Case Study: Using the Lumio Magic to sell products through Influencers on Instagram

Dan Anisse
Mar 2, 2018 · 7 min read

One of the biggest questions behind Influencer marketing is Return on Investment (“ROI”). If I spend a certain amount of money on an Influencer, what do I get in return? How much should I expect in return? Irrespective of your campaign goal, you should be using data to increase the probabilities of you achieving that campaign goal. For this case study, we tested one of the most difficult objectives — sales. We sought out to determine what exact indicators increase the probabilities of an Influencer making sales. Why? To subsequently illustrate how, as a result, brands can achieve an increase in ROI.

To keep it simple we decided to sell cosmetics through beauty Influencers since make-up is easily purchasable online. We also owned an online store that focused specifically on makeup products that could be shipped globally.

In putting this case study into effect, we produced a list of 87 Influencers with the following criteria:

· They had visually appealing content

· An audience related to make-up

· An engagement rate over 5%

· A female audience of at least 70%

At the time, we were only able to use the standard method of selecting Influencers, since we had not yet created Lumio.

If the above criteria was satisfied, each Influencer was given a two-day window to generate sales using a unique URL created by us to place in their Instagram bio.

Findings

From the 87 Influencers only 5 were successful in actually driving sales! Unsurprisingly, we were left incredibly clueless as to what went horribly wrong. Why did Influencers with a good engagement rate, a high female following, who posted quality content, perform so poorly? This led us to wonder whether there was a better way to measure the ‘quality’ of an Influencer prior to a campaign? These questions inevitably proved to us that there was a need to design an algorithm that specifically analyses an Influencer’s following. It was this exact idea that subsequently formed the basis Lumio.

As a result, we set out to precisely measure the ‘quality’ of an Influencer using our ‘Valuable Followers’ metric and the ‘Lumio Quality Score’. Armed with our new-found metrics, we decided to analyse results from our past campaigns with a new perspective, and we found the following:

· 81% of sales come from Loyal Fans, High Engaged and Engaged profile types.

This shows conclusively the importance of understanding an Influencer’s following before you work with them. Ideally, you want to work with Influencers who have a majority of their following from the above profiles.

· Sales only came from 5 out of the 87 Influencers with a Lumio score above 60

That’s right, only 5 out of the 87 Influencers made sales! This ends up being a success rate of only 5.7%. This, again, demonstrates the importance of using the Lumio Score to select the right Influencers.

“81% of the total sales came from Loyal fans, High Engaged and Engaged profile types”

· 18% of sales actually came from ‘Influencers’

By way of our data, we were able to reason that Influencers who had a following encompassing other Influencers was not necessarily a bad thing. What we can assume from this data is that Influencers potentially look at other Influencers for inspiration as to what they should promote on their feed themselves.

· The remaining 1% of sales came from ‘Low Engaged’ followers

Naturally, you want to avoid working with Influencers who have a majority of Low Engaged and Ghost profiles in their following breakdown. Why? Because these followers rarely engage with the Influencer, and therefore the chance of making sustainable sales is significantly diminished.

“Only 5 out of the total 87 Influencers made sales!”

Conclusion

These results proved to us that our ‘just spend-and-hope-for-the-best’ approach was not the smartest, most productive, nor cost-effective way to work with Influencers — instead; these results evidenced to us that there really is a science behind Influencer marketing, which can be replicated. In summary, we learnt from using Lumio insights, that for future campaigns we need to take into account the following factors when selecting Influencers:

· Understand the Influencer’s Follower Breakdown

Brands need to make sure that the majority of the Influencer’s Follower Breakdown consists of Loyal Fans, High Engaged and Engaged profiles — Why? Well, put simply, because these followers actually buy from the Influencer. Influencers who have a good Follower Breakdown (via the ‘Valuable Followers’ metric) are of ‘quality’ for brands. How do we know this? Put short, Influencers who have a bulk of their followers recognised as ‘Valuable Followers’ will have a better Lumio Quality Score.

· Aim to work with Influencers who have a Lumio Score above 60

Based on our case study, our sales were solely generated by the five Influencers who had a Lumio Quality score of above 60. These Influencers had a majority of their following consisting of Loyal Fans, High Engaged and Engaged profile types (the followers who proved to only transact with the Influencer) and less of the ineffective Low Engaged and Ghost profiles types (the followers who failed to buy). Therefore, if brands aim to select Influencers with a Lumio Score above 60, then brands will, as proven: have a higher proportion of Valuable Followers viewing their content; and, have an increased change of achieving and attaining a successful campaign.

At the same time, brands need to also make sure that their product aligns with their chosen Influencer (which can be validated via our Audience Interest Report) as well as make sure that the product fits within the style of their chosen Influencer’s feed, otherwise it can negatively impact the results of your campaign. The target for each and every brand should be to align the Lumio Score, Audience Demographics, and Audience Interests findings so to maximise the probabilities of an Influencer actually selling your product.

This case study was done with the pure intention of making sales through an Influencer. However, for some brands, quality content may be the goal for their campaign. As much as we agree, the Lumio Quality Score does not take this into account as quality of content can only be subjectively judged by the opinion of the brand. Why? Because the Lumio Quality Score is a metric designed to measure the quality of an Influencer’s following, not the quality of their content.

We are also aware that the goals of Influencer marketing are not always simply just to make sales, and might instead include building relationships and long tail conversion etc. We understand that you might want an Influencer to alternatively build awareness for your brand or generate visitors to your website.

Irrespective of a brand’s goal, there is still a positive correlation between an Influencer having a high Lumio Score and their greater potential to generate ROI for brands. Especially since attaining direct sales through an Influencer is, undoubtedly nowadays, one of the most difficult campaign goals for brands to actually achieve.

Brands, we must not forget why they were called ‘Influencers’ in the first place, because an “Influencer” is, according to the Oxford Dictionary: “A person with the ability to influence potential buyers of a product or service by promoting or recommending the items on social media.” If an Influencer can genuinely ‘influence’ their followers to buy a product, then they should, by definition of an “influencer”, be able to ‘influence’ their followers to behave and act in any way, shape, or form (so long as the product aligns with the style and genre of the Influencer’s feed).

“If an Influencer has the ability to ‘influence’ their followers to buy a product, then they should, by definition of an “Influencer”, be able to ‘influence’ their followers to behave and act in any way, shape, or form”

Therefore, in understanding the factors that influence an Influencer’s following to buy, we can see that these same indicators can be used to increase the chances of achieving other campaign goals, such as: gaining brand awareness through impressions, increasing your own following, or driving visitors to your website.

In short, if the Influencer you have selected has a majority of their total following classed as ‘Valuable Followers’, then the statistical chances of your content being effectively communicated and seen, by way of the Influencer, increases substantially. It’s time for brands to work smarter, not harder. This is, basically, what the Lumio Quality Score strives to achieve for brands, because it shows you how to identify the Influencers who truthfully have a “valuable following” in favour of ROI. “Data will talk to you if you’re willing to listen” (Jim Bergeson).

Learn more how you can use the power of data to make better decisions here.👩‍💻 📈

lumioanalytics

Lumio gives you the data to help you to make better…

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Lumio gives you the data to help you to make better decisions when choosing Influencers on Instagram. Find out if your Influencers are actually #Influential and join the Lumionati

Dan Anisse

Written by

Co-Founder & Chief Lumion 😎 @ Lumio 📊 | Join the Lumionati > > https://www.lumioanalytics.com/

lumioanalytics

Lumio gives you the data to help you to make better decisions when choosing Influencers on Instagram. Find out if your Influencers are actually #Influential and join the Lumionati