Y Combinator alum Curebit, an online customer referral platform that leverages social media for “word-of-mouth” advertising, has just raised $1.2 million in funding. The investors include 500 Startups, Karl Jacob, Auren Hoffman, Dharmesh Shah, Gordon Tucker, Alex Lloyd of Accelerator Ventures, and others.
The funding will be used for continued product development and a slight expansion to the team involving three new hires (two developers, one designer) to the company’s now five-person outfit.
Curebit, for those unfamiliar, works to optimize the referral systems for eCommerce platforms and software-as-a-service (SaaS) companies (See previous coverage here).
The startup offers a few different ways for businesses to take advantage of its tools, the first being a post-purchase campaign that allows customers to share the details of the purchase on Facebook, Twitter or via email, as soon as the transaction completes.
“We figured when’s a better time than when you’ve basically voted with your wallet, saying ‘hey, I like this store,’” explains Curebit Co-founder Allan Grant.
Companies can also use Curebit’s technology to build standalone referral pages that are accessible at any time, or in one-off campaigns meant to further the reach of existing referral programs.
The startup says it now around 1,000 customers, including everything from smaller, e-commerce stores to larger customers like Giggle.com and a newly signed (but unannounced) top 20 retailer and a consumer foods company. The technology is also available as a plugin for 14 platforms, including Shopify and Magento.
By leveraging social media for the word-of-mouth referrals, Curebit’s customers see higher clicks and conversions than in traditional campaigns, where, for example, customers may have come in by way of ads. The referrals are like personal recommendations from friends, and often include a benefit, like a discount for the new customer, or for both the new customer and the friend who’s doing the referring.
When either the customer or the friend gets a deal via the referral, Curebit is seeing 15%-25% share rates. When the deal is double-sided (both people benefit), share rates are 45%-65%. Meanwhile, only 3% share using the standalone share button. Curebit also sees 1 to 5 clicks per share, depending on the product.
More unique products seem to do better than commodity products, notes Grant. And Curebit’s conversion rates are generally 2 to 3 times higher than traditional methods, and, in some cases, have been as high as 30%. Even better, Curebit’s referrals pay off in terms of dollars spent at checkout, too.
“The other thing we’ve seen consistently on just about every single site is that people spend more,” says Grant. “The average order amount is higher, and it’s not just higher based on how much the discount is – it’s higher even beyond that, even when you take the discount out.”
It’s the personal nature of the Curebit-powered recommendation that’s freeing people up to spend, it seems.
Source:http://techcrunch.com/2012/01/27/yc-alum-curebit-raises-1-2-million-for-online-referral-system/
The funding will be used for continued product development and a slight expansion to the team involving three new hires (two developers, one designer) to the company’s now five-person outfit.
Curebit, for those unfamiliar, works to optimize the referral systems for eCommerce platforms and software-as-a-service (SaaS) companies (See previous coverage here).
The startup offers a few different ways for businesses to take advantage of its tools, the first being a post-purchase campaign that allows customers to share the details of the purchase on Facebook, Twitter or via email, as soon as the transaction completes.
“We figured when’s a better time than when you’ve basically voted with your wallet, saying ‘hey, I like this store,’” explains Curebit Co-founder Allan Grant.
Companies can also use Curebit’s technology to build standalone referral pages that are accessible at any time, or in one-off campaigns meant to further the reach of existing referral programs.
The startup says it now around 1,000 customers, including everything from smaller, e-commerce stores to larger customers like Giggle.com and a newly signed (but unannounced) top 20 retailer and a consumer foods company. The technology is also available as a plugin for 14 platforms, including Shopify and Magento.
By leveraging social media for the word-of-mouth referrals, Curebit’s customers see higher clicks and conversions than in traditional campaigns, where, for example, customers may have come in by way of ads. The referrals are like personal recommendations from friends, and often include a benefit, like a discount for the new customer, or for both the new customer and the friend who’s doing the referring.
When either the customer or the friend gets a deal via the referral, Curebit is seeing 15%-25% share rates. When the deal is double-sided (both people benefit), share rates are 45%-65%. Meanwhile, only 3% share using the standalone share button. Curebit also sees 1 to 5 clicks per share, depending on the product.
More unique products seem to do better than commodity products, notes Grant. And Curebit’s conversion rates are generally 2 to 3 times higher than traditional methods, and, in some cases, have been as high as 30%. Even better, Curebit’s referrals pay off in terms of dollars spent at checkout, too.
“The other thing we’ve seen consistently on just about every single site is that people spend more,” says Grant. “The average order amount is higher, and it’s not just higher based on how much the discount is – it’s higher even beyond that, even when you take the discount out.”
It’s the personal nature of the Curebit-powered recommendation that’s freeing people up to spend, it seems.
Source:http://techcrunch.com/2012/01/27/yc-alum-curebit-raises-1-2-million-for-online-referral-system/
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