With social media taking over the world, there has been a paradigm shift in the way that consumers make their purchases. Consumers are increasingly looking at fellow consumers or their favourite celebrities before indulging in any purchases. Consumers assign great importance to a recommendation coming from a trustworthy fellow consumer. Everyday consumers are at par with celebrities, industry experts and bloggers when it comes to impacting a consumer’s decision.
Digital revolution has given birth to the online form of word-of-mouth marketing i.e. Influencer Marketing. Influencer Marketing helps to shift a consumer's decision needle in the favour of the brand by serving as a voice of authority. A study conducted by McKinsey illustrates the fact thatinfluencer marketing generates more than twice the sales that paid advertising does, along with a higher customer retention rate.
The Process of Influencer Marketing
- Monitor brand related conversations to understand what individual influencers and people in general are talking about and simultaneously study conversations that are relevant to your brand.
- Identify a pool of individual influencers who might be right to spread messages concerning your brand and help in influencing the purchase behaviour of both, existing and potential influencers. This can be done by following their digital presence and social media accounts.
- Evaluate the influencers in detail with respect to what they talk about, what interests them, who their target audience is etc. In addition to that, study the common factors that group the influencers under a particular category. This enables a brand to create a database of all the influencers that is suitable for the brand and devise means to encourage the influencers to start talking about your products and services.
- From within the database, the firm needs to locate the influencers that are best suited for a particular campaign. This helps the firm in getting the right set of influencers on board who actually enjoy talking about the product category. This can be done by interacting with them on social media, engaging with the content they post etc.
- Initiate contact with the identified influencers and get them to come on board with your brand. You can indulge in direct promotional outreach campaigns, get the influencers to write good quality content about your brand or even ask them to review your company’s products and services. This helps create positive WOM and generate a level of engagement with your brand.
- Provide incentives to your influencers so that they put in that extra effort to promote your brand. These incentives may be tangible such as freebies or discounts, or intangible such as popularity or recognition.
- Monitor your progress and track your results to ensure that your influencers generate positive returns for your firm, both in terms of brand recognition and repeat sales.
Success Metrics for Influencer Marketing
Merely indulging in Influencer Marketing is not sufficient, you need a metrics to measure whether it’s actually working for you or not. While conducting a case study on Hokey Pokey, Kumar and Mirchandani came up with what’s known as a Customer Influence Effect, the Stickiness Effect and the Customer Value Index as a metrics to measure the success of influencer marketing on social media.
Customer Influence Effect
It measures the amount of influence a person has on other people while engaging in a relevant conversation about a particular subject. The influence exerted is relative to that of the other consumers.
It attaches individual influencers to a certain category of keywords, depending on the association of the words with one another along with other words used by people around the world. This aids in gauging the potential size of the target market and the kind of related subjects the influencers talk about.
Customer Value Index
It studies the influence that an individual influencer has on other current and prospective customers. This is computed as a combination of the value that the influencer brings to the brand through his purchases and a proportion of the Customer Lifetime Value of his influencee’s purchases due to his influence.