Influitive Raises Another $7.3M To Bring The Peer-To-Peer Model To Marketing
Influitive, a marketing company that analyses data around social media, influencer networks and other peer-to-peer techniques to spread the word, has raised another $7.3 million — investment that it will use to continue developing its AdvocateHub marketing platform, as well as to build out its own sales and marketing teams, CEO and co-founder Mark Organ told TechCrunch in an interview.
The Series A round was led by new investors Hummer Winblad and Relay Ventures, with participation from existing backers Lightspeed Venture Partners, New Enterprise Associates, Illuminate Ventures, Resolute.VC and Common Angels, as well as several individual angels. The total now raised by Influitive is $11.05 million.
As part of the deal, Influitive is picking up two new board members, Lars Leckie from Hummer Winblad and Alex Baker from Relay Ventures.
The cynical ones among us might argue that most social networking today — being as it is open and free to use — is one big marketing vehicle. And the even more cynical ones might argue that there is less spontaneity of ideas and activity on social networks than you would think.
At the same time, though, what’s clear is that people no longer rely on traditional advertising or salespeople to tell them about how great a product is, turning instead to social networks.
“Customers rely on peer recommendations and reviews when they shop at home and rarely seek the counsel of a salesperson,” says Organ. “Those same behaviors are showing up in the workplace.” He notes estimates that buyers today can be two-thirds of the way through their decision-making process before they even contact sales.
So what a company like Influitive does is offer a kind of framework for brands to use all of the above to better effect.
Organ notes that what Influitive is doing is not strictly new. “Every sales and marketing executive understands and accepts that customer validation is a critical part of the B2B buying process,” he notes. “Prospective customers need to understand just how a product performs in the real world, and today, that information is shared with them in the form of testimonials, case studies, reviews and reference calls. So, in this regard, the concept of advocate marketing is not new or disruptive.”
What is new, he says, is how Influitive tackles customer validation. “Our approach encourages marketers to mobilize their customers first, and get them proactively sharing their product experiences in communities, forums and social networks where buyers are likely to be gathering information as part of the purchase process,” he says. “The intent is for buyers to find authentic, user generated content, opinions and experiences before requesting a reference call.” The other is how it is disrupting the entire way that companies use sales and advertising. ”Outsell your best sales rep,” as it notes on its homepage.
Among the services that a customer can initiate via Influitive’s AdvocateHub platform are identify, recruit, mobilize people who can subsequently be used in marketing campaigns, as well as to refer clients.
As Organ explains it, Influitive operates on a “freemium” business model. It has about 24 paying customers today, but “many times that” using its platform for free. Among its customers are Dell Kace, Eloqua, Ektron and Demandbase, which use the platform to communicate with its “advocates” to request sales references, ask them to broadcast messages on social networks, comment on product reviews, take surveys, go to “event swarms”, and generally evangelize on behalf of their companies.
Organ says that while originally a lot of its products were geared at smaller businesses, “We’re seeing a great deal of interest from larger enterprises than we had anticipated…While larger customers can be demanding, they also typically have more defined advocate programs in place and so we’re not starting from scratch.” Since launching in August 2012, Influitive has increased active advocates by 180%, sales by 145%.
It’s that kind of growth that caught the eye of VCs.
“We are seeing companies increasingly dependent on peer referencing for acquiring customers, and believe that Influitive’s advocate-centered, self-service approach is going to win out in a new multi-billion dollar Advocate Marketing space that is forming,” said Alex Baker, principal at Relay Ventures, in a statement.
It helps, too, at Organ was also the founding CEO of Eloqua, the marketing automation company that went public earlier this year.
“Influitive is exemplary of the kind of company in which Hummer Winblad looks to invest: at the forefront of an exciting market opportunity, management with a proven track record, and momentum that underscores and validates its market approach,” says Lars Leckie, managing director at Hummer Winblad.
Although the wider world of social media is full of companies looking to tap into things like influencer networks and viral marketing techniques, Organ believes that there aren’t any that have tried to bring this together into a single platform as Influitive has. “Our most common competitor is really a spreadsheet, or more likely, dozens of spreadsheets with customer names on them,” he says. “Most businesses have CRM systems and occasionally we’ll [get] an application for customer references. But in general, there have not been products like AdvocateHub focused on holistically managing and mobilizing all customer advocates in a central location.”
Longer term, Organ says that Influitive will integrate its platform further with social networks like Facebook, Twitter, LinkedIn and Quora. There is already some crossover there today, for example, Influitive is able to track when activities are completed on these networks, so that they can be rewarded accordingly. The company has also recently released a mobile app to further its touchpoints between its customers and those people they want to target.
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