Zuberance turns word-of-mouth into $8M of new funding

Zuberance, a company that helps businesses energize their fans and turn them into a volunteer salesforce, has raised $8 million in a second round of funding.

Founder and chief executive Rob Fuggetta said the company’s goal is to become the tool every marketer uses to manage word-of-mouth campaigns. With Zuberance, a business can reach out to existing fans (who can be identified in a number of ways, such as an existing email list) and encourage them to promote the business, say by posting online reviews or by sharing promotional offers on social networking sites. Companies can then track those campaigns using Zuberance’s analytics tools.

These efforts are paying off in concrete ways, Fuggetta said. For example, the restaurant chain Chili’s identified 500,000 brand advocates in eight months, and their efforts led to $1.6 million in new revenue. And fitness company Club One spent $20,000 on a test program with Zuberance and saw a $180,000 increase in revenue, Fuggetta said.

Right now, Zuberance works with brands directly, but one of its goals with the new funding is to reach out to public relations and marketing agencies, who can then use Zuberance as a tool for their clients. Eventually, Fuggetta said, 80 percent of the company’s business should come from agencies, rather than from brands.

Canaan Partners led the new round. Existing investors Emergence Capital Partners and Correlation Ventures also participated. Zuberance raised its $4 million first round two years ago.

I should probably mention that I’ll be moderating a panel in San Francisco tonight that was organized by Zuberance — it’s about turning word-of-mouth into sales. Just to be clear, Zuberance isn’t compensating me to moderate, except with glorious, glorious fame.