Drop Technologies Inc.: Understanding the Influencer Marketing Channel
(6 pages of text)
Drop Technologies Inc. was a major success in the Toronto, Ontario, Canada technology community. Having raised its initial pre-seed funding with only a slide deck, it grew to become a popular loyalty mobile application across North America. In 2017, the company was featured in LinkedIn’s top 25 start-ups in Canada, and it closed CA$58 million in a series B funding round. In 2018, the marketing manager had to decide which marketing channel was most effective based on the goals of the company. Traditionally, Drop Technologies Inc. used paid social advertising and referrals to generate user growth. However, the rise of influencer marketing was on the marketing manager’s radar, who had previously tested this channel, but had yet to decide whether or not to allocate more of the marketing budget to it. While this channel had many potential benefits, it was still a new concept and held many potential risks.
This case can be used in undergraduate-level courses on marketing, entrepreneurship, or strategy. After working through the case and assignment questions, students will be able to
- become familiar with the loyalty industry;
- investigate growth options for business-to-consumer companies and develop evaluation criteria for the success of a marketing campaign;
- discuss the pros and cons of three types of marketing channels;
- understand what influencer marketing is, why it is successful, and the associated risks;
- learn about unit economics as well as customer acquisition costs and customer lifetime value calculations; and
- make a decision that balances growth and profit.
Information, Media & Telecommunications
Canada, Small, 2018
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