A referral occurs when an affiliate directs a potential customer to a merchant's website through a link, advertisement, or recommendation. Tracking referrals is essential for attributing sales and calculating commissions accurately, forming the foundation of affiliate marketing attribution and payment systems.
Referrals are the core of affiliate marketing, as affiliates are rewarded for the traffic and conversions they generate. Effective referral strategies benefit both affiliates and merchants by creating value for all parties involved, including the referred customer who discovers relevant solutions to their problems.
Quality referrals involve pre-qualified prospects who have been educated about the product's benefits and are more likely to convert. In SaaS referral programs, successful referrals often involve customers who understand the product's value proposition and fit the ideal customer profile for long-term success.