How to Win Influencers and Friend People: Pursway Raises $6M, Arrives in Boston

2/9/10Follow @wroush

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offer you a free flight or some other major compensation the moment you disembark, in hopes of blunting the viral effect of your wrath on your followers.

In the Internet age, so many people are unresponsive to traditional advertising messages carried by TV, radio, newspapers, and billboards that reaching them through an influencer is sometimes a marketer’s only option, Pfeffer says. “What our clients are realizing is that they have basically lost control,” he says. “These tribes of customers are in control, and they have appointed leaders to speak for them.”

Influencing the influencers, of course, is a science unto itself. Pharmaceutical companies are notorious for their fine art of courting “key opinion leader” physicians with wining, dining, and consulting fees—in hopes that these star physicians will say something nice in front of a bunch of their peers at a medical education symposium. Pfeffer says opinion leaders in the consumer world can’t necessarily be won over with free products—and clumsy marketing efforts can backfire horribly, given that influencers are so likely to blab to their friends about whatever offends or pleases them. So aside from its data-mining technology, which is available in Software-as-a-Service form, the company consults with its customers on the best ways to manage and direct influencers’ viral effect.

It’s a good time to be selling such services, says Shaul, because consumer-facing companies such as mobile network operators are obsessed with retaining customers. “The number one question for everyone in a saturated market is how do I reduce churn,” Shaul says. “We provide [clients] with the churn influencers—the people who influence the decisions other people make about whether to keep using their Capital One card or switch to American Express. We show them the enormous wave that starts when an influencer decides that he’s leaving. Sometimes when these people leave they will take four or five additional members with them.” In fact, Shaul claims that 50 percent of all churn can be traced to the actions of influencers.

Casinos such as Foxwoods are the masters of understanding churn, Shaul says, but even they need help figuring out what to do about it. “They can see when you’re reducing your spend and visiting less and they know exactly when to communicate to you and what level of bonus or discounts to offer to get you back,” says Shaul. “But say they do all that and a specific influencer still leaves. That’s where we come in. Can you stop the viral effect of his leaving? Do you know where this person’s sphere of influence is? And if you do, maybe you can’t win back all of them, but if you win back the ones that will bring an additional five friends with them, that will pay off.”

If nothing else, Pursway’s technology lends a fascinating new meaning to the term “customer relationship management.” Pfeffer says the Battery Ventures investment will allow the company to expand its own marketing operations and win more U.S.-based customers. (The startup picked Boston, he says, because of its talented workforce, and because most of the company’s existing U.S. customers are on the East Coast.)

Pursway’s ultimate goal isn’t necessarily to help clients cut their marketing spending, but to help them make better predictions about the effects of that spending, Pfeffer says. “Peter Drucker said you can’t manage what you can’t measure,” he says. “Now, for the first time, you can measure advocacy and what turns it on and off.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://blog.ramakrishnan.com Rama Ramakrishnan

    Fascinating concept!

    In the bricks-and-mortar world, detecting and building the “social graph” is very challenging since there are no convenient Facebook and Twitter clickstreams and weblogs to analyze.

    Applying smart algorithms (based on time-and-location proximity, it appears) to build the social graph makes sense. The resulting data is very valuable and can be used for a number of things, including, of course, managing customer attrition.

    One caveat: with large data volumes, connections between strangers may appear just by chance and the technology needs sound logic to filter these out.

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