Reaching customers during their decision-making process is one of the most coveted goals of sales and marketing professionals. Reaching someone at just the right time with just the right information can have a profound effect in influencing a purchase, especially if it is coming from a person of trust. Say, for instance, a man is looking to invest money. There will be many steps that go into the decision-making process of what to invest in. He might read some recent articles about the stock market in reputable investment magazines. He might get some advice from blogs written by investment gurus about investing in real estate. He might hear a radio commercial featuring a celebrity recommending investing in bonds. And he might get advice from friends and family members who have successfully managed their own investments. Some of this advice will be considered and some will be discarded. The man is more likely to listen to someone who is a trusted advisor, friend or colleague, especially if he is in the midst of the decision-making process.
Indeed, this is known as Influencer Marketing. Influencer Marketing is one of the best strategies for successfully infiltrating and influencing the decision-making process. Hence the name. Just how does Influencer Marketing work? And how effective is it?
People with the Power to Influence
How does Influencer Marketing work? A brand pinpoints key individuals within their community or industry who are well connected in their respected field. These influencers can help generate genuine brand awareness and – more importantly – persuade others to take action. Influencers who team up with brands and causes about which they’re passionate are usually successful in helping to spread the brand’s message to a wide audience. Because this audience already has a trust-based relationship with the influencer, they’ll be more receptive to the message and more likely to take action.
Influencer Marketing has become very important among sales directors, brand managers and social media marketers. Why? In 2013, Influencer Marketing campaigns were found to drive 16x more engagement than paid or owned media, according to a SocialChorus Report. By 2015, a 2015 survey by Tomoson found that businesses were making $6.50 for every $1 spent on Influencer Marketing. The top 13% of businesses make $20 or more on every $1 spent. Most businesses get solid results from Influencer Marketing, with just the bottom 18% failing to generate any revenue.
Yes, it is that powerful. But this is not really news. We’ve seen the power of Industry Insiders and Influencers for decades. According to Malcolm Gladwell, NY Times Columnist and author of numerous books on human behavior and success, there are people who are information specialists or information brokers. In “The Tipping Point,” he called them Mavens… people we rely upon to connect us with new information. Mavens accumulate knowledge, especially about the marketplace or a topic or issue, and know how to share it with others. According to Gladwell, “a prototypical Maven is someone who is almost pathologically helpful. It is someone who wants to solve other people’s problems, generally by solving his own.” Mavens start “word-of-mouth epidemics” due to their knowledge, social skills, and ability to communicate. They are information brokers, sharing and trading what they know.
What has really made Influencer Marketing even more important has been the power of social media to amplify the reach of Mavens or Industry Insiders. Social media has paved the way for peer recommendations to play a broader and deeper role in purchasing decisions. According to a McKinsey Study, marketing-inspired word-of-mouth generates more than twice the sales of paid advertising, and those customers have a 37% higher retention rate. When those recommendations are made by information-rich, trusted sources, those recommendations become uber-powerful.
Implementing Influencer Marketing is Different than other Strategies
When working with Industry Influencers or Mavens, brands have to take a step back and allow influencers to take control of the narrative in order to preserve the authenticity of what is being communicated. For some businesses, that can be a challenge. Global brands that are used to controlling every aspect of their brand may have trouble letting go.
Case in point. Recently, Sprite hired basketball giant LeBron James to do a sports commercial that poked fun at how he refused to influence viewers into drinking Sprite. He repeated at least a dozen times “Even if they ask me to tell you, I won’t tell you to drink Sprite.” It could be dubbed the anti-Influencer ad. That’s because today’s consumer can tell the difference between an advert, a personal recommendation, and an advert masked as a personal recommendation. For Influencer Marketing to work, authenticity and credibility is key. Indeed, consumers are savvier than ever, and know when they are being manipulated. As soon as a company tries to interrupt the Influencer’s voice and shove corporate words in a Maven’s mouth, there is no purpose in engaging them.
Jumping on the Influencer Marketing Bandwagon
A recent study found that 67% of marketing professionals say the biggest challenge they face in doing Influencer Marketing is identifying relevant influencers for their brand. They have trouble identifying potential Influencers because it is hard to calculate just how much influence the Maven might have over others.
In the past, brands may have focused on celebrities and high-profile individuals in the arts but today there is a new wave of industry bloggers and insiders who can have just as large an impact. Influencer Marketing can utilize any individual’s influence over potential buyers. In some cases, they are genuine fans of a brand. Also, social media platforms – from YouTube to Snap (formerly Snapchat) to Pinterest — have created an army of Industry Influencers and Mavens who speak to potential customers in all types of industries from cosmetics to automotive to fashion and beyond. But an Industry Influencer isn’t just someone who has a lot of social media followers or likes. It’s driven by expertise and credibility on subject matter and the relationship between the influencer and his or her followers. So a Maven could be a religious leader who blogs, or middle aged business professional who is a subject matter expert, or even a teenage girl who creates You-Tube videos.
For companies wanting to implement Influencer Marketing, instead of looking at how many friends or followers or links a potential Industry Insider or Maven may have, a better way to calculate an Industry Insider’s power to influence is to multiply the Maven’s audience reach (# of followers) by the Maven’s expertise and credibility in relation to the industry or brand by the strength of the relationship the Maven has with his/her followers. It is an equation that may be hard to calculate but more accurately reflects the Maven’s actual power to influence.
So what’s in it for the Industry Insider or Maven? Revenue. Most do it for the money. According to a survey of 50 Industry Insiders, 54% said they would work with brands who respect them just as they would with any other publishers or sponsors. But what the Industry Influencers also want is to be respected by brands who work with them. While they may not have the pedigree of a big name publication or a degree from an Ivy League school, they have earned their influence and will not allow brand executives and marketers to disrespect or manipulate them. For them, the key thing is relevance. Industry Insiders like to be able to earn revenue but not at the expense of their audience. They are willing to work with brands who offer real value to their followers. The best Influencer Marketing campaigns are very organic and do not look like advertising. They seem to work best when brands engage influencers to tell a story on behalf of the brands in intuitive ways. That’s good since anywhere from 10-40% of all consumers now have ad-blocking tools on their social media accounts and smartphones.
Final food for thought for those companies thinking about dipping a toe into the Influence Marketing waters. The list of influential people on social media is constantly changing. Today’s influencer may be tomorrow’s has-been. It is important that brands keep up-to-date with who the current influencers are and ensure that that person is still able to exert influence on the target audience, because the fast pace of change affects everything… even influence.
Quote of the Week
“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.”
© 2017, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.