Extole gives social advocates reason to 'share'

Most of us recommend products, services, companies, whatever, because we feel super-positive about them. And time and again, word-of-mouth recommendations among families, friends and peer groups are cited as one of the most cost-effective forms of marketing going.

Against that backdrop, a three-year-old technology company called Extole has created what it calls a social marketing service with a very simple mission: It rewards your company's most vocal advocates within social networks simply for saying what they are already saying.

"We help harness consumer advocacy and word of mouth and put it to use for your company," said Angela Bandlow, vice president of marketing for Extole.

Using Extole, companies can reward customers who share their messages or talk about them within social networks such as Twitter, Facebook or via more traditional forums such as email or blogs. (Pinterest is being added in the near future.) These rewards can be very specific, such as a $15 coupon for a future purchase or discounts.

One customer example is SquareTrade, which sells extended warranties for consumer electronics devices. SquareTrade used Extole to help run a referral program that included two very specific incentives: a $10 discount for every referral as well as an offer that included an incentive for the people receiving the references. In the first 10 days, the campaign generated more than 60,000 social shares on Facebook, Twitter and email, as well as more than 500 new customers, according to Extole.

Digital pen maker LiveScribe is another Extole customer. It has been using the social marketing service since November 2011, offering brand advocates $15 paid into their PayPal account very time they make a referral that results in a product purchase. Referred friends receive a 15 percent discount on buying a LiveScribe smart pen. An example of their campaign imagery is below.

Steffanie Johnson, director of marketing for LiveScribe, said her company's products lend themselves to the sort of programs that Extole offers. That's because the average LiveScribe customer winds up demonstrating the digital pens to someone else an average of more than 19 times.

Using Extole, LiveScribe has identified more than 3,000 brand advocates that it actively targets with incentives, Johnson said. Each of those advocates has shared information about LiveScribe with an average of 3.5 other people, although that number is climbing, she said.

One of the most surprising results of its work with Extole is that, despite the discount, LiveScribe customers who have been referred via social marketing are making average orders that are approximately 50 percent larger than customers who come from other campaigns. "Currently, this is a very cost-effective way to acquire a customer," Johnson said.

Although LiveScribe did not share pricing, Johnson said her company is paying a flat fee for the service (it is being charged according to the number of advocates it is targeting with incentives).

Typically, Extole charges a standard subscription based on the volume of business that is being driving through its customers' brand advocates, Bandlow said.

Extole's concept has plenty of big-name advocates, including Vistaprint, Shutterfly, Kate Spade New York, J. Hilburn, The New York Times, and SkyMall, which are all customers. During its most recent quarter, it added 40 new customer including T-Mobile and it secured an additional $10 million in Series C round venture capital funding in February 2012.

It makes sense to me that smart brands would make use of social channels to help tell their stories, essentially putting the power of recommendations on steroids. Still part of me is skeptical: would it color your friend's recommendation of a product or service if you knew he or she was getting an incentive to tell you about it? I'm not sure of my own answer, but it's something your team should consider carefully as it experiments with social marketing.

This post was originally published on Smartplanet.com