How to effectively utilize your influencer marketing budget

How to effectively utilize your influencer marketing budget

It is a myth that marketing a product needs significant investments. These days, what matters is not how much you spend, but how effectively you spend your money. There are many cases where novice brands have given market leaders a run for their money with modest marketing budgets. A case to note is Off the Beaten Track (OTBT), An American women’s shoe retailer started in 2017. They focused on an influencer campaign only with micro- and Nano-influencers, many of them hired from influencer platforms. By 2020, they had amassed more than 400 influencers whose content-based marketing helped them reach 750,000 people with similar interests. To date, more than half of their revenue comes from e-commerce where their influencers help them drive sales. 

5 Steps to get the maximum out of your influencer marketing budget

Step #1- Finding the right influencers

This is crucial. We are not talking about hiring celebrities or influencers with tens of thousands of followers. Though your marketing message will spread to a large audience with these people, they do not have the personal touch that is needed to coax the target audience towards a purchase. As is the case with OTBT, micro and Nano influencers are worth their weight in salt. The biggest leverage you can get from these influencers is the ‘personal connect’ they have with their followers. The micro and Nano influencers work hard to create content that interests their users; when they sponsor your brand, they do not sound forceful and explicit, and they give their users a genuine reason why they should buy your product.

Step #2- Having a mutually beneficial payment structure

Working with your influencer is not just a simple vanilla transaction- you have to motivate your influencer to help you get leads and conversions. Your influencer marketing contract should include-

An upfront payment- This lump sum payment gives the influencer a fixed rate for the content they create. Usually, influencers with a larger number of followers expect an upfront payment along with a variable payment as per the number of conversions he gets you.

Result-focused payment- This variable performance-based remuneration is ideal when you do not have a big budget. This motivates the influencer to give his best to earn as much in commissions from the link posted along with the content.

Payment in kind (goods)- Usually, micro-influencers would be more than happy to review a product you gift them. They use this influencer platform to help increase their followers. However, this does not work all the time- the more followers, the more you will have to offer them in upfront payments and result-focused payments.

Step #3- Making cost-effective content

Your influencer will do as per your instructions. However, this does not mean you miss the opportunity to re-share your influencer’s content. This helps you to channel more of your influencer’s followers to your social media pages. Some brands even reuse their influencers’ content to create social media banners, website banners, and other marketing materials.

User-Generated Content (UGC) – To generate engaging content, many brands encourage their customers to create and share content with a branded hashtag. This could be personal experiences, art, or creative ways of using the product. This helps brands to create brand awareness and identify potential influencers without spending much.

User-generated recommendations- Many influencers promote products that they find useful, not necessarily for the product’s brand campaign. These could be products that they have used or reviewed according to their personal experiences. 

For brands, this is a free endorsement for their products. You can mention these posts in the marketing content to give your customers a genuine organic endorsement of your product.

Step #4- Analyzing data

You need to keep track of each of your influencer’s performances so that you can approach them again for further influencer marketing campaigns. This is easy, you can give them a special promo code, link, or coupon code that their followers can use to buy products from your brand. Facebook, Instagram, and other social media platforms have in-built insights data that helps you measure the number of likes, comments, and shares each of the sponsored posts brings.

Step #5- Making your influencers brand ambassadors 

Influencer marketing is not a one-off thing- you will need to hire them periodically. If some influencers are working consistently better than the others, you can approach them to become brand ambassadors of your brand. This will ensure these high performers will not go to your competitors and that you have someone who will work for you consistently. Many brands, especially airlines, use this strategy to keep their customers engaged and loyal to their brands.

This also takes away the hassle of vetting potential influencers for your various campaigns regularly. It always makes sense to spend your money wisely on those who can help you make the right impact. This has been a proven strategy many brands have used to reach the pinnacle of success.

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