Daniel Wellington, MVMT, Snow Teeth Whitening, Tuft and Needle, Fashion Nova, and Gym Shark are all brands that went from idea to mass market in what seems like no time. What do they all have in common? They attribute a large portion of their success to their ability to inspire influencers to love and share their brand's message.
People all over the internet will tell you how terrible their influencer collabs have been in the past and that the only way anyone should work with influencers is if it's performance based. But, what about all of the companies above who have acquired huge market share or exited for hundreds of millions of dollars by doing the exact opposite? Whether or not you believe influencer marketing is worth your time, results don't lie and I would like to encourage you to consider a few things before making up your mind.
If your background is in direct response marketing, everything you are about to read is going to be against what you're used to. That's exactly why influencer marketing is best managed by a brand director rather than someone in the thick of analytics all day. You wouldn't task your accountant with making your logo, would you?
So, Is Influencer Marketing Profitable?
Let’s say you have a new bath bomb product that all of your customers love. You reach out to 100 influencers about doing a paid post and 15 of them reply. You set up deals with all 15 influencers to pay them $250 each in exchange for a post on their Instagram feed and story with a link in their bio.
Influencer Spend: $3,750
Price of Product: $250
Total Campaign Cost: $4,000
In order for your $4k investment to be profitable, you need to make it past some pretty specific hurdles.
- Influencers must understand why your product matters to their audience.
- All of the influencers need to use the right links and CTA in the captions.
- The content needs to communicate the value add linked to YOUR brand (there are a lot of bath bombs out there).
- The influencers must have communicated their AUTHENTIC engagement and not be boosting all of their posts with engagement groups.
- You need to be able to recoup lost investment if an influencer decides to skip town on you.
- You need to retain the rights to the assets for use later on.
- You need to be able to all of this efficiently and at scale.
You can see that there are a lot of moving parts. Some of them are within your control. Others are left up to the influencer gods. But for the sake of this example, let's say it goes perfectly.
All 15 posts go up on time and exactly according to the plan.
If all of the influencers combined drive 8,000 clicks ($0.50 CPC) and your conversion rate is 3% with an AOV of $35, you will have generated $8,400 in sales. This should put you well above the threshold of being profitable after considering COGS.
Conversely, let's say you decide to shoot from the hip and a few issues pop up along the way.
Instead of 8,000 clicks, you get 4,000 and instead of 3% conversion rate you get 1.5% since the audience is cold and 5 of the influencers are using engagement groups that fooled you into thinking they’re a lot more popular than they really are. Now you've generated $2,100 in sales from $4k in spend. Not good.
You Need a REAL Influencer Program
Is it the influencers fault that they don't know the first thing about your brand or how to make an ad that converts? No. Influencers are influencers because they don't do that. Brands need to take the lead in showing them how to make the best use of their content and communicate the message they want.
Picture this, someone reaches out to you through Facebook and says "Hey, I have this product that does a super special thing and I would love for you to give me your address so I can send it to you. After that, I want you to play with it, articulate your thoughts on it, then make a video and share it with all of the people who you've spent the last 2 years sharing your life with and built your personality around. I'm only going to give you $50 and a promo code because your page is pretty low quality compared to the other 5 million pretty faces online. I forgot to mention, even if you do all of this, I still expect your followers to love my product and buy at least 3 of them within the first 24 hours of your post because that's how we do business and you should be grateful for the $50 we are offering you because social media is just a hobby anyway."
Sound familiar? This is EXACTLY what influencers feel like when you send them a message with demands for what you expect of them.
But, you’re a problem solver and you know that if other brands can do it, so can you!
Here's what you need to do
The first thing brands should do is develop a real influencer program. This is the foundation on which you will launch your brand’s values into the world using the voices of other people. You must inspire people to love your brand.
A good influencer program will do a lot of things. But most importantly, it will allow you to win the hearts of the audience. To do this, the influencer comes first.
A Good Influencer Program Includes:
- Influencer brand strategies that outline why you think they are the perfect influencer for your brand. Make it about what they will get, not what your brand is after.
- A brand story that aligns with your overall customer facing message.
- Areas you have leverage to negotiate when a price is a little too high.
- Influencer contracts with key sections to maximize what you walk away with after the post.
- Influencer briefs so influencers have a guide for making the content.
- A large pool of influencers that can be drawn from and cycled through.
- A way to automate influencer outreach and management.
- Relationship building processes on autopilot.
In addition to these things, you might also consider using custom landing pages to send influencers to that makes it easy for them to submit information.
Influencer marketing is HOT right now. Everyone wants to do it and few are taking the time to build programs the right way. This leads to lots of false starts and information spreading around that it's not worth the time. Let me put all of that to rest. IT IS WORTH YOUR TIME.
Look around at the brands who are taking IM seriously and you will see they are outselling their competition tenfold.
I’m a marketer, a strategist, and a visionary.
I help brands maximize the value of working with influencers by building successful influencer programs.
I’d love to help do the same for your brand.
Or, you can read some of my other articles on here or Medium where I explain how to do it yourself.
Next Steps...
Click here to see how I can build or review an influencer program for your brand.
Click here for more tactics you can use while working with influencers.
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