Are you tired of getting the same old lackluster results for your marketing strategy? If so, it’s time to come out of your shell and experiment with fresh ideas, such as influencer marketing, that can boost your marketing ROI and bottom line.
What is influencer marketing?
Influencer marketing is a type of word-of-mouth marketing that focuses on using key leaders to drive your brand’s message to the larger market. Rather than marketing directly to a large group of consumers, you instead inspire / hire / pay influencers to get out the word for you.
This kind of marketing continues to grow in popularity with each passing day, and there is one primary reason for this: it works.
Before you can take full advantage of influencer marketing, it’s important to understand how and why it works. Here are several statistics associated with this strategy:
- A recent study shows that influencer marketing generates roughly twice the sales of paid advertising. Furthermore, customers have a 37% higher retention rate (Forbes).
- With television viewership decreasing nearly 20% during the first quarter of 2015, broadcast networks are turning their attention to YouTube influencer strategies (The Wall Street Journal).
- 84% of marketing and communication professionals are expected to implement a minimum of one influencer marketing campaign over the next year (eMarketer).
Now that you understand the power of influencer marketing, it’s time to get started.
The Growth of Brand Influencer Partnerships
Let’s face it: people trust what other people (as opposed to corporations or advertising) have to say. This is why influencer marketing has become such a powerful and effective marketing strategy.
According to Nielsen, 84% of consumers say that they somewhat or completely trust recommendations from friends, family, and colleagues.
Though you can’t immediately befriend thousands or millions of people, you can “befriend” one influencer. When you align your brand with an influencer, you are positioning your product or service for display to his or her already-established large network of individuals who trust what the influencer has to say.
As outbound marketing continues to fall off and inbound marketing grows in popularity, influencer marketing has become one of the most effective techniques for attracting customers.
Consumers of today are not the same as consumers of the past. They don’t listen to everything they hear on television or the radio. They don’t read billboards and take the information to heart. And they don’t trust large companies (at least, not until they take the time to get to know them and the company has earned their trust). They do, however, listen to what other people have to say.
If you don’t believe this to be true, consider this statistic: in 2014, 88% of people trusted online product or service reviews as much as personal recommendations—up from 79% in 2013.
Influencer marketing can make up a large portion of an inbound marketing campaign. And here is how: they are staffed with the responsibility of generating and distributing content about your brand.
When influencers recommend your brand to their following, they become an extension of your company’s marketing department.
Why Brands Rely on Influencer Marketing
Even though influencer marketing is a relatively new strategy, it continues to be a viable solution for marketers who are willing to think outside the box.
Before we discuss the many benefits of influencer marketing, here is something else to consider: most companies don’t want to get left behind. Even if they are not 100 percent confident in this tactic, they often give it a second look because their competition has already moved in this direction.
Now, here are five reasons why brands are relying more heavily on influencer marketing:
1. The Power Is Real
There aren’t many things that drive sales more effectively than good ol’ word-of-mouth marketing. A study by Radius Global found that “Millennials ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products.”
Even if you don’t dabble in one of these spaces or target this market, it’s hard to ignore the power of these unofficial brand ambassadors.
Influencer marketing provides an opportunity for companies to leverage the power of social proof, all the while relying on those who already have a large following.
2. It’s a Social Thing
The Pew Research Center notes that as of January 2014 “74% of online adults use social networking sites.” It’s safe to assume that this number has increased over the past two years.
Social media is no longer the little brother of traditional media. Notice how many brands take the time to push their social media handles on you. A URL is no longer enough. Companies want you to do more than visit their website. They want you to interact with them via social outlets.
Consumers expect brands to bring the conversation to them. With this trend, influencers hold more power than ever before. By partnering with the right influencers, brands can create conversations that relate to their target audience.
3. It’s What Consumers Want
Go back in time 25 years and television commercials were all the rage. Companies were burying money into this strategy, realizing it was the best way to connect with consumers.
And then something happened. The Internet exploded and pushed us into the digital age. Fast forward to 2016 and consumers no longer have the same level of interest in traditional media.
Companies are still advertising on television, with $79 billion spent in 2015. Even so, digital advertising is on the rise, accounting for $52.8 billion that same year. Where will things go next year? How about five years from now? Don’t be surprised if digital overtakes television advertising in the near future.
It’s not because advertisers necessarily want to spend more on digital than other forms of media. It’s because this is the best way to reach consumers.
4. A Positive Impact on SEO
In its own right, influencer marketing is powerful. It yields results by helping brands reach their audience.
But what about the secondary benefits? For example, influencer marketing can help your search engine rankings. There are many reasons for this:
- It increases the number of high-quality inbound links.
- It increases your social reach, which has an impact on rankings.
