Referral vs. Affiliate Marketing: Let’s Talk with Michael Cole

Yeah, so I think these are things where my definition might be different from someone else’s—it just depends on your perspective. To me, affiliate marketing is about working with third-party, external professional marketers, whereas referral marketing tends to be more about internal relationships, like your clients or business partners referring you. In terms of marketing strategy, they’re only separate because the platforms haven’t been able to track both for us. Affiliates are just one channel you use, referrals another, but all of that should be in the same platform so you can evaluate how each is performing in comparison to the other.

Yeah, so as a marketer, you should always start with referral marketing for the very simple reason that it’s easy to do. It’s always going to be your best customers. So much of our growth has been built on referral marketing—you get happy customers, and they spread the word, telling other people, “Hey, check out this platform.” Then that person signs up. A customer who comes through a warm referral is always going to be great. They tend to know more about what your platform does before they sign up, and they’re usually more experienced in the industry because they’ve already been with successful companies, so they ramp up a lot quicker.

Referral marketing is always your starting place. Then typically, affiliate marketing comes into play. Start with referral marketing because you can always refine that process as you go along. After that, you want to get some paid performance marketing going so you can have a steady stream of traffic month after month, which you can use for conversion rate optimization. Make sure your product works with paid marketing, that you have your funnel down to be successful, and then once you prove that external traffic can convert, you can launch your affiliate program. At that point, you’re leveraging third-party experts—people who live and breathe driving performance. But they’re still mercenaries. If they try your offer and nothing happens, they’re not going to keep trying; they’re the ones taking on the risk. You need to make sure they’re set up for success from the beginning, and that means you need to have your own funnels working before you start asking other people to do that work.

So yeah, one other thing I want to mention is that it’s been an ongoing lesson we’ve been learning at Everflow and improving on. So many companies want to have an affiliate or partner program, but they don’t know—they have this idea that it will be great, and they have no idea how to execute on it. They don’t know how to set it up, and they don’t know who to recruit once they’ve done it. You’d be surprised how many sign up with us, pay money, and then have zero idea of how to be successful, which is something we’ve really focused on.

For any new customer, we have mandatory onboarding where we train them on the platform, walk them through the setup process of getting all the conversion tracking, and then we actually recommend some partners for them to launch with. Once you get traction with affiliate programs, it’s pretty easy to keep scaling it. It’s very exciting for an affiliate to find a new place to promote, but there has to be some success before most of them can be successful on their side. So we’ve gone through a process where we realize that we just need to walk you through this process with hand-holding because it makes everyone’s life easier. Once you get traction, it just works—you just need to get to that point of traction.

Yeah, so in terms of successful clients, it depends all over the place, and a lot of times it’s about the fact that they had a confident strategy and knew which partners they wanted to start with. I mean, there are examples of a few ad networks out there, like DFO or Giddy Up, that are delivering millions of dollars in revenue for Shopify merchants every month just by managing really great media buyer publishers. So they set up, use Everflow to instantly integrate with the Shopify store, and then they start promoting for that merchant. That’s been an incredible success, and we’ve spent a lot of time making it as easy as possible for them to launch these relationships right away with their new merchant clients.

Then there’s mobile—everything is running around like agencies and ad networks. That’s just the fastest way to grow: if you have an app, set it up with an ad network, set up a good CPI and CPA, do a lot of anti-fraud work in between, either using the Everflow platform or MMP. There are many companies generating multi-millions in revenue every month just by generating app installs for brands.

And then the third set is the merchants themselves—companies like Bite Me or Bunk that basically manage specific publisher relationships, getting set up with media buyers to shore up channels they’re not used to. For example, I just had a really successful campaign with this amazing native ad company called Ad Vita, which was buying native ads on their behalf on a performance basis, and they generated about $26K in revenue in the first month by sending native ads to Bite Me, which is a key subscription.

Yeah, it’s always awesome. Man, it’s something that we’ve been focusing more and more on—doing this sort of pattern matching. Like, for this new e-commerce brand, here are some companies they should talk to that will help them get that first success, or get them to that one success that will now be in their top 10 best affiliates or partners.

So, yeah, I mean, I think it’s modern B2B SaaS companies—it’s not just about the technology, because the more advanced your technology gets, the more complicated it can be. And it’s even more important that you’re providing tons of support and success. For us, that’s always been our secret weapon: we take a ton of customer feedback, build features that our customers actually want, and excited customers become evangelists who refer business to us. And that’s part of why our growth has been so fast, because our customers refer other customers, and that’s the best way to find them.