Crypto Influencers Are Following the Beauty Playbook – Even if They Don’t Know It

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Please consider using a different web browser for better experience. Please enable JavaScript in your browser for a better site experience. Crypto Influencers Are Following the Beauty Playbook – Even if They Don’t Know It Jun 1, 2020 at 10:00 UTC Michelle Phan (Credit: Mark Sacro for CoinDesk) Leigh Cuen Crypto Influencers Are Following the Beauty Playbook – Even if They Don’t Know It Beauty mogul Michelle Phan isn’t the only woman to notice similarities between makeup startups and crypto communities. Both are dominated by influencer marketing with products sold through direct-to-consumer (DTC) models and aggregated retail platforms like Amazon, Etsy or Shopify. In emerging markets without direct access to Amazon, Lebanese bitcoiner Michel Haber said grassroots traders often fill the role of educating clients and helping them procure their first wallets. Social media accounts and chat groups become ad hoc retail networks. Read more: Michelle Phan: The Beauty of Bitcoin When it comes to grassroots distribution strategies, few mainstream industries offer a better precedent for the nascent cryptocurrency space than small beauty businesses, according to decentralized finance (DeFi) user and skincare aficionado María Paula Fernandez. In both startup sectors, users are encouraged to do their own research rather than trust traditional tastemakers like magazines. “I think DeFi and indie/new beauty [entrepreneurs] are very similar in this regard … bringing power to the people, generating opportunities,” she said. “There is no harm in learning about what’s in your beauty products. … It benefited consumers as well, as some of them can become influencers and broadcast their knowledge for compensation.” Likewise, Fernandez said, she now looks for beauty products and crypto tools in similar ways. She builds up her own expertise, learning together with loved ones who work in the skincare industry, while also following influencers with professional experience in the field. So far, in the crypto industry, hardware wallet sellers predominantly rely on digital word-of-mouth. Much like the beauty marketing strategies on YouTube, Instagram and TikTok, this includes sending products to crypto influencers to review and make instructional guides. This typically matures into a referral marketing strategy that leverages these same fan groups. For example, Iva Fiserova, head of communications at the Trezor wallet-maker SatoshiLabs, said the startup collaborates with social media influencers on “affiliate marketing activities” rather than paying influencers to advertise. A few exchanges, like Binance and Gemini, have already proved successful with the referral model, which has worked for decades for multilevel marketing companies like Avon and Mary Kay cosmetics. As such, the Instagram micro-influencer Chjango Unchained , who works at Cosmos developer Tendermint during the day, said she’s been earning pocket money through the Gemini referral link in her Instagram bio for a few months. If her fans use that link to sign up and buy more than $100 in crypto, she receives $10 in bitcoin. “I just see people on Instagram doing it,” she said of promoting brands through her Instagram , where she started featuring professional portraits with brand tags in 2019. “I wanted people who ask me about crypto to use Gemini instead of Coinbase because Coinbase’s fees are insane.” It remains to be seen how these marketing strategies will scale during the coronavirus recession. YouTube giveaways “We sometimes get in touch with [users] to help them engage their followers by doing giveaways and joining campaigns,” Fiserova said of SatoshiLabs’ influencer strategy. Unlike beauty brands, which look for experienced influencers with established followings, crypto brands are more likely to help users become influencers. Fiserova said her company has sold hundreds of thousands of Trezor wallets this way, working with “the community” to create a brand that users love so much the hardware seller “does not need to pay for advertising.” “We have seen a growing demand for our products in the past three months,” Fiserova said. “There were some shipment issues in some markets, which we managed to resolve, so our customers would get their devices on time.” Rodolfo Novak, co-founder of the hardware seller Coinkite, said he’s also seen an uptick in demand since the coronavirus crisis began. “Our sales are increasing week by week,” Novak said, declining to specify how many devices other than to say it is now comparable to the French wallet startup Ledger, which sold more than 1.8 million wallets to date, according to a Ledger spokesperson. Novak added his company sent more than 50 hardware products to YouTube reviewers over the past three years. In terms of community, the company’s Telegram group has roughly 773 members. This is their primary marketing strategy. “We find our users help other users,” Novak said. “If we added the cost of education [marketing] that would make ...