Through the conformity experiments of 1955, Polish-American psychologist Solomon Asch distilled the essence of what has become a buzzword in marketing today: Social proofing.

The participants of his study were asked to judge the similarities between a target line and a set of objectively different lines.

The catch? Among the group were Solomon’s accomplices, who, in over 36% of these trial instances, led the naive participants to conform to a blatantly false judgment of the length of these lines. Solomon was striking at the heart of normative social influence: the influence of others that leads people to conform in order to be accepted and liked by them.

Normative social influence is why you are more likely to sign up for a product when you see a testimonial from a CXO on the landing page, and why 91% of shoppers look for reviews of a product before adding to cart.

“The dominant social force that drives our thinking and our actions is the unconscious search and need for social proof,” writes award-winning author Dragos Bratasanu. That quote could be totally made up (it’s not) but Solomon’s research suggests that you now take this article at least 36% more seriously.

Normative social influence (specifically social proofing) is also at the core of how an e-Commerce marketing platform founded by Tomer Tagrin and Omri Cohen has grown to become a staple for the world’s fastest-growing stores and brands.

Meet Yotpo.

😤 A 1-star experience

Betrayal, shame, and a quest for justice that turns into a greater than the self cause. No, a new anime didn’t drop - this is a (slightly 😬) dramatized recollection of why Tomer Tagrin and Omri Cohen started Yotpo. The duo was wronged into buying their friend the “crappiest camera that they could have bought” online, by a fake reviewer and decided that no one else would have to bear the pain and shame again.

After chatting with several amazon reviewers, and an attempt to crawl and rank ALL the reviews available online, our founders realized that the way to go was to generate reviews themselves. Failing miserably in reaching out to relevant merchants who would use their review-gen tool, our founders turned towards a hot and promising Canadian e-commerce company that had opened its doors to plugin partners via APIs (wonder who this is? 🤔).

After a disheartening but short dry-spell, Yotpo’s review widget started firing when Shopify store Loop loft’s founder Ryan attached the review widget in a post-purchase feedback mail. Tomar and Omri acted quickly on this Eureka moment and created a review collection tool that would let the user review their purchase with just an email reply.

This review tool soon became a review platform and is today a full-stack solution for the 4 pillars of e-commerce marketing -

1. Reviews and User Generated Content (UGC) marketing,
2. SMS automation,
3. Loyalty and referrals,
4. and Visual UGC.

“From one UI, a company can collect, moderate, and publish reviews, manage Q&A, use customer photos and social posts for visual marketing, create and publish UGC Facebook Ads, and track the performance (including sales influence) of every UGC asset.” - Tomer Tagrin

Yotpo is now a $1.4B Flamingo raising a whopping $436M from marquee investors like Bessemer Venture Partners, Tiger Global, Claltech, clocking north of $100M in ARR from 150K+ customers and reaching headcounts of 800+ across 4 offices! 🤯

Why Flamingo? 🦩

“We’re not building a unicorn,” Tagrin said. “We’re building a flamingo, a real animal, to provide real value to customers, employees and shareholders.”

Also, how did they do it? - Jump right in 👇🏻

♟"You know what? Yes, we might have some enterprise, but Yotpo is an SMB company."

— probably heard during a heated conversation between Yotpo’s founders and a swarm of investors who insisted that the company focus on enterprise clients.

Yotpo struck true to this strategy and built for a long tail of SMB customers.

The result?

1. a product that was easy to use and integrate
2. a strong presence in the Shopify ecosystem (riding the Tobi wave) that led to discovery and acquisition
3. and… the eventual upmarket journey of adding enterprise brands who were also now looking for easy turnkey solutions

🤑 Freemium evolution

A key aspect of capturing SMB demand was to provide quick value outside of the paywall. In the early days, Yotpo had a free plan for customers who had <1M page views per month. Today, there is a free version that is open to all and paid tiers that are more feature-rich.

Pricing plan for Yotpo’s Reviews Product

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👂🏻 Listening to Merchant feedback

Yotpo came under fire in 2016 for poor service, especially amongst SMB customers. This sparked a re-org that brought about new processes and ramped hiring in the support verticals. Response times and resolution times were brought down, new and transparent premium pricing plans were brought about and the entire organization rallied towards “Becoming Awesome to their Customers”. ❤️

Easy and frictionless access, an intuitive and easy-to-use product, and a renewed and gold standard focus on client service grew Yotpo into the default Shopify solution for Reviews and UGC… but how big is that market?

🥅 Moving the goalposts

In 2018, Yotpo revisited this question and came to a conclusion that the review platform that they were, was good enough to build a $50M ARR business but not a $100M ARR one.

