There’s a reason why brands like Rolex and Mercedes-Benz pay millions of dollars each year to a celebrity like Roger Federer. Studies show that brands enjoy greater visibility when they’re endorsed by a prominent celebrity, especially one with an ethos that resonates with the target consumer.
Influencer marketing is sometimes called the poor man’s version of celebrity endorsements. One key difference is that most influencer marketing campaigns are executed over digital media platforms like Facebook, Instagram and YouTube, so it’s possible to track the return on investment (ROI) from these campaigns quite accurately.
If you’re a small business owner looking to add influencers to your social media marketing strategy, here are the various steps to execute a successful influencer marketing campaign.
Estimate your marketing budget
Many marketing managers plan their campaigns around the influencers they want to hire. While there is nothing wrong with this strategy, it’s worth pointing out that the cost for influencers varies a lot, so your budget will be determined based on the kind of influencers you hire, the demographics you want to cater to, and the kind of campaign you want to execute.
Shoutouts & reposts: These are campaigns where the influencer just mentions you in their post, or reposts something you’ve already posted. The cost of this kind of campaign is much lower than a full-fledged review of your product. The objective here is to gain followers, not necessarily to make a sale.
Partnerships: This is a sort of a barter arrangement between you and the influencer. These campaigns work if you and the influencer have roughly the same level of popularity within your target audience. Such a campaign can be used to either gain followers or make a sale.
Reviews: This is the most effective way to execute an influencer marketing campaign. This approach costs the most and is used to build a brand or make a sale.
Among the various types of campaigns above, partnerships cost the least, since they are a barter arrangement. Reviews are often priced based on the target audience demographic and how comprehensive you want the review to be.
The budget for your influencer marketing campaign also depends on the popularity of the influencer. The cost of hiring an Instagram celebrity with over a million followers is higher than it is to hire someone with 50,000 followers. Also, some influencers insist on a ‘cluster’ campaign where they only accept offers if the client pays for 5-10 campaigns spread out over a month. So although your per-campaign costs could be lower, the total cost of the campaign could blow your budget.
In order to navigate through all these different hurdles, it’s a good idea to finalize a budget first and work out a strategy that stays within it.
Small business pro tip: If you’re getting into influencer marketing for the first time, it’s a good idea to start small. It’s okay to limit yourself to $500 or $1000 for the first campaign, and grow your budget progressively over time.
Devise a campaign strategy
Top social media influencers charge as much as $50,000 for one post. This can be a great investment if you have an online store and a global audience. But a local store that caters strictly to people in the neighborhood might fail to recover the cost of your campaign.
Influencer marketing is not just about getting shoutouts from popular social media accounts. For this to be a sustainable strategy, it’s important to generate a positive ROI from your campaigns.
Niche vs. generic: The trouble with large celebrity accounts is that they attract a varied audience, so you might end up paying to reach followers who don’t fall in your target audience. Niche accounts that specifically target your customers is likely to provide you with a better ROI.
Many vs. one: With a budget of $10,000, you could either hire one large influencer from your niche, or hire two or more influencers with a smaller bunch of followers. Choosing between the two options is not easy. Social media is, in some ways, an echo chamber, and your marketing messages can be amplified by reposts and shares. A large influencer might attract followers with a significant follower-base themselves. A shoutout from such an influencer is likely to get your message out to a wider user base compared to shoutouts from the smaller influencers.
At the same time, the actual ROI (in terms of product sales, for instance) depends to a great extent on how targeted the messages are. It’s easier to get a smaller influencer to agree to your targeted sales messages and your returns might be better.
Multiple campaigns vs. one: The effectiveness of a marketing campaign lies in reinforcing your message. The more times a prospective buyer comes across your message, the more likely it is for them to trust it and engage with you. With a $10,000 budget, should you hire a large influencer who will post once, or is it better to hire a smaller influencer who will post multiple times over the course of a week?
Devising a campaign strategy, along with your messaging, positioning and other factors like the time and day it needs to be posted, is extremely important before you embark on finding the right influencer.
Hiring an influencer
Once you have your budget and campaign strategy in place, it’s time to start looking for influencers. There are dozens of online tools and service providers who can help you connect with influencers in your niche. While this definitely makes your job easy, it is worth noting the disadvantages of using such tools.
One of the biggest issues with such middlemen is that they tend to work with a relatively small bunch of influencers who have already worked on hundreds of such campaigns. Their followers have likely been exposed to several such campaigns, so response rate will likely be lower, especially for small businesses with very little branding.
If you don’t mind putting in the effort, a more effective strategy would be to discover influencers yourself. Dig deeper into your followers to look at the kind of accounts they engage with. You could reach out to these accounts if they engage with their followers, fit your demographic criteria and do not have a lot of sponsored posts already.
It can take a lot of time and effort to find the right influencers, and doing so is absolutely essential for a successful campaign.
Tracking your campaign
Once you’ve executed your campaign, it’s worth tracking its impact on each of your metrics. You might insist on using pre-crafted short URLs in your campaigns since this helps track your clicks and visits more accurately.
It’s worth pointing out that shares and reposts should not be a measure of success in a campaign. While they do help in amplifying your campaign, they don’t directly contribute to the success of it. This is of course not true if you’re working on a branding campaign. But if you, like most bootstrapped small businesses, are looking for conversions, then branding is not something to worry about at this stage of your business. Measuring the followers you gain, along with website clicks and conversions, is a better way to gauge the success of your influencer marketing campaign.
Building a sustainable strategy
It is a good idea for a small business to start small and try an influencer with a modest following. These accounts have targeted followers and also cost less. In addition to carrying your lessons forward in a larger campaign, such a strategy also paves the way for your business to reinvest profits from smaller influencer campaigns into larger ones, making the entire channel self-sustaining in the long-term.
Author Bio: Anand Srinivasan is the founder of Hubbion, a suite of free business apps including tools for project management, email discovery and meeting room booking.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.