Influencer Marketing ROI: 7 Proven Strategies to Get Higher ROI

May 30, 2024
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Peter Nettesheim
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Influencer Marketing ROI: 7 Proven Strategies to Get Higher ROI

Brands globally are expected to spend $30.81 billion on influencer marketing advertising through 2023 which is expected to increase to $47.8 billion by 2027. This doesn’t come as a surprise as traditional social media marketing advertising like Meta and Google saturate advertisers are looking for alternative channels to increase ROI. Influencer marketing can be exactly that channel. 

<img src="ad-spending.png" alt="Ad spending for marketing">

As influencer marketing involves campaign management there are a lot more strategies and approaches to increase ROI compared to efficient bidding platforms like Meta or Google. Although there are certain ways to improve ROI on those platforms like A/B testing the header and the creatives there is not much more advertisers can do to increase ROI. With Influencer Marketing on the other hand your ROI depends on the relationships you build and nurture with the right content creators in your niche. As these are human interactions there are a lot more strategies and approaches to potentially increase ROI. In this article we will dive into the most important best practices to get higher ROI when working with influencers.

7 Best Practices to Get Higher ROI with Influencer Marketing

  1. Define your campaign objective
  2. Identify the right influencers
  3. Measure the performance of the posts through tracking
  4. Keep your cost low when working with a new influencer the first time
  5. Build long term relationships with performing influencers
  6. Offer the right compensation based on performance data
  7. Organise seasonality campaigns

Define Your Campaign Objective

Establishing clear objectives is the cornerstone of a successful influencer marketing campaign. Without a clear definition on what you would like to achieve it is difficult to optimise your campaign. Below are some examples of influencer campaign objectives:

  • Conversions
  • Engagements 
  • Brand awareness 
  • Increase social media following 
  • Increase subscribers 

You ideally want to be specific with your goals instead of only focusing on one KPI try to define your objective more in detail. 

E.g. 

  • Increase Instagram following to 120K followers by the of the year 
  • Collect 100 pieces of high quality UGC which can be reused 
  • Generate $2 million in sales this quarter through influencers 

Once you have clearly defined your influencer campaign objectives let's take a look at the different approaches to increase ROI. 

Identify the Right Influencers

Based on the biggest influencer marketing research conducted to date our data scientists were able to compute which influencer metrics correlate with conversions. 

Below are the metrics you should look at when identifying the influencer you want to work with. 

  1. Follower growth
  2. Engagement rate 
  3. Audience size 
  4. Fake followers 
  5. Verified accounts 

To access our full research report on which metrics determine influencer ROI click here. 

Audience size is the only metric which is not as straightforward when it comes to determining ROI. The reason is that the research showed indeed that influencers with a larger audience resulted in a higher number of sales, however it is typically also more expensive to work with influencers with a larger audience. We will cover audience size later in this article and explain how to best structure your campaign to optimise for ROI. 

Free tools to analyse influencers

  1. Fake follower check tool 
  2. Engagement rate calculator tool
  3. Influencer Audit Chrome Extension

Paid tools to analyse influencers

  1. Influencer Hero 
  2. Upfluence 
  3. Modash

Measure the Performance of the Posts Through Tracking

This is probably the most important rule to optimise your influencer campaign for ROI. Without the right tracking in place you are not able to take the right decisions and you will be shooting in the dark. Make sure to have the right tracking tools in place in order to understand where your sales are coming from and continue to improve your campaign based on the numbers you collect.

How to track your influencer performance

1. Affiliate links

The first tool you want to use is an affiliate link. Simply ask the influencer to use this personalised link when they make the post. This way you are able to track clicks and sales. Most affiliate links place a cookie in the browser which will allow you to track the sale even if the customer doesn’t purchase right away. Affiliate platforms like Influencer Hero, Awin or Goaffpro provide the tools to create affiliate links. 

2. Voucher / discount codes

You ideally want to share a personalised discount code for each influencer you work with in order to increase attribution. Whenever a sale is made using one of those discount codes you know from which influencer the sale came from. 

Understanding attribution in influencer marketing

Whenever you analyse the results it is important to keep in mind that attribution is rarely 100% in digital marketing. In fact based on hundreds of campaigns we analysed we know that the industry average attribution rate for D2C brands when using affiliate links and discount codes is around 70%. In order to calculate the actual sales and influencer generates simply divide the tracked number by 70% to get to the actual sales. 

