Why is influencer marketing effective? By 2017, its 4th year in business, FOREO has been selling one device every three seconds with a smart multi-channel strategy. Making it one of the biggest independent brands in the fast-growing beauty tech vertical.
Attend this keynote to discover how affiliate marketing has been helping to achieve this, with its own sales plus by amplifying the reach of other channels.
Identify current and upcoming trends in hybrid influencer marketing partnerships, other top-funnel affiliate types, and multi-network strategy and partners that influencers, affiliates, and merchants should be aware of.
Comprehend why the very same partner working with the very same brand, can deliver strong sales with one campaign but just brand awareness with another action.
Frank Ravanelli Speech Transcript
Good morning everyone. Thanks for being here with me to discover how at FOREO, we sold 1 device every 3 seconds.
We start from my own short story, FOREO’s pillars of success. Then, I will share 7 takeaways, which contributed to our success in business, plus one.
I will also share five practical examples of how these approaches have been used to bring sales and to bring reach to FOREO. And at the end, I will mention a couple of opportunities for affiliates and IT developers, which I think are very interesting.
My Path On Both Sides Of The Industry
So, why I’m here, I’ve been on both sides of the fence. I’ve been an affiliate myself, I’ve been a superaffiliate. Most of the SEO techniques for forex, for nutra, for eGaming, you name them, probably I’ve used them sometimes in the past.
At the same time, I’ve been an affiliate manager for several US programs. And now I lead a team of affiliate managers for FOREO.
The reach of FOREO. We’ve been in business for 5 years. Over 3,000 people in the company. As an affiliate team, we manage more than 10 affiliate networks.
We are active in more than 40 countries. And last year, we made slightly over 1 billion. This year, as of the end of summer, we were already at that level.
One thing that I want to make sure everyone understands is to achieve such level of sales and awareness, it’s not a one-man achievement. It’s a lot of teamwork.
You may have seen FOREO on a Star Trek Discovery. In that case, a toothbrush. On The Ellen Show. Celebrities mentioned it in interviews.
Before Versus Now
So my story before, versus now. I’m very happy that I was an affiliate myself.
However, my success at that stage was like linear. Every time I started something, I restarted from zero. When you’re part of the company, the success becomes exponential.
So what you do builds on what other people have done. That’s why I love this new approach to business.
So how does FOREO do it?
Step one, no matter how hard you work, how great strategies or how great a product you have, you must have talent to implement it, if you want to do it on a global scale.
So all my team members are remote, they work from home. They work from their home country, wherever is closer to the affiliates.
What’s the challenge? To find talent and to keep it.
So how do I do it?
First, I select. I kind of dropped posting job ads. I basically do headhunting. It’s more time-consuming but it gets better people.
I test them before I train them extensively, we just throw them, baptism by fire. If they swim, they swim, if they sank, they were not suitable for us.
The ones who survive, they get educated and trained in the business. And once a couple of months of first time in my team is over, or they get promoted, or usually they get phased out.
These are some of my team members. And also some of the business partners we have here. Especially here in Asia.
Second the pillar of success is localisation.
As any international lifestyle brand, first part of a market we attract are global, cosmopolitan people. So these people, they have credit cards. They speak English perfectly.
Okay, so that was stage one of success.
However, when we want to grow in each market, we require localisation, local currencies, and local payment methods.
So our website is available in several languages. Turkish, Korean, Japanese, English, French, Italian, and so on.
At the same time, there are some markets which are too hard even for a medium-sized business to penetrate by its own.
Partnering With The Giants
So in this case, we start partnerships. Some markets are very, very peculiar in terms of language, in terms of customer support, in terms of payment methods. And it would not be cost-effective for us to do it. So we prefer to find local partners.
Example of partners we have, Harrods. So in UK, we’re strong ourselves, but it’s good to associate ourselves with well-known international brands. Sephora, both in store and online, we are present in most of our markets where Sephora is.
A bigger success story is Tmall, for 11-11, which is singles day, which now is bigger than Black Friday in terms of sales volumes. We are consistently, for the last 3 years, one of the best-selling products and the best-selling product in the beauty category.
One example of how we apply this.
We run some campaigns in the UK for singles day. And we partnered with a local retailer.
So we were not promoting sales on FOREO.com but we were using affiliate marketing, paying flat fees over placements, and send the traffic to the retailer. While the retailer was paying the CPS part through his own affiliate program.
Why we do this?
Even if we have lower margins because when we sell through retailers, we make less than when we sell on our own website, we keep a retailer happy.
They reciprocate in terms of offline visibility. And some cases, they have high conversion rates.
In-house Affiliate Programs
In-house affiliate programs, that’s mandatory. No matter how many networks you partner with, you must own the most important relationships, especially with influencers.
So we basically use HasOffers for in-house program.
