Today San Francisco-based Extole, a consumer-to-consumer social advocacy platform, announced that it has closed $7.6 million funding from existing investors Shasta Ventures, Norwest Venture Partners, Redpoint Ventures, and Trident Capital. This comes after the company reported significant growth in 2012, adding to its growing client list which includes brands like Shutterfly, T-Mobile, Seamless and Zazzle. Founded in 2009, the company raised $5 million in funding in 2010, and most recently added $10 million in funding in February 2012 also led by Shasta Ventures.
It will use the funding to continue scaling its growth and accelerate product development. “Our funding is really going to be focused on scaling the team and our investment in the referral eco-system. We’re building out some new functionality and some new products around managing advocates and incentivizing sharing,” said Jim Barnett, Chairman of the Board at Extole and General Partner at Shasta Ventures in an interview with BetaKit.
The company’s platform allows brands to build custom social referral campaigns in which they first select a reward an advocate will earn for each successful referral, and specify the discount the referee will receive on their first purchase. They then create a link to the campaign on any one of their consumer-facing channels including their website, email marketing campaigns, or Facebook, among others.
After an advocate shares the deal through any one of the multiple channels, brands can track and monitor the activity through Extole’s backend dashboard and figure out which advocate is driving the most referrals so as to provide additional incentives to that segment. Brands typically enter into an annual or longer-term agreement to use the SaaS platform, with the price varying according to the size of the business.
There are other platforms out there like Linksy, which focuses more on making it easier for brand’s top advocates to share content and deals, to Influtive’s AdvocateHub which is more focused on driving B2B sales, in addition to influencer marketing platforms like Klout or Kred. However, Extole’s referral management solution aims to give brands all the necessary tools to drive sales and engage their community. Barnett also explained why companies choose Extole over building their own in-house referral management platform.
“There’s a lot of rewards management, back-end technology that’s propriety around detecting fraud. You can imagine if people are providing discounts…there’s the potential for fraud,” Barnett added. “So it needs to be done professionally and securely. It’s the combination of those two plus our analytics and insights which is really why people prefer to go with a solutions like ours.”
The company will continue to focus on helping companies connect with their most powerful referrers, and it will also be releasing some additional features in the first half of 2013, although Barnett declined to go into detail. With brands increasing looking to the social web to drive sales rather than just promote their band, more and more companies will look to leverage solutions like Extole to tie ROI into their online activity. Whether consumers will want to use brand-level solutions like Extole or DIY affiliate marketing platforms like Referly is a different question, but the rewards available will likely dictate usage.