When you mention influencer marketing, what immediately comes to mind are collaborations between established brands and celebrity influencers. Tommy Hilfiger and Gigi Hadid. Away Luggage and supermodel Karlie Kloss. Beats by Dre’s numerous campaigns, which have featured just about every celebrity — from the Kardashians to James Harden.
But influencer marketing can be implemented across different levels and businesses—and even for subscription businesses working with much smaller budgets, there are significant results to be reaped.
Take beauty subscription box LiveGlam as an example. In less than two years, CEO Dhar Mann took his business from $600 in starting capital to an eight-figure annual revenue. Mann didn’t spend a single dollar on advertising, and instead focused on getting the word out about LiveGlam through collaborations with commission-based influencers.
If you’re looking to get started on influencer marketing, this article is for you. In this first installment, we’ll dive into the key areas that businesses starting out on influencer marketing campaigns often find challenging. There are:
- Choosing the right influencers for your business
- Contacting your influencers efficiently
- Determining the rates you should pay an influencer
Stay tuned for our second installment, where we’ll discuss:
- Calculating the ROI of your influencer marketing campaign
- Best practices that subscription businesses can implement
How do I choose the right influencers for my business?
The following questions can help you assess if an influencer is a good fit for your business:
- What’s my target audience? There are different segmentation approaches you can use to identify the key characteristics of your target audience. The main approaches are abbreviated as GDPB—geographic, demographic, psychographic and behavioral segmentation.
- What is the main role of the influencer? This refers to the main goal that you want your influencer to achieve for your campaign. One example would be that your influencer needs to increase sales by 25 percent in the first three months of your collaboration.
- What is the role of the influencer in the campaign? This refers to actionable steps that your influencer can take to achieve their main campaign goal. If your goal was to have your influencer increase sales by 25 percent by the first quarter, you can then break this down into steps that your influencer can take, such as having to create three posts per week during this period.
- Which type of influencer is most suitable for my brand? It’s important to keep in mind that bigger isn’t necessarily better. As a New York Times article points out, a nano-influencer’s lack of fame can make them appear more approachable compared to macro- or micro-influencers. Their recommendations also seem like genuine advice you’d hear from a friend. Plus, these influencers charge lower rates too, which can be a better fit if you’re in the early stages of running your business and need to work on a small budget.
- What influencer marketing campaigns are your competitors implementing? It pays to keep tabs on what your competitors are up to—such as the types of influencer marketing campaigns they are launching, the influencers they work with and the platforms that they use. You can gather inspiration from their strategies, or draw comparisons to identify areas of improvement in your own strategy and campaigns.
How do I contact influencers efficiently?
Once you’ve identified influencers who are a good fit for your business, the next step is to get in touch with them. This can often be tedious and time-consuming, so we’ve included a few tips you can use to make your process more efficient:
Use the right tools
When contacting influencers, there are a few tasks that you’ll need to do repeatedly, like sourcing for influencers to work with, searching up their emails or setting up an introductory video call. By using tools created specifically to perform these tasks, you’ll be able to speed things up. These tools can help:
- Scheduling tools: Calendly, ScheduleOnce
- Email finding tools: Hunter.io, Find That Email
- Platforms and tools for finding influencers: HelloSociety, FameBit, AspireIQ, FollowerWonk, GroupHigh, Topsy, Ninja Outreach, Scrunch
Make it easy for the influencer to follow up
It’s no secret that influencers are busy people, and they’re likely to receive many emails on a daily basis. To increase your chances of getting a positive response, you need to make it easy and effortless for them to follow up. That means:
- Adopting email best practices: Emailing best practices are simple and effective, yet are often overlooked. These include: using impactful subject lines, keeping your emails brief, avoiding mass pitches, using your recipient’s first name and mentioning something specific about your influencer or their company in your email.
- Ensuring that all details are included in the email: Having collaborated with the likes of Neil Patel and Noah Kagan, Eric Siu, founder of digital marketing agency Single Grain offers a tip: “Give them a preview of what’s coming”. For example, if you’re contacting an influencer for a podcast interview, it helps to send over a list of questions so they can get an idea of the flow of the interview. If they’re going to create content for your brand, you should provide specific instructions, along with content samples they can refer to or images they can use.