At the same time, as for e-commerce, we localise but we also partner with the local giants. When it comes to affiliate marketing, we have our own program. But we also partner with Networks that are very strong in specific geos.
What we understood is that even if it may be a bit counterintuitive, but usually the second choice in terms of local networks in a given geo is usually the best choice.
So when we go after the top one affiliate network in a specific area, usually, they are already overloaded with work. They have very high fees, they have a long waiting time.
So usually, we choose the second, by size, affiliate network in a specific area.
Many times we don’t have integration fees. We are bumped ahead in the queue and we get better service. And in the end, most of the fees, which are present in one network are also present in the other network.
Then partner it with app. In some markets, millennials represent one of the most important segments for us. Especially for Luna Mini 2. And some markets are mobile only or mobile first.
So there is no affiliate marketing without partnership with mobile affiliates.
Example, last year we partnered we Meitu, which is the developer of BeautyPlus. It’s an app, which has filters and so on.
So people were able to use the filter and see the effect of FOREO on the skin. They could use the toothbrush and so on. Then take a picture, share it, post it online, and have a chance to win a device.
What did it mean for us?
So as you can see on similar web, we have usually, 800 to 1.2 million visitors per month. This partnership alone brought us more than 1.2 million in traffic and also some sales.
For us, this campaign was very successful in terms of reach. It brought us in front of 1.2 potential buyers in new markets.
And that’s the eight pillar of successful affiliate marketing, which surprise, surprise is influencer marketing. But being part of an affiliate program, we do only hybrids.
Hybrid Influencer Marketing
So we pay a flat fee and a CPS or of course, CPS only. But we never pay flats only. It may be a bit different from the previous presentation. We agreed to provide a flat fee, so it covers the cost of creating the content for the influencer. Fair enough.
However, the real profit comes from performing. So that’s why we have a CPS.
I think this approach of influencer marketing is becoming necessary.
From one side, there are tons of brands who are courting the influencers. So if you just give them a CPS, we say, “Thank you so much, I’m just gonna go with someone else.”
At the same time, as a brand, we need to see return on investment. We tell them, “Okay, if you are a good influencer, with the cps you will make way more than you would’ve made with the flat fee only.”
Some influencers run away when you talk about the CPS component. Fine, it means that we already know they cannot perform. So, as part of my affiliate program, it means I cannot work with them.
Some of them demand the CPS because they know that they will make more money in the long term. That’s a very good sign.
Aligns Interests Of All Parties Involved
As I mentioned, it aligns interests of all the parties involved. And what’s very important is scalability.
We need to keep getting this influencer in, and we need to keep them, and we need to scale up campaigns.
So I manage everything with the exception of North America, basically. So there are tons of markets to cover. And we cannot hire 200 affiliate managers.
We need to make it scalable, what we learn from one campaign, replicate in our campaigns, in the same geo or in our geo.
How do we do it?
Scalability Is The Key To Success
First we have to have some indicators. But based on previous results, they tell us if one campaign is likely to succeed or not.
Second, we need to have content angles, which need to be unique for each audience. Then we need to execute, then we need to assess the result, and then scale it up, going back to the step one. Meaning update the indicators based on the current results.
In terms of quality assessment, it’s all about the message. So it requires a lot of human involvement. And basically understand is the message in line with our brand.
So, yes, we are innovative. Yes, we are disruptive at the same time the influencer should be acting in respect of the audience and so on.
Quantitative assessment, once we understand that the way they communicate, it’s beneficial for both sides. Then it’s just about the math.
So basically, how much it’s gonna cost us?
We have formulas for the flat fee plus estimated commission. How much reach are likely to achieve based on what we see and what we forecast, based on experience we have in the market. And also how much engagement we get.
So we started with one formula, which initially was not that accurate. And then we kept customising it for each market.
Basically, when we run a campaign, overall, we can estimate quite accurately the potential outcome. But it’s still very hard to be correct on each and every influencer engagement.
It means we still make mistakes. But overall, now we know how to make campaigns successful.
It basically comes down to Excel. Like we have a formula.
So okay, if we wanna run, if a focus is on awareness, which may be good if you are entering a market, then you divide the flat price by basically, followers multiplied by reach.
We check with CPV.
If it’s the sales-oriented campaign, then adjust followers multiplied by reach rate, multiplied by click-through rate, multiplied by conversion rate, multiplied the average order value, minus the flat price we pay. The expected profit and then of course, from which this we still need to deduct the CPS component.
Example number three.
So for White Friday, with which EMEA region is the same as Black Friday but it’s just called this way.
We run an influencer campaign and basically, over one weekend, we made almost 20 million in reach with just one influencer.
If in the audience you have influencers, please come and see me after I finished the talk.
A suggestion for you is you need to do due diligence yourself to make sure you wanna partner with any brand. Because at the end, that affects your reputation as well.