Keep Your Cost Low When Working with a New Influencer the First Time

We constantly repeat the 80/20 principle in influencer marketing. Even when using the most sophisticated tools chances are that influencers don’t perform the way you like. It are typically a small group of influencers which make the majority of your sales. 

Below is an example of an influencer led Black Friday campaign where the only channel used was influencer marketing. 

<img src="black-friday-influencer-campaign.png" alt="Results of Black Friday Influencer Campaign">

We categorised influencers into 3 segments: 

  • HP: High performing influencers: > 10 conversions per post 
  • MP: Medium performing influencers: 3 - 9 conversions per post
  • GP: General / low performing influencers: < 3 conversions per post 
<img src="black-friday-campaign-revenue-contribution.png" alt="Revenue contribution of Black Friday Campaign">

As you can see from the chart above 61.5% of total sales came from high performing influencers. What is astonishing is that only 2.1% of all influencers which participated in this campaign were high performing influencers. 

<img src="black-friday-campaign-sales-and=participation.png" alt="Sales of Black Friday Campaign">

This shows that the majority of your revenues are generated by a small group of influencers. Although it would be great to only work with those influencers unfortunately you will have to go through the work of identifying them. This is why we always recommend to keep the cost low when working with influencers the first time. Before committing to large budgets right away start small and ask for an initial post to get a better understanding of the match towards the brand. Once you have access to the data of this initial post you have a better understanding of what performance you can expect which will make it easier to allocate budgets correctly. 

Build Long Term Relationships with Performing Influencers

Once you have received the first post you want to analyse the results. The whole purpose of this is to identify your winners and the influencers which are able to generate sales. Once you find them make sure to build a lasting relationship and keep them engaged. We recommend sending a bouquet of flowers or doing anything else above and beyond to show your appreciation. These are the influencers which will help your brand become a household name. 

Offer the Right Compensation Based on Performance Data

It is important to compensate the influencers based on performance. This is the underlying process of optimising your ROI. Your ROI consists of two components: the revenue you generate and the cost of advertising. Reducing your cost while maximising your sales is the way you maximise ROI. Below are ways to compensate your influencers based on past performance. 

Work with fixed payments for high performing influencers

When working with high performing influencers it is recommended to work with fixed payments and ideally bundle multiple posts together in packages. The reasoning behind this is that you typically get better rates when bundling together multiple posts. At the same time the total number the influencer sees looks more attractive while you are able to get a better rate per post. It is the same as with any other business: economies of scale. 

Below is an example of the top 10 performing influencers of a campaign. You can clearly see that we agreed to fixed payments for almost all these influencers. Affiliate becomes expensive when working with influencers which perform which is visible by influencer 10 in the table below. 

<img src="influencer-campaign-performance.png" alt="Influencer campaign performance and revenue">

Work with affiliate commission with low performing influencers

With low performing influencers or influencers you have never worked with before you ideally want to work with affiliate commission only. Be generous here remember 30% of the sales are not being tracked which means that you are paying less than what the influencer actually makes. The benefit of affiliate compensation is that you are able to hedge your downside. You only pay if the influencer makes sales. 

Work with a combination of fixed payments and affiliate commission for medium performing influencers

With medium performing influencers we recommend to work with a combination of both. You know that they are able to sell but it can fluctuate which is why you want to implement some buffer to reduce risk. The fixed payment will lock them in and get them to commit to the posts while the affiliate commission is a great way to keep them motivated while you reduce your risk.

Organise Seasonality Campaigns

The most powerful way to drive conversions with influencer marketing is through seasonality campaigns. You need to give your customers a reason to buy and the best reason to buy is if there is a promotion. Below are some of the most important elements which determine ROI: 

  • Good offer 
  • Urgency 
  • Social proof 

The best way to cover all three is by having a group of influencers talking about your offer at the same time sharing about the special offer. Think how the influencers would announce that your brand is having a special promotion. Ideally give the influencers a special offer which they would mention in the post. It is your responsibility to think how you can communicate through the influencers to your audience. By incorporating exclusivity the influencers will feel special and at the same time by announcing an exclusive offer it will increase conversion. 

Read our full article on how to organise seasonality campaigns with influencers here.

Conclusion

In conclusion, leveraging these seven proven strategies can significantly enhance your influencer marketing ROI. By clearly defining campaign objectives, identifying the right influencers, and meticulously tracking performance, brands can maximize their returns. Building long-term relationships with top-performing influencers and optimizing compensation based on performance are crucial for sustained success. Additionally, strategic seasonality campaigns can create urgency and drive higher conversions. Implement these best practices to elevate your influencer marketing efforts and achieve superior ROI.

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