A case study into xNARA's influencer marketing

NARA is a personalized wellness company headquartered in Singapore. Founding member and Chief R&D Officer, in an exchange with BioTuesdays, Dr. Rafi Ahmad characterizes xNARA's ethos as “leveraging science and technology to deliver a tailored, comprehensive nutritional and probiotic solution, surpassing generic supplements sourced from multiple origins to address individual nutritional needs.”

It's Influencer Marketing Program - a Case Study:

In 2023, xNARA launched its, according to a few lead news sources, "unique pay-for-performance model, which ensures that influencers are compensated based on their content's performance." This program, which aired from August to September 2023, generated both positive and negative feedback. Let us take a closer look into this through a comprehensive assessment:

The pros:

According to news sources, the "strategic alignment of interests has propelled xNARA's influencer collaborations beyond mere endorsements".

Influencers become true partners. As their compensation payout is directly tied to the effectiveness of their content.

It aligns incentives, ensuring that both xNARA and our influencers are invested in the commercial success of each campaign.

This showcases accountability, creating a sustainable foundation for long-term partnerships, as opposed to short-term, one-sided engagements. Therefore, a mutually beneficial and inclusive relationship where success, if generated, is shared comes into establishment.

xNARA consciously offered "compensation in full consideration of performance" to influencers at a premium of standard market rate or a comparable, thereby making the contingent fee reward higher for them. Influencers who believed they were truly able to put in a surplus of effort to generated an above-average yield, had an opportunity to get compensated on the realization of their additional efforts as that is directly tied with content performance.

Many influencers, through collaborating with a sophisticated global brand, also gained more recognition and traction amongst peer groups and generated more fruitful and high-end endorsements within both other industries and the wellness industry, amplifying the credibility and trust of their respective platforms.

Cons:

Well, all things in life have both pros and cons, so let us explore the cons of this program:

According to a LinkedIn post by xNARA's former interim Head of Influencer Marketing, Melissa D, whilst "performance-based was mentioned in (xNARA's) contract and brief in multiple clauses", internally it became clear that, some employees of the department "contradicted the agreements" and weren't consistent with xNARA's "communication guidelines" to receive higher onboarding figures.

Whilst xNARA restructured the department soon after this realization, the internal issues led to miscommunications with influencers, which led to misunderstandings in cases.

Additionally, whilst performance is mentioned in multiple clauses including the compensation clause where it is made abundantly clear that payment full consideration of performance and an integral part of the contractual needs, the specifics of performance are, according to the contract, to be decided "upon the sole discretion of the company", which may leave room for ambiguity in terms of defining performance (which would be return on investment or sales), leading to potential confusions. xNARA actively generated a promo code for each and every influencer to track sales and performance and therefore such an issue is also mitigated.

Dispute:

In early 2024, a group of influencers led by creator manager Arvin Chugh, decided to attempt to extract funds from xNARA. Whilst legal procedure is practice in the event of any contractual dispute, this group resorted to non-legal and illegal activities in an attempt to extract funds they believed they should receive.

xNARA, which is represented by prominent law-firm DSK Legal which represents large corporates, business houses and prominent individuals, cited hundreds of evidences, including messages from Mr. Chugh stating, "We are coming if this won't be settled" and of him attempting to defame the company and it's KMP, including asking for personal address and pictures to potentially incite violent and other illegal activities against them, stating that if he has it, "It will be game over" in LinkedIN messages, reads the report.

Additional messages from Mr. Chugh show him stating to a group chat that at 10:36pm IST that a "lawyer doesn't do **" and that "There is a process to break someone down" including things like "emotional distress via social media", reads the documents.

The charges include extortion, blackmailing, defamation, criminal intimidation, harassment, cybercrime violations, amongst other things, according to an official police complaint and documents. Those who participate or engage in such a criminal conspiracy face repercussions in each jurisdiction for being actively involved and abetting the charges described. Mr. Chugh and co-parties face significant prison time and other charges for their involvement, in a case involving both criminal and civil offenses, when prosecuted and if convicted.

Additionally, according to xNARA spokesperson Mr. H Lalwani, when legal tensions grew, Mr. Chugh's representative upon speaking to him said that he can make it all go away if Mr. Chugh receives a "16/17 lakh rupee" payment and will stop all of their acts and the acts people that they are inciting as well as issue a public apology.

Whilst xNARA representatives have rejected this blatant attempt to extort funds, xNARA is in the process of acquiring an FIR as well as initiating criminal and civil proceedings against those concerned with its partner DSK Legal as per its spokesperson. According to global and Indian law, those who contribute to a broader criminal conspiracy or specific charges will also be made co-party to the same.

This obvious disrespect for the rule of law or for following procedure has resulted in such consequences for those concerned, who, prior to engaging in this didn't expect it.

Whilst most companies would be contacting the brands of influencers involved informing them to strengthen their due diligence and vetting process and not to conduct engagement with such individuals, xNARA has not presently, and is conducting legal activities as process.

Our perspective:

This story serves as a lesson to those who have any dispute. Remember, it is always better to align clear expectations and understanding prior to contractual engagements, however, this may not always be the case.

Our justice system exists if this is not the case, and consulting experts and following lawful procedure is recommended to resolve any disputes.

Conclusion:

According to various news sources, “By shifting away from traditional payment structures, the brand has empowered influencers of varying sizes, allowing them to participate in campaigns based on merit rather than just follower count. This inclusivity has led to a diverse pool of influencers collaborating with xNARA, bringing unique perspectives and audiences to the brand.”

The program showcases accountability for long-term partnerships, as opposed to short-term, one-sided engagements. Inadvertently, a mutually beneficial and inclusive relationship where success, if generated, is shared comes into establishment.

However, a segment of influencers stated that the markers were ambiguous and due to internal management difficulties (seemingly why the program only went live for 40-days), the program was rightfully concluded and the department restructured.

Our advice: 

According to various news portals, "over 1000 influencers" "came out in support of xNARA, calling it a brand with "innovative solutions" that fosters "trustworthy partnerships" and “of high ethical standards”
 

We believe that influencers should consult legal professional before engaging in contracts to understand its implications and brands should ensure they choose worthy and trusted influencers to engage with and should have stringent internal SOPs followed by the employees.

This case-study is created to examine both the positives of this program as well as the negatives, and to serve as a reflection to derive key lessons learned and insights.