SaaS Affiliate vs Referral Program (Key Differences)
Written by Joran Hofman, Founder of ReditusThe key difference is who promotes you. In an affiliate program, people outside your company, such as bloggers, newsletter writers, agencies and consultants, promote your software and earn a commission when someone they referred becomes a paying customer. In a referral program, your own users recommend you, usually from inside your product, and get a reward.
What is a SaaS affiliate program?
Affiliates promote your software to their own audience. They earn a commission on the payments of the customers they bring: in B2B SaaS usually a set percentage for a set number of months, and sometimes for the customer's lifetime.
- Who promotes you: people outside your company who reach your ideal customers in bulk.
- Reward: a commission, paid when a referral becomes a paying customer.
- Tracking: a personal link (on Reditus, your website address followed by ?red= and the affiliate's slug) or a coupon code (Stripe only).
- Best for: reaching people your own users can't reach.
More: what is a B2B SaaS affiliate program?
What is a SaaS referral program?
A referral program turns your users into advocates who recommend you to colleagues and peers. On Reditus it lives inside your product, as the Reditus widget or as a fully custom flow on the API.
- Who promotes you: your existing users.
- Reward: whatever fits your product: credits, an extra trial period, a discount, money, or anything custom through webhooks.
- Tracking: each advocate's own referral link, shared from inside your product.
- Best for: turning happy users into a growth loop inside your own app.
More: what is an in-app referral program?
The differences side by side
- Who: affiliates are outside your company; advocates are your users.
- Why they do it: affiliates promote you to earn money, so your offer has to make sense commercially. Advocates recommend you because they like the product, and the reward gives them a push.
- Reward: affiliates earn commission for a set period; advocates get the reward you choose.
- Volume: an advocate refers a few people, one to one. An affiliate with access to your ideal customers in bulk, like a newsletter, an agency or a blog that ranks, can send many.
- Where it lives: the referral program sits inside your product. The affiliate program has a public landing page where affiliates apply (or join straight away if you switch on auto-accept), and, on Scale Up or Enterprise with an annual commitment and a completed installation, a listing in the Reditus marketplace.
- Work to run it: a referral program mostly needs a reward that is worth it and the right moments to ask. An affiliate program needs ongoing recruitment and activation.
- On Reditus: both are included in every paid plan and run on the same installation.
Which one should you launch first?
Neither first: launch both together and start with your own network. Your users go into the in-app referral program; consultants, agencies and partners who reach clients in bulk go into the affiliate program. The full reasoning: should you start with referrals or affiliates first?
Can you run both at the same time?
Yes. On Reditus both programs share one tracking script and one cookie. The last click before signup decides who gets the referral, advocate or affiliate, and after signup it never moves. More: can you run referrals and affiliates together?
FAQ: affiliate vs referral
Which program is cheaper to run?
It depends on what you pay. Commissions are only paid on paying customers, and an advocate reward does not have to be cash: credits or an extra trial period work too. Price both against what a new paid client costs you through your other channels. On Reditus both programs are part of the same plan.
Which one brings more customers?
A personal, one-to-one recommendation is still the best way to get someone to use a product, and those customers tend to stay longer. But each user only knows so many people. Affiliates who reach your ideal customers in bulk can bring volume. That is why we recommend running both.
Do affiliates need to be customers?
No, most aren't. Agencies and consultants who use your product are the exception, and they belong in the affiliate program too. Do give affiliates access to your product, so they can write about it from experience.
Can a SaaS company run only one of them?
Yes. A B2C SaaS, for example, can run the in-app referral program on its own: the affiliate program on Reditus is built for B2B SaaS.