Does Influencer Marketing Work?

What comes to mind when you hear the word “influencer”? Poser? Racket? Scam? Waste of money? Or do the words “opportunity," “sales” and “brand” pop up? The reality is that there are many small businesses in who firmly espouse the first sentiment either by experience or by belief.

If you grew up in the 80s and 90s, I’m sure you’ve heard of Michael Jackson, the king of pop. During the same period, another MJ popped (pun intended) up in sports, specifically, basketball. Michael Jordan. And man, did he not entertain. He also signed an average deal with a fledgling company called Nike. The brand agreed to an upfront commitment of $500,000 per year for five years, his own sneaker line plus stock options. 36 years later, Michael Jordan is worth $1.6 billion. By the end of 2019, it was estimated that the Jordan brand was worth $3.3 billion, Michael Jordan earning close to half that.

With that backdrop, it is clear influencer marketing isn’t anything new. And more importantly, influencer marketing isn’t an enclave of big brands like Pepsi with Beyonce or State Farm with Drake. The internet and its platforms have opened up new and engaging ways for brands to connect with their customers. However, influencer marketing in the current era has been abused by both brands and influencers to the point where customers are cynical when they see their heroes gushing over a product they love on Insta or Tiktok.

What can small businesses learn from this?

Big brands tend to go with famous people. And that makes sense because famous people have mass market appeal that big brands desire. And that creates a win-win situation for the artist and for the brand. However, it would be a mistake to assume that fame and sales go hand in hand. The consumer is incredibly smart and she’ll smell insincerity and affectation a mile away.

Because it is the brand hiring the influencer, they have the burden to ensure they get the results they want. So how do brands get it wrong?

1. Lack of Clarity Regarding Campaign Outcomes

Are they generating demand (awareness) or do they want actual sales? Many influencers do not want to be held to tangible sale outcomes. While that may be more than fine for the influencer, wha does the brand require? If the brand is not clear on their expectations, then the campaign will fail. This misalignment may also occur within a brand’s marketing and sales departments with sales looking for conversions while marketing is thinking about brand equity.

2. Poor Choice of Influencer

As business, who you choose to be an influencer is critical. Choosing influencers primarily because of their fame or stature is wrong-headed. One small business refuses to pay influencers. They send out samples to the people who they think would be a good fit to get honest feedback and/or endorsement.

Additionally, choosing an influencer for the number of followers they have as opposed to the number of consistent engagements they have is planning to fail. If an influencer has 1M million followers but less than 100 engaged fans, then he isn’t influencing anybody. A good engagement rate is between 1-3.5%, meaning for this influencer with 1million followers, a minimum of 10,000 of his fans should be engaging with his fans. 35,000 fans is good. 60,000 and above means he is brilliant.

Additionally, acquiring an influencer who genuinely likes and is passionate about the product he is endorsing is critical.

On a similar vein …

3. Poor Product-Influencer Fit

What is your product? Can a beautiful woman influence car sales? Lexus has tried this angle with their video ads. But the car they’re advertising is the midsize RX SUV or compact SUV which is the best-selling SUV in the US - among women. Generally though, cars are the domain of men. Why? Because cars are an extension of a man’s masculinity — the car a man drives is his essence. It is him. Conversely, most women generally do not care about the looks, the horsepower or the size of cars. If they care at all, they care about safety.

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Studies have shown that the products that influencers have the most impact are the beauty industry, followed by travel and lifestyle, then health and fitness. Gaming follows, with sports, family and parenting coming fifth and sixth respectively. And considering influencer marketing is set to grow to be a $16 billion industry in 2022 so if you thought it does not work, you are mistaken.

So how can you change that perspective or get results from your influencer campaigns?

It basically comes down to preparation:

1. Know your product

2. Choose your influencer well

3. Know your target audience and what moves them

Influencer marketing is not going anywhere as long as there’re Ronaldos, Messis, Dwayne Johnsons, Kylie Jenners and the like. And those are the macro influencers. Micro influencers (those with 10,000-100,000 followers on social platforms) exist. It’s looking more and more apparent that nano influencers (those with 1000-10,000 followers) are gaining more credibility. Why? Because their endorsements seem more authentic.

The job of big brands and small businesses and their marketing teams is to approach whatever size of influencer with the end in mind.

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