- It helps build a strong brand.
These are all things that Google is looking for. And these are all things that result from a sound influencer marketing campaign.
5. Track, Track, Track
There is no point in running a marketing campaign that can’t be tracked. Not only is this a wild shot in the dark, but it’s also a great way to lose money.
Influencer marketing is different. Since you are dabbling in the digital world, everything can be tracked. Think about things such as:
- Visits to your website
- Social likes and shares
- Images posted online
- Conversations on social media
With the right tracking strategy in place, you no longer have to guess if your influencer marketing campaign generated a positive return on investment.
How to Identify the Perfect Influencers
Your excitement is building. You now have a clear idea of why brands are relying on influencer marketing.
It’s time to take the next step. This means one thing: identifying the perfect influencer.
You may not find many people who fit your exact profile, but as long as you have “standards” in place you will have the direction you need.
Here are three points of emphasis when seeking the perfect influencers for your brand:
There is nothing more important than reach. An influencer is only an influencer if they can actually influence others. Makes sense, right?
Simply put, the larger the reach, the larger number of people will see your product or service. An Instagram user with 1,500 followers may be able to generate some results. But a user with 150,000 followers can really push your message to your audience.
Of course, bigger is not always better. You should also take into consideration past engagement, as this helps you understand if the person’s audience truly listens to what they have to say.
Sticking with Instagram, you may find that a person with 15,000 followers receives an average of 500 likes on each update. Conversely, a person with 30,000 followers may only receive an average of 100 likes per update.
While the person with more followers will put your brand in front of more people, the update may not receive as much engagement.
This is a balancing act with a trial and error component.
One of the primary mistakes among influencer marketers is chasing after personalities with a large following and nothing else. As noted above, a large reach is a good place to start. But again, it’s not the only point to consider.
You must make sure that the person’s audience matches your brand. For example, a swimsuit model with 100,000 followers could be the perfect target if you are selling women’s apparel. But would this person be able to do anything for your software business? Probably not. This influencer’s audience is not interested in software.
3. A Natural Approach
There are two sides to influencer marketing: brands and influencers.
On one side, companies are willing to pay influencers to push their product or service to their audience.
Conversely, influencers are willing to push the product or service as long as they get paid a tidy sum for a small amount of work.
But here is the catch: some influencers take this one step too far. It seems that every update they make is some type of product plug. Over time, their audience takes notice and the effectiveness begins to wear off because, as with traditional marketing, people don’t want to be sold something; they want to see the value of something.
Align yourself with people who take a “natural approach” to influencer marketing. They are willing to partner with some brands, but are selective about who they partner with.
Make it Mutually Beneficial
Just like any relationship, influencer marketing should be a two-way street. If your brand is the only party that benefits, you won’t be long for this strategy. You will eventually find that nobody wants to partner with you.
With a mutually beneficial arrangement, your influencer marketing campaign will thrive.
If a person is willing to share good things about your brand, they should be rewarded accordingly. Here are some of the many ways to compensate your influencers:
- Cold hard cash. This isn’t always the best option, but influencers love receiving money for providing a plug. The primary issue with this is that the person may not be truly invested in your brand. You may find that they don’t put their heart into the project, but instead do it just for the money.
- Free product or discount. Why not offer somebody a free product or discount in exchange for a shout out? This doesn’t have to be the only arrangement, but it is a good way to build a relationship. Over time, you may phase this out and opt for another form of payment.
- Commission. This is a win-win, as both parties have skin in the game. You pay the person to share your brand with their audience and any sale they generate will result in a commission paid to the influencer. As long as you are fair with the commission structure, this is one of the best arrangements.
Set a Budget, Track Your ROI
Last but not least, it’s important to set a budget. How much are you willing to spend on this strategy?
Keep in mind that a poll by influencer marketplace Tomoson shows that for every dollar spent on influencer marketing, businesses are generating $6.50 in revenue—and 70% are earning $2 or more.
Maybe you have a particular dollar amount in mind. Or maybe you are measuring this based on the time it takes to connect with influencers.
It’s easy to go overboard with influencer marketing, as every opportunity will appeal to you in some way. It is your job to stick to your budget and only spend money when it makes sense to do so.
The easiest way to start out is: with each dollar you spend, track your ROI. See what your results are. Not only does this show you what is and is not working, but it also puts you in position to tweak your strategy and increase your budget in the future.
If you agree with the 54% of people who believe that word of mouth marketing improves marketing effectiveness, there is no point in waiting any longer.
You now know what this strategy can do for you in terms of brand awareness and ROI. You also know how to get started, so what are you waiting for?
Have you experimented with influencer marketing in the past? Were you impressed or disappointed with the results? Share your experiences in the comments below!