If you are in an agency or affiliate network, first make sure that the influencer you engage are genuine and also, business- oriented.
So my friends, in marketing, it is not a charity. So at the end, the influencer needs to know that the relationship needs to work for both sides.
What it means? It means they need to commit only to what they can deliver and then do it.
We in the past, we had cases of sending out a product and then there was no posting as agreed or there were delays. And that within reason is acceptable. But for big events like Black Friday, Singles Day, Boxing Day, if someone does not post on time, the result of a campaign can be much much lower.
So it’s very important to have influencers who are business-minded. And again, you need to make it scalable.
Important Aspects Of The Business Relationship
What all the sides need to consider is influencers, the asset that influencers have is attention.
This attention is given to them via followers and people who interact with them. So the influencer needs to safeguard their followers by providing information which is accurate.
So if you are an influencer just don’t say positive things unless you really like a product. Otherwise, you will lose credibility.
You need to agree on legal requirements, especially when the fixed amount starts to be substantial. And when all this stuff are in place, then it makes easier to repeat the partnership over time.
Different Ways To Reach An Audience
There are different ways to reach an audience and each way, it’s unique. I’m not going to get into the details of this because I think you already heard it before.
Fourth example of a successful campaign. There was one manufacturer of skincare devices of, let’s say different or “lower” quality than ours and they wanted to enter one market with a big discount.
So what we did a few hours before they implemented this, we ran a campaign on an Italian Facebook group, where there is a lady who suggested skincare devices. And she gave a substantial discount, which made our price slightly higher than the one of a competitor.
Basically, in one day and a half, we sold 300 additional units just through one partnership, one Italian Facebook group.
So again, why did she succeed? Because she posts only what she believes in. Of course, she can make money at the top of that, but she’s selective. She’s not posting everything.
Her audience appreciates that and that’s why she gave us such a great result.
I’m gonna skip through a few, just based on what I think is more relevant right now.
To work consistently with the same influencers, which is very important because if we have to start engaging new influencers and just drop the old one, it will be a very ineffective way.
So we want to keep the influencer engaged and then engaging the audience regularly.
Doesn’t mean every week, but it means for the major campaigns, sometimes through the year, and so on.
How To Build Long-term Partnerships
I think the key is expectations.
Some influencers, they think their duty is to post the pictures of themselves with the product and then they can go out and party. That’s fine if that’s what you agreed with.
But if you agree on results, then at least start to outline those results. What does it mean for you if this campaign successful and then they can tell you like, okay it’s feasible or not.
You need to have short-term KPIs, which usually means reach. And you can have a medium-term KPIs, which is sales.
And again, always align interests.
In some markets, it’s mandatory to disclose any paid partnerships. So make sure your influencers are complying with requirements.
Because at the end of the day, the responsibility tends to end up on the brand, even it’s hard for a brand to really tell what happens in every jurisdiction.
At the same time, it makes business sense. If their followers understand that for them it’s a way to monetise the content they provide for free. So there is no reason to make a mystery about it.
Ways To Be Transparent
Ways to be transparent. They can put earning disclaimer, they can mention we received a free sample, and so on. That depends on each situation and each type of channel they use.
So hybrid influencer marketing, it’s a win-win partnership.
As a brand, we get the performance we need. And as an influencer, you basically may get free products and earnings.
Doing By Not Doing: Prepare Yourself To Be Lucky
Fifth example of success story is basically, I call it doing by not doing.
So what it means, so far, we saw many cases where we had a specific target and we laser focused on it. Sometimes, this approach works great and sometimes it doesn’t work.
What can you do on the side is building your presence on the market. So when something positive happens, you are positioned to benefit from it.
So in this case, in our team, achieved placement on a very popular Korean drama called The Beauty Inside. For two weeks in a row, the product was, which in this case was a UFO, we’ll see as part of a Korean dramas story.
And then Korean viewers of a drama started to communicate, search for FOREO, started to discuss it.
So this is something I couldn’t have predicted. I mean, I knew this was happening but to monetise it directly for affiliate marketing is a bit hard. Because of course, the drama itself is not gonna promote any affiliate link.
But the Korean landscape for our affiliate marketing already had some active affiliates. And so, they were positioned to bring us sales and to benefit from it.
So in this case doing by not doing. You’re still doing quite a lot in terms of preparation work. And then you are ready to catch the tide when your product, your brand, your vertical gets featured by a leading magazine, by a major TV show, and so on.
The FOREO Story
So to summarise how FOREO has been successful and able to sell this quantity of devices is basically, the customer, of course, always comes first.
So there is innovation in the devices. If we do something the same way someone else did it, then there is no point in doing it.
So if you are Johnson & Johnson, if you are like a major corporation, you can just take a product, which is undifferentiated, push it with marketing. You do it with 10 products, maybe 2 products are going to fly.