“Every brand is trying to win over consumer attention, so they're trying to build a great consumer experience. They can't because they need to connect their loyalty platform to the reviews, their visual marketing suite to their loyalty platforms, and the referrals to their SMS.” - Tomer

What followed was product strategy at its best as Yotpo evaluated and expanded its offerings to connect the different tenets of e-commerce marketing in one place.

🧰 Product development

The product team rolled up its sleeves in preparation for a grand rebuild that added platform features to Yotpo. The Visual UGC product was built internally and the entire data and backend infrastructure was rehauled to accommodate the multi-product way of life

💰 Acquisitions

When the build vs buy scale tipped to buy citing development complexities, Yotpo wrote checks to acquire features. SMSbump brought SMS-centric marketing automation while swell rewards opened up Loyalty and incentive-driven marketing.

"We were the first company to acquire a company in the Shopify ecosystem and that was a big deal.”

🤝 Integrations

Yotpo aggressively built out integrations with other e-commerce enablers, becoming the default marketing layer across stacks.

👨🏻‍🔬x💰 The GTM machinery

While visionary and timely product strategy set the course, the $100M+ in ARR can be attributed to the stellar GTM machinery that Yotpo has built out. While Marketing (led by Omer Cnaani, SVP Marketing) built out brand presence and organic pipelines (including Content and Product Marketing), the Growth (reporting into Marketing) and Sales functions work revenue.

📈 Growth:

Yotpo’s VP of Growth Yoav Aziz describes his job as a combination of pipeline creation via paid / inbound channels and that owning the entire self-serve journey and ARR targets in true PLG Fashion 🤩. The main KPIs for the team include:

1. Paid acquisition revenues (Channel experimentation)
2. Product revenues (Self-serve conversions)
3. and Website revenues

“we (Growth) took it to the more analytical parts of the marketing. Almost every analytical aspect besides the marketing operations and analytics and stuff is sitting in our team and the rest of marketing are usually doing more the creative stuff - they are more coming in with the ideas, content, brand PR events, et cetera.” - Yoav Aziz, VP Growth at Yotpo

Improving product adoption through onboarding flows, a complete website rehaul that improved conversions by 93%, and a Drift chatbot that contributes to 30% of website conversions are examples of initiatives through which the Growth team delivers on their KPIs.

Shopify App store SEO being a function of Churn and Growth rate of existing users also becomes an extended responsibility of the Growth team - in partnership with Product.

🛠 Growth Tools

Here are some of the tools that the Growth team frequents -

1. Analytics - Mixpanel, Amplitude, Hotjar, Fullstory
2. Conversions - Drift, VMO
3. Design - Photoshop, Illustrator, After Effects
4. Prototyping - Balsamiq, InVision, Sketch
5. Project Management - Smartsheet, Trello

💰 Enterprise and Partnerships:

All conversion responsibilities that required human assistance (big enterprises, crossing red tape, etc.) were handled by the sales and revenue team.

👨🏻‍💼 Sales:

The sales team is divided into SMB, Mid-Market, and Enterprise work to convert respective pipeline that is created by Growth/Marketing and also engages in Outbound ABM. Outbound ABM lead lists include existing customers of the Shopify CMS and other partner Cos.

Sales functions include SDRs (lead qualification), Account Executives (Sales engagement), Account Managers (Customer Success), Sales Engineers (Onboarding and Solutions architecture), and a dedicated Revenue Operations team.

🤝 Partnerships:

In a norm established by Shopify, a partner ecosystem of agencies and resellers is a significant GTM channel for Yopto. This channel contributes up to 35% of Yopto’s business and is globally distributed.

⏩ What’s next

Having hit their $100M ARR target before the last fundraising announcement in May 2021, the goalpost has moved even further for Yotpo. Here are some key areas that we are most excited about for Yotpo -

💯 The strategic partnership of the century

Along with a cap table position, Shopify strengthened its partnership with Yotpo and together they are planning to build smart tools that focus on customer experience.

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🎁 The Yotpo Bundle:

The best part about a multi-product company is the synergies that one can build between use cases and the possibilities that each permutation brings. Yotpo hopes to mix and match features to run use cases like:

1. Review collection through SMSes (Review x SMS)
2. Re-engage customers with SMS and personalized loyalty incentives (SMS X Loyalty)

amongst others to offer a more holistic marketing experience to their merchants.

🚀 Growth:

With a gold mine of freemium users, we expect more focus on in-product conversions and sales assist mechanics to convert product qualified leads.

🤝 Partnerships:

The partnerships and integrations list is expected to get longer as Yotpo explores more win-win scenarios with both existing and new partners.

One thing is for sure, this Flamingo is flying to the moon and we are rooting for them from the sidelines 🚀🙌🏻

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