and generate sales. In return, they receive a commission for each sale or lead they produce. This model is highly performance-based, making it a compelling and lucrative channel for many traditional affiliate marketers.
In contrast, partner programs involve a more direct and collaborative relationship between the company and the partner. These programs can include a variety of partnership types, such as resellers, referral partners, or strategic alliances. Partners often have a more significant role in the marketing and sales process, sometimes even co-developing marketing materials or participating in joint campaigns. This deeper level of collaboration can lead to more substantial and sustained business growth.
While both affiliate and partner programs aim to increase a company’s reach and sales, the level of involvement and the nature of the relationship with the company differ. Affiliates operate more independently, focusing on driving immediate conversions, whereas partners engage in more strategic collaborations that can offer long-term benefits.
Relationship Depth and Control
One of the most notable differences between affiliate and partner programs is the depth of the relationship and the level of control each party has over the marketing efforts. This distinction can significantly impact how a business manages and benefits from these programs.
In affiliate programs, the relationship between the company and the affiliate is often more transactional and less personal. Affiliates promote the company’s products or services through their unique affiliate links, and their primary goal is to drive conversions to earn commissions. This setup allows affiliates to operate with a high degree of independence, but it also means that the company has limited control over how its products are marketed. Many traditional affiliate marketers thrive in this environment, as it allows them to leverage their existing platforms and audiences with minimal interference.
Partner programs, on the other hand, involve a more integrated and collaborative relationship. Partners often work closely with the company to develop marketing strategies, create co-branded content, and align their efforts with the company’s overall goals. This deeper level of collaboration provides the company with more control over the marketing message and ensures that the partner’s efforts are closely aligned with the brand’s values and objectives. For example, Twitch partners often collaborate with the platform to create exclusive content and participate in promotional events, enhancing both the partner’s and the platform’s visibility.
The choice between affiliate and partner programs depends on the level of control and relationship depth a company desires. While affiliate programs offer a more hands-off approach, partner programs provide opportunities for more strategic and controlled marketing efforts.
Compensation and Investment
The compensation structures and investment requirements for affiliate and partner programs are another critical area where these two marketing strategies diverge. Understanding these differences can help businesses allocate resources effectively and choose the right program for their needs.
Affiliate programs typically operate on a commission-based compensation model. Affiliates earn a percentage of the sales or leads they generate through their marketing efforts. This performance-based approach makes affiliate programs a cost-effective way for companies to expand their reach without significant upfront investment. Affiliates, in turn, benefit from the potential for high returns based on their ability to drive conversions. This model is particularly appealing to many traditional affiliate marketers who prefer the flexibility and potential earnings it offers.
Partner programs, however, often require a more substantial investment of time and resources from both the company and the partner. These programs may involve revenue sharing, co-marketing budgets, or other financial incentives to support the partnership. For instance, a reseller partner might receive a discount on the company’s products, allowing them to sell at a markup and earn a profit. This more significant investment can lead to more substantial returns, as partners are often more deeply involved in the marketing and sales process, contributing to long-term business growth.
While affiliate programs offer a lower-risk, performance-based compensation model, partner programs require a more considerable investment but can provide more substantial and sustained benefits. Companies must weigh these factors when deciding which program aligns best with their business goals and resources.
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.
Benefits and Challenges of Affiliate Programs
Affiliate programs offer a range of benefits that make them an attractive option for businesses looking to expand their reach and drive sales. One of the primary advantages is cost-effectiveness. Since affiliates are compensated based on performance, businesses only pay for actual results, making it a low-risk investment. Additionally, affiliate programs can significantly increase a company’s visibility and reach by leveraging the affiliate’s established audience and influence.
However, affiliate programs also come with challenges. One of the main issues is the risk of affiliate fraud and abuse, where unscrupulous affiliates may engage in deceptive practices to earn commissions. Tracking and measuring the effectiveness of affiliate marketing campaigns can also be difficult, as it requires robust analytics and monitoring tools. Moreover, there’s the potential for negative impact on brand reputation if affiliates use aggressive or misleading marketing tactics.
In contrast, partner programs offer several distinct benefits. These programs provide increased control over marketing efforts and messaging, as partners often work closely with the company to develop and execute marketing strategies. This collaboration can lead to more substantial returns on investment and the opportunity for strategic collaborations and innovative solutions. For example, Twitch partners often engage in exclusive content creation and promotional events, enhancing both their own and the platform’s visibility.
However, partner programs also present challenges. They require a more significant investment of time and resources, as building and maintaining these relationships can be resource-intensive. There’s also the risk of partner conflict and disagreements, which can arise from differing goals or expectations. Additionally, like affiliate programs, partner programs carry the potential for negative impact on brand reputation if not managed carefully.
Overall, both affiliate and partner programs offer unique advantages and challenges. Businesses must carefully consider their goals, resources, and marketing strategies to determine which approach will best support their growth and success.
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. Strategic collaboration can be a key element in designing an effective partner program, allowing businesses to leverage each other's resources for broader audience reach and more impactful marketing campaigns.
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.
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.