In our case, we start with products which give experiences, which are different from everything else.
As affiliate teams and as content teams, we value influencers and their work. So we respect the fact that they may say no to working with us. That’s fine. It’s better than working badly and when they work well with us, we are satisfied.
My affiliate teams are given very, very high and unusual goals.
So as I mentioned before, we use affiliate marketing. Not only for our own website, but also to push sales on retailers or marketplaces, which of course includes like Amazon Seller Central.
So if you are good at sending traffic to Amazon, please do approach me if you like.
We have both sales goals, which every affiliate team has but we have big hybrid reach goals to achieve.
Opportunities For You
And opportunities for you depending on your background. So here, there are plenty of very, very skillful storytellers and funnel builders.
The short story is that brands do not build funnels, usually.
We just build a website. There is a presentation of a product, there is add to cart and you check out. That’s it. That works for us. It works for our business model.
But you as an affiliate, if you are an affiliate, who knows how to build funnels, then you can have a much, much higher conversion rate that we ourselves can have by sending traffic straight to our product page.
Suggestions For You
What would I suggest you to do, if you are good with funnels, first is identify brands that work well with your existing audience.
Alternatively, identify some brands for which you can build an audience. Whether it is at a reasonable investment for yourself. Join the affiliate program.
Start to communicate with affiliate managers you are in touch with. Ask if they allow funnels. I think most of the brands are open to funnels. However, there is a big limitation in terms of medical claims.
For example, we have one device called Espada, which can be used to relieve, alleviate, or to get rid of acne. However, it cannot be marketed as the ultimate acne solution, get rid of acne 5 minutes.
So you need to understand that the funnels that you will build for a product only, which is different from a brand, which has a brand equity to protect, needs to be calibrated a bit.
“Yes the funnel is good.”
You create this funnel, you show it to your affiliate manager. If they allow, they’ll say, “Yes the funnel is good.”
Okay, start pumping traffic, collect the data you can collect. Collect email addresses, then you can use the same audience, resell our products. As long as you are transparent about what you do, I think that’s an excellent approach.
The only invitation I have is many, many skilled funnel builders are used to intangible industries like forex, eBooks or are used to credit card submission offers, where the costs for the merchant is very, very narrow.
So when you work with a brand, don’t ask for 50% rev share. Because I mean, that margin cannot be given to any affiliate.
You need to understand that the margin in tangible e-commerce, where the products are patented and are developed by the brand, the margins are different. But also the conversion rate is different.
Because what you’re selling, I mean, what we are selling cannot be sold by other people under our brand. We designed it, we own the patent.
So what happens to the conversion rate at the same time, the payout is lower.
IT Intensive Opportunity
Another invitation is if you are IT developer and you’re good with algorithms, please do come up with some smart, retargeting, remarketing, cart abandonment prevention technology.
Right now, I’m getting tons of offers from companies that they present the solution as groundbreaking. But in the end, it’s a script that probably 5-year-old guy can write just to launch a pop-up when someone closes a browser.
So some brands fall for it, okay good for you.
But if you can come up with something, which really uses the information you get from the affiliate programs in terms of data feed, in terms of customer behaviour, and you create something which is really artificial intelligence and not just the pop-up, you can become one of the biggest affiliates on a global scale.
There are challenges, there are legal requirements and so on, but really, if you invest, you will succeed.
Recipe For Success
Recipe for success. As an affiliate myself, avoid using a lot of growth hacking techniques.
They worked for myself. But as a company, you cannot really take shortcuts. Yes, you can take strategy and tactics to build up sales but you need to bring consistently.
So how FOREO does it is as I said, products are patented. The design is unique, the way we market them is unique.
We have celebrities to promote them, which makes easier for you as an affiliate to monetise your traffic there.
And we do our campaigns, for example, against cyber bullying against, sorry, to support skincare awareness, to support acceptance of how people are and so on.
These campaigns don’t necessarily bring sales but that’s a way to give back to society.
How I Do This
The way I do it myself, I have the pleasure to come and share what I learn to audiences like you. And I also write books about well-being.
My third one will be called Exstatica. It’s not on sale, so I’m not trying to sell it to you. But it’s about how to apply the principles of renaissance to business and success in personal life.
So what I would like to invite you to do, if you bump into me and you wanna share how you make things different, how you make a difference in the life of the people you reach for affiliate marketing with your products, please do.
I’m here only until today, 4 PM. Then I have to go to Hong Kong for another conference. But please, I look forward to hearing anything you have to say.
Just please, no CPI offers.
Just make sure you understand what I do and that’s probably good for everyone. Like research a person you want to speak with or at least ask what they do. And then find out how you can work together.
Thank you very much everyone and enjoy the rest of the conference.