The Influencer Marketing Playbook

It is all but impossible to walk into the marketing department of a company large or small and not hear talk of influencer marketing as a critical item on the list of marketing initiatives in queue. But despite its rapid ascent into the pantheon of major marketing channels, influencer marketing remains incredibly opaque and rife with misinformation and bad actors. Follower count, engagement and a myriad of other metrics can be (and often are) fabricated with alarming regularity. And though social networks do their best to stymie these bad actors, there are simply too many who are too sophisticated in their subterfuge to be caught. And if the social networks themselves can’t ferret them out, chances are you won’t have much more luck. Pair that risk with the fact that influencers can cost huge sums of money, as can the influencer marketing agencies that help a brand navigate these uncharted waters, and broaching the channel as a whole can feel incredibly daunting.

How does a brand figure out which influencers to work with? How does the brand then measure the return on investment? Even when outsourcing, how does one understand which agencies are reputable and which are little more than pump-and-dump schemes?

Much of the common wisdom in the space suggests finding an influencer marketing agency, using that to scour influencers with tens of thousands of followers (large enough to have an impact, but not so much clout that their costs will break the bank), and finally placing a handful of bets on a subset of those influencers who post content that seemingly aligns with your brand ethos and ideals. More often than not, most people who undertake this strategy walk away with a bit less money in their pockets, a bit of brand awareness, and, unfortunately, the uneasy feeling they may have been swindled. After a little reflection, they shrug and say maybe influencer marketing just isn’t right for their brand or product. The influencer takes their chunk of change; the agency, their fee, and they say better luck next time, no hard feelings, maybe it’s just not for you. Does this story sound familiar?

Many influencers and agencies would have you believe that if this has happened to you, that you are the outlier and for most brands influencer marketing is a huge, untapped channel with enormous revenue potential. Unfortunately, most influencers and their agencies suffer from a fundamental misalignment of interests with their clients.

Luckily, there are great agencies and influencers out there — it’s just up to you to find the right ones for your brand and engage with them in a way that sets you up for success and aligns interests. It’s also a lot easier than many would have you believe, so here’s how to get started.

Find influencers who believe in your product.

This should sound intuitive, but so many people chase the bold-faced name regardless of whether or not they fit the mold of the sort of person who would use their product, much less actually have used it. Does anyone believe most athletes have a preference between Gatorade or Powerade? Consumers are increasingly suspicious of celebrities and influencers who are perceived as simply guns for hire. Never forget that consumers have a remarkable ability to intuitively sense authenticity in advertising. As such, skip the big name and opt instead for the person with the devoted following who raves about your product and expresses real passion and excitement for it.

Build in ambassadorships that incentivize influencers based on performance.

If an influencer truly loves your product and purports to be so influential then they should feel comfortable putting their money where their mouth is and working within a structure that rewards results and makes them a true ambassador for your brand. For microinfluencers, simple incentive structures that reward an influencer with a piece of every sale can suffice. When working with larger influencers who can provide real scale, creating opportunities for them to earn equity in your business based on certain performance thresholds can be an incredible motivator. Influencers are oftentimes very undiversified in their risk — the ability to become an owner in a business and product in return for simply using and telling people about the product is a strong incentive and something they are not offered with great frequency. It provides them with a piece of the long-term upside for helping create your success and it builds an earnest partnership.

Dispense with fluffy concepts like brand awareness and focus on measurable metrics.

Ensure that you have built a system that makes it easy to allocate specific sales to specific influencers and campaigns. There are many ways to do this, though the easiest is simply through using unique coupon codes for each influencer with whom you work. Providing influencers unique tracking links to offer to their readers can automatically apply some sort of discount while also enabling not just sale tracking but also traffic tracking. This then allows you to further understand influencers’ ability to drive clicks and broader audience engagement.

Work with the right agencies.

All of the above points apply to agencies as well. A great agency will be eager to work with you because they believe in your product. Because they believe in your product, they will be open to a compensation structure that is often a mix of a reasonable base fee plus a share of the profit. And because they have agreed to an incentive-based structure, they will be incredibly focused on the actual important business metrics that matter to you. When evaluating an agency partner, if they do not show these characteristics, consider it a serious warning sign. Further, you can benchmark agencