How FOREO Sold 1 Product Every 3 Seconds Globally | Frank Ravanelli, AWasia 2018

How FOREO Sold 1 Product Every 3 Seconds Globally | Frank Ravanelli, AWasia 2018


Good morning everyone. Thanks for being
here with me to discover how at FOREO, we sold one device every three seconds. We start from my own short story, FOREO’s pillars of success.
Then I will share seven 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. So why I’m here.
I’ve been on both sides of the fence. I’ve been a affiliate myself.
I’ve been a superaffiliate. Most of the SEO techniques for forex, for nutra, for eGaming. You name them, probably I’ve use 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 five 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 and this year as
of 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 team work.
You may have seen FOREO on a Star Trek Discovery. In that case, a toothbrush. On
The Ellen Show. Celebrities mentioned it in interviews. 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. So they work from home. They work from their home country, wherever
is closer to the affiliates. What 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.
So 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 a 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. 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 three 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 we partnered with a local retailer. So we were
not promoting sales on FOREO.com but we were 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, 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 ecommerce, 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 at the end, most of the fees, which are present in
one network are also present in the other network, and 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. So 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. So we pay a flat fee and a CPS or of course, CPS only, but we never pay
flats only. So it may be a bit different from the previous presentation. So 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. Why? 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. So 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.
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. So we need to make it scalable, what we
learn from one campaign, replicate in our campaigns, in the same geo or in our geo.
So how do we do it? 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. So 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? So 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 and 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. 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. 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 and 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. 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. 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. 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. So 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. 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. So 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 ten products, maybe two 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 and we have both sales goals, which every affiliate
team has but we have big hybrid reach goals to achieve 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. So 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 five 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. 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 a
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. So you need to
understand that the margin in tangible ecommerce, 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. 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 five-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. 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. 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, 4pm, 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. Thank you.

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