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Why Affiliates and Referrals are the only Marketing Channels you need

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The marketing channels you decide to use as part of your marketing strategy depend on the resources you have and the products you sell. 

In this blog, we’ll talk about what a marketing channel is, the types of marketing channels, the workings of affiliate and referral marketing channels, and why these two channels are beneficial for your business. 

marketing channels

What are marketing channels?

A marketing channel is an online or offline, free or paid, medium or platform that helps businesses connect with their target audience. 

Ultimately, a marketing channel’s goal is to help a business get its offering (products/services) in front of its ideal buyers to sell to them.

Types of Marketing Channels

There are two main types of channels: 

Paid channels are places where you spend money to show advertisements to potential customers. 

Organic channels are places where you create and share content without paying to show it to people, like email or social media.

The mix of marketing channels you choose helps comprise the overall marketing strategy for your business. Most channels are digital marketing channels, which means they reach people who are browsing online. 

Other channels aim to catch people in person, whether that’s through hosting live events or sending out direct mail.

How do referral marketing and affiliate marketing work?

Affiliate marketing programs are pay-per-conversion, with the affiliate shouldering the responsibility of driving sales for the advertiser. 

An affiliate program’s success is contingent on locating advocates capable of reaching an advertiser’s target audience. 

Since customers will probably not know the advocate personally, many affiliates drive conversions through content marketing, such as by publishing reviews of products or services. 

The affiliate marketing model operates by leveraging the abilities of both the advertiser and the affiliate for a more effective marketing strategy. 

When it comes to referral marketing, it works together with word of mouth. 

Satisfied customers are usually more open to sharing a product or service they enjoy engaging with, thereby increasing brand awareness and building trust. 

In fact, a 2020 study found that 92% of consumers trust referrals from people they know. Furthermore, consumers referred by a friend are four times more likely to buy. 

A referral program typically contains a referral link and/or unique code that customers can share. 

Then, when one of the customer’s friends or family members uses the referral, they can redeem their reward. Rewards may come in various forms, such as discounts, free products, or sometimes cashback. 

Why should you consider affiliates and referrals as marketing channels?

1. Reduce marketing expenditures

If you’re just getting your SaaS brand off the ground, odds are good that your budget is tight. 

That’s why affiliates and referrals have an edge over traditional forms of marketing: it’s a performance-based system.

Because you only pay your affiliates and referral partners if they make a sale, you keep your marketing costs at a minimum. 

For instance, compare referral-based marketing to paid advertising. With a pay-per-click (PPC) campaign, you’ll need to spend precious marketing resources testing different keywords and strategies before you see a sustainable return on investment. 

But with affiliate programs, there’s less risk involved. Since you don’t pay your partners until they make a sale, you won’t run the risk of spending more than they earn on sales. 

If your SaaS business is in the early stages of growth, affiliate sales can improve your ROI and lower your customer acquisition cost (CAC), which is not only good for your bottom line; it’s more attractive to investors.

2. Keep track of crucial metrics and exercise fine control.

Every tech startup founder appreciates granular data analytics. Affiliate and referral marketing provides a high degree of partner performance metrics. This means you know exactly who buys your product and what motivates them to buy.

The detailed nature of website analytics allows you to accurately track your referral-based marketing efforts. Whether it’s through cookies, unique links embedded in your partners’ websites, or individual discount codes, you can easily determine where inbound visitors come from.

With this knowledge, you can avoid a lot of the trial and error involved in traditional SaaS marketing channels, such as paid advertising. 

Even though you’re partnering with third parties, you stay in control of the overall campaign. You choose your partners, commission rates, and the parameters of the partnership.

3. Extend the reach of your brand

SaaS customers trust industry experts and SaaS brands rely on word of mouth. If your affiliate program leans on the credibility of trusted authorities in your niche, your brand borrows some of that credibility and expands its reach to a wider audience. 

Referral-based marketing lets you share the work of building an audience. Since affiliates get a commission for every sale, they’re motivated to say good things about your product. 

 The best affiliates are customers who actually use your software, so offer an affiliate program to existing customers who trust your brand. That commission incentivizes already satisfied customers to spread the word about your tool in an authentic voice.

4. Produce high-quality leads

SaaS marketing channels bring a wide variety of traffic to your site. For instance, content marketing pulls in viewers who need answers to top-of-funnel questions, but may never decide to sign up for your tool.

Affiliate programs, on the other hand, have a lower risk of generating poor-quality leads. Assuming you’ve done the research to find the best affiliate partners for your brand, your affiliates are already familiar with your industry — and they’re likely already users of your product. 

Using influencer partnerships helps you skip several steps in traditional marketing campaigns. Since your affiliate’s audience is already made up of your target demographic, you don’t need to spend as much effort on top-of-funnel activities like attracting and nurturing potential customers.

They already come to your affiliates’ websites expecting to be guided by expert advice, which means they’re already primed and ready to purchase your tool.

5. Meet clients where they are

Consumers would rather do their own research and purchase software online instead of buying it from a reseller. In fact, a recent McKinsey report reveals that roughly two-thirds of B2-B buyers prefer to make purchases through remote or self-service eCommerce.

Using referral partners and affiliate advertising aligns your marketing strategy with your target customers’ buying preferences. 

When potential buyer begins researching solutions online, they’ll stumble across your affiliates’ content recommending your product. That potential buyer can then visit your website for themselves and make a purchase.

Partnerships make powerful SaaS marketing channels

In a nutshell, referral and affiliate partnerships benefit your SaaS brand by leveraging the credibility your partner has already established with their network. 

Because much of the groundwork has already been laid for you, you can minimize marketing costs, expand your brand’s reach, and generate high-quality leads—all while staying in control of your campaigns and tracking metrics essential for future growth. 

Of course, affiliate and referral marketing align with a key trend: the movement away from reseller-based purchases toward referral-based partnerships.

With the right combination of planning and technology, partnerships can bolster your business’s growth. 

Want to learn more about how Trackier can automate and streamline every part of the partnership life cycle? 

Reach out to us and request a free trial today.


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