Affiliate Marketing vs. Loyalty Programs - What’s the Difference?

Affiliate Marketing vs. Loyalty Programs - What’s the Difference?

Are you looking for a way to always have a steady influx of new shoppers? Ready to improve your relationship with your current customers to keep them coming back for more?

While there are multiple ways to achieve these goals, affiliate marketing, and loyalty programs are the most common.

To help you understand these concepts, our CAKE team of eCommerce experts has put together this brief guide detailing what they are and why they make a sweet little addition to your overall marketing mix.

Keep reading to learn about affiliate marketing and loyalty programs, plus the differences between the two.

What is Affiliate Marketing?

Affiliate marketing is a program where affiliates receive a commission for marketing a brand’s products and getting someone to make a purchase from their unique link. In the eCommerce atmosphere, this is essentially someone who is working on your behalf to increase sales.

If you think about it for a moment, this is almost like having a commissioned sales team available to help you push certain products. Their incentive is the commission, which can range based on your average order value or product cost (usually in the 7%-30% range – the lower the cost of the product, the higher percent commission). 

Affiliates can be anything from a coupon site, cashback site, personal blog, news outlet, or even an influencer, as long as they are part of the program. Popular programs in the space are Rakuten Rewards, ShareASale, Commission Junction, and more. 

Statista reports that the affiliate marketing industry will reach $8.2 billion annually by 2022. To give you a little perspective, this figure was at $5.4 billion in 2017. That means there’s plenty of growth happening with willing affiliates looking to push products just like yours.

Benefits of Affiliate Marketing

What are the benefits of an affiliate marketing program? For starters, this can be an incredibly lucrative way to create deals with leading influencers on Instagram and top coupon sites that seal the deal with first-time purchasers. When these affiliates know they’re getting a commission off each purchase, they’re much more likely to try to promote to their audience.

As a brand, this equates to big profits with minimal cost. All you’re responsible for is giving a small percentage of each sale linked to the promoter, which can really increase sales in a big hurry.

What Are Loyalty Programs?

Loyalty programs give repeat customers an incentive to come back. This can be in the form of points, free products, rewards, coupons, etc. This is often the type of structure you see major retailers using to keep shoppers coming back for more, both online and in-store.

In addition, there are different kinds of loyalty programs available. The most common are point-based, tiered, paid, value-based, and coalition.


This is one of the more simple loyalty programs. The customer earns points on every purchase and can redeem them in the form of a discount code, free item, etc. This works best on brands that promote frequent and short-term buys.


With this type of loyalty program, the customer is given a small reward when they sign up at first and better rewards as they continue to make repeat purchases over time. This usually works better for high-value and high-ticket items.


Paid loyalty programs are where the customer actually pays an annual fee for access to benefits. This can be a year of free shipping or even a discount on every purchase. As an example, Amazon Prime does this.


This type of loyalty program really requires you to know your target audience and find rewards that matter most. Often, this means in other ways besides free products and discounts. An example might be getting access to a special drawing for a high ticket item or something else of value.


Coalition loyalty programs are where multiple brands work together to provide tons of value to their customers. The great benefit of this is that it cross promotes different audiences to grow the customer bases of all included companies.

Benefits of Loyalty Programs

Loyalty programs are great because they really encourage customers to keep coming back to make future purchases. In addition, they build trust between the consumer and the brand over time.

To look at a few stats, customers are 50% more likely to try a new product and spend 31% more than new customers. It also costs 5X more to acquire new customers than the ones you already have. This is why having a reason for them to keep coming back is so important.

Difference Between Affiliate Marketing and Loyalty Program

As you can tell, there’s a pretty significant difference between affiliate marketing and having a loyalty program.

One focuses on bringing in new clients, while the other relates to getting existing customers to make future purchases.

The overall cost between affiliates and loyalty programs is about the same, usually either in the form of a commission or a discount.

Can You Have Both?

While it might seem like an awful lot to take on for your eCommerce brand, it certainly is possible to use both affiliate marketing and loyalty programs to drive sales.

The benefits of this would be having an affiliate pushing new customers towards making a purchase. Likewise, your loyalty program would keep those shoppers coming back for more.

While the combination can be tricky to initiate, the result is a robust incentive program that gives affiliates with loyal audiences a reason to push your brand while also giving those customers who do buy a reason to return.

Wrap Up: Affiliate Marketing vs. Loyalty Programs

As you can see, both affiliate marketing and loyalty programs are designed to give customers a reason to shop with you over the competition. By offering one or both, you can help spur sales and give shoppers a reason to make a purchase.

Looking for more info on how to start a loyalty program or affiliate program on Shopify? Our CAKE team of experts is here to help. Please contact us today for details.