Before social media marketing there was word-of-mouth marketing, a form of marketing that, despite all our tech innovations, has been identified as one of the most valuable forms of marketing due to the fact that it drives sales through trust and assurance. Families tend to buy the same brand of car as one another and girlfriends constantly influence the brand of makeup each other wear. It’s a constant struggle to keep up with the Joneses, or should I say Kardashians?
Word-of-mouth and brand recommendation rates highly among consumers. 84 percent of consumers say they either completely or somewhat trust recommendations from family, colleagues and friends about products and services.
Like many Australian entrepreneurs Aaron Woolf shops online and contributed to the $19.3 billion generated in online sales last year. However, he saw a gap in the market for where retailers, especially smaller ones struggled to attract new customers and engage with current ones in a cost effective way.
This led to Woolf launching a new digital shopping platform called Referboard. The platform drives sales and brand awareness through peer-to-peer referrals of online content from clothes, to furniture, hotels and restaurants. The platform can be best described as when Pinterest met Shopify.
“Each year more and more online sales are driven through social communities,” said Woolf. “Referboard taps into the 74 percent of consumers making purchase decisions through inspiration from their favourite digital influencers like Imogen Micklewright-Hill, Brooke Nash, Prue Richardson and Ruby Schofield, all the while providing our retailers with targeted data about where sales are coming from.”
Referboard allows anyone to recommend any product from more than 350 registered retailers like ASOS, The Iconic, Nike, Showpo and Seafolly. For each sale generated, bloggers, influencers, or just the average consumer can earn a commission. Referred sales earn a referrer a five percent sales commission, while helping shoppers make more informed purchase decisions.
Referboard works by online shoppers generating a profile and downloading a browser extension to either Chrome or Firefox, allowing them to refer the products they like to either their whole audience or directly to an individual. Consumers can search through the registered shops on Referboard and refer products by clicking on the browser extension.
A personalised profile also allows consumers to create their own wardrobe and become major influencers of style and fashion for their friends, family or other followers.
Woolf says the startup’s model is based on cost per sale and drives revenue from what their audience is referring and what referrals lead to sales. To create transparency for retailers, Referboard has created a dashboard that shows merchants exactly what products are referred and the items that are purchased through those leads.
“Referboard provides an honest and transparent digital advertising platform for retailers to leverage the power of referral marketing. At the same time it rewards people for doing what they do on a day-to-day basis – talk about their favourite things,” said Woolf.
The importance of style sharing and peer-to-peer networks has also led to startups like Melbourne-founded HUMM and South Australian fashion app Remoda, which are also tapping into the sharing economy. Both startups are working in the crowded fashion space, allowing users to share their wardrboes.
Instead of placing all eggs in the one basket in the fashion niche, Woolf wanted to focus on the digital consumer market as a whole, leveraging across multiple verticals. Referboard sits between online retail, affiliate advertising, referral and influencer marketing and closes the loop between all four. The startup targets multiple areas of online consumer shopping.
“Anything that can be bought online can be referred. Referboard also has patented technology, which makes the referral process incredibly simple meaning millions of people can use it effortlessly,” explained Woolf.
Since launch Referboard has bootstrapped, but with international expansion in its sights will need to raise funding within the next 12 months. The startup is also experiencing traction in Australia, Europe and the US and plans to open offices in New York and London by 2017.
Image: Aaron Woolf. Source: Supplied.