It’s no surprise that consumer and business buyers are more likely to buy something on the recommendation of a friend or peer – “earned advertising” as Nielsen calls it. I noted this rise of referral marketing in a post called The New Marketing Funnel, which examined how buyers behaviors have changed in the wake of the digital revolution. Some of today’s most successful startups have made referral marketing the backbone of their demand generation activities. The reach that companies can achieve with referrals is wide; 39% of marketers use referral regularly and 43% of these acquire more than 35% of new customers through referral. That is why I am proud to announce our investment in Extole.
Optimizing the Referral Process
Building a sophisticated referral and advocacy program in-house can be costly and complicated. The Extole platform makes it possible for marketers to go beyond paid search and SEO – to amplify the passion of their own members and loyal base to acquire new, passionate, paying customers. Existing customers are a company’s biggest champions and people rely on their peers for suggestions on products and services. With the Extole platform advocates receive a unique referral link to share with friends. When a friend purchases through the link, both the friend and advocate get rewarded.
The appeal of Extole also comes from the fact that the marketing department, not IT, manages the platform. Extole provides the software to help companies test incentive programs, manage multiple campaigns, and easily access analytics. The platform helps to mitigate user fraud. Extole customers can even save companies money on customer service by deflecting calls for referral rewards.
Fills a Void in Demand Gen and Customer Acquisition
We’ve witnessed a growth in essential platforms for acquisition and demand gen over email (ExactTarget, Constant Contact), search (Kenshoo, Marin Software), and marketing automation (Marketo, HubSpot). Until now, however, there’s been no enterprise platform for referrals. Extole is delivering the key “third channel” for online marketers.
A quick review of Extole’s customer shows that many companies had a latent need for this platform. The company has already signed deals with companies from Boden, DocuSign, Fleetmatics, Intuit, and Kraft.
Extole is still a startup but its management team isn’t new to this game—or each other. Many of the senior executives worked together at a previous ScaleVP backed company – Omniture/Offermatica and I am thrilled to have them join the ScaleVP portfolio again. Welcome Extole!