Being honest and direct about your motivations and purpose will help minimize instances of second-guessing or back-and-forth communication, thereby saving time for both you and your influencer. You should clearly state your offer, expected outcome and the amount of work that the influencer needs to do.
How much should I pay an influencer?
Your first step is to calculate your influencer marketing budget. Writer Felicity Fromholz shares a simple three-step process:
Step 1: Calculate the potential conversions
Let’s say you’re running a subscription box business, and are considering working with an influencer with 100,000 unique monthly views (UMV).
You’re going to assume that 1 percent, or 1,000 of these visitors will see your brand collaboration post. Of these 1,000 visitors, the assumption is that 1 percent will convert. That sums up to 10 visitors who might eventually purchase a subscription.
Step 2: Calculate your LTV and CAC
To calculate these two metrics, we’ll need to assume the following:
Profit margin: 35 percent
Average customer life cycle: 5 months
Therefore, the LTV will be: $45 X 0.35 = $15.75 X 5 months = $78.75
Based on the ideal LTV:CAC ratio of 3:1, the CAC will be: $78.75 / 3 = $26.25
Step 3: Calculate your budget
To calculate your budget, you’ll need to multiply the CAC by the number of people you think will convert: $26.25 x 10 = $262.50
(Want to learn more about how to boost your LTV with marketing? Head here.)
Other costs to watch out for
While you’ve got the calculation sorted out, bear in mind that this is just a rough estimate. It may not be reflective of the final cost you’ll pay your influencer, as there are other elements that you’ll need to take into consideration. These include:
1. Factors that affect the cost of influencer marketing
Each of the factors below can affect the cost of influencer marketing, so you’ll need to tweak your rates accordingly, in order to meet the expectations of influencers you want to work with.
- Social media platform
- Your service or product
- Campaign requirements
- Project timeline
- Costs of production for content creation
For example, a campaign that requires a higher level of involvement from your an influencer will incur higher rates. Similarly, getting an influencer to market a complex subscription service will likely cost more than having them feature a beauty subscription box.
2. Industry rates
It is helpful to have an idea of the rates that other influencers charge for their work, or fees that businesses or agencies typically pay for a campaign. This can serve as a point of reference, and help you ascertain that the rates you want to offer are aligned with general expectations.
Here’s what a few benchmark costs for the various social networks:
- Chelsea Naftelberg, former associate director of content and partnerships for social media agency Attention estimates her team’s influencer marketing costs based on the ‘$1,000 per 100,000 followers’ guideline.
- Henry Langer, senior account manager for influencer search platform Hypr thinks that brands can charge $250 per post for Instagram influencers with less than 50K followers, and add about $1,000 per 100K followers per post.
- According to Instagram scheduling tool Later, a fashion micro-influencer with 80K followers charged $300 for a single Instagram post, and $500 for two posts. A health and nutrition micro-influencer with 30K followers charged the following rates: $325 (per Instagram post), $250 per day (brand IG takeover) and $85 (5 IG stories).
- Langer suggests that YouTubers with over 50K subscribers can charge $2,000 per 100K subscribers. That works out to a cost of $20 for every 1,000 subscribers.
- Tony Tran, CEO of digital marketing startup Lumanu recommends paying about $0.05 to $0.10 per average video view. This works out to a rate of about $50 to $100 for 1,000 video views.
Snapchat influencer Cyrene Quiamco shared the following rates for a 24-hour campaign:
- $500 for 1,000-5,000 views
- $1,000-$3,000 for 5,000-10,000 views
- $3,000-$5,000 for 10,000-20,000 views
- $5,000-$10,000 for 30,000-50,000 views
- $10,000-$30,000 for 50,000-100,000 views
Hopefully, you now have a good grasp on the key concepts you need to know to develop a successful influencer marketing strategy. Stay tuned for part two, where we’ll discuss calculating the ROI of influencer marketing campaigns and the best practices you need to keep in mind.
In the meantime, make sure you’ve got all the other boxes checked for your subscription business with our Six-Month Success Checklist. It covers marketing, along with other foundational concepts, for any new subscription business. Download it today and set yourself up to win:
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Lin Foo is a writer and content strategist, along with being a lover of food, yoga, Latin dance and travel.