A startup called Mavely that has raised $1 million says it can help DTC brands get new customers at half the price of Facebook and Instagram — and Allbirds, Brooklinen and M.Gemi are already on board

Screen Shot 2019 08 20 at 4.37.33 PM

  • A startup called Mavely thinks it can help DTC brands address
    rising customer acquisition costs (CAC) on channels like Facebook
    while helping them grow by word-of-mouth.
  • Mavely’s pitch is that people can shop and earn commissions by
    sharing products with their communities on its app, while DTC
    brands can reach new customers.
  • Mavely also claims it’s improving on the multilevel marketing
    company model, which has come under criticism.
  • But its community is tiny compared to Facebook, and has to
    compete for DTC brands’ attention with established platforms like

    Snapchat
    ,
    Pinterest
    ,
    TV
    , and others like
    Wildlink
    and
    Verishop
    .

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As the direct-to-consumer economy matures, the very social
channels that DTC brands used to grow are getting saturated
and expensive.

One startup thinks it can help DTC brands address rising
customer acquisition costs (CAC) while helping them expand their
communities through word-of-mouth. Mavely is a shopping app where
DTC brands can sell their products and people can shop and earn
commissions by sharing products they like with their friends and
families.

“There’s only a couple of channels to acquire customers right
now, and the competition on those channels is accelerating, which
is a big problem for DTC brands because the costs keep rising while
the lifetime value of user stays the same,” said Evan Wray,
cofounder of Mavely.

Mavely says it helps DTC brands recruit new customers in a
community-focused environment 

The startup, which launches today, has raised $1 million in
funding from Tim Connors’ VC firm PivotNorth Capital, and has more
than 100 DTC brands including Allbirds, BarkBox, Brooklinen and
M.Gemi on board. Wray and his cofounder Sean O’Brien previously
built and sold emoji platform Swyft Media, and Wray is also a
partner at VC firm Trail Mix Ventures.

The idea is to give DTC brands a way to target new audiences,
specifically suburban women aged 35-50. Users earn 5% back when
they shop for themselves and up to 10% on friends and families’
purchases, Wray said. 

Mavely is trying to put a new spin on the multilevel marketing
model, where companies recruit people to sell for them but
which has gotten a bad rap for leading a lot of people to actually
lose money.
Wray said Mavely has no cost to join, no inventory
requirements that consumers must maintain, and no minimum follower
count that users need to recommend products.

The app is already profitable on a per-user basis, said Wray. He
said Mavely gets an undisclosed commission through an affiliate fee
from brands whenever a purchase is initiated on its platform, a
portion of which goes to the users. In this way, the cost of
getting customers is a fraction of what it costs through Instagram
or Facebook, claimed Wray, and brands control the checkout
experience.

“It costs about half or a third of the cost of a Facebook or
Instagram ad,” said Wray. “We are already seeing up to a 12% buy
conversion rate on products, which obliterates the industry
average. The mobile average is less than 2%.”

DTC brands are seeking new channels — but Mavely has
plenty of competition 

Ad prices on YouTube and Instagram have steadily increased,
according to a recent UBS survey of 40 advertising executives who
spend more than $90 billion on advertising. But as DTC brands look
for alternatives, Mavely is hardly the only option available to
them.

They are exploring everything from
Snapchat
,
Pinterest
, and
TV
to physical retail, hoping to get better bang for their
buck. They also have platforms like
Wildlink
, a platform that rewards consumers for referrals
across social and digital channels; and
Verishop,
a DTC shopping platform that’s trying to take on
Amazon.

Read More:
Direct-to-consumer brands that built their businesses without
traditional advertising are now embracing it in key ways to fuel
growth

Still, Mavely is a draw for some DTC brands. Brooklinen began
beta-testing the platform in March as Instagram and Facebook got
more expensive, said Katherine O’Keefe, the brand’s director of
partnerships, PR and social. Its customer acquisition cost on
Mavely has been less than half that of other channels, she
said.

“Mavely isn’t prone to the constant price fluctuations the way
other digital marketing channels are, and also allows our consumers
to connect more directly with each other,” she said. “Having
consumers who advocate for your brand is one of the most valuable
things you can ask for as a marketer.”

M.Gemi has been using the app to encourage users to expand its
community by hosting in-person meet-ups. 

“It’s the localization of social if you will,” said Heather
Kaminetsky, chief brand officer at M.Gemi. “It creates more of a
flywheel effect. It’s like social on steroids.”

A question is how quickly Mavely will be able to scale, said
Brooklinen’s O’Keefe. The app counts about 10,000 users and aims to
reach 30,000 by the end of the year, said Wray, but that’s still a
drop compared to Facebook and YouTube’s billions of users each.

https://www.wolfgangdigital.com/kpi-2019/


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Source: FS – All Tech News
A startup called Mavely that has raised million says it can help DTC brands get new customers at half the price of Facebook and Instagram — and Allbirds, Brooklinen and M.Gemi are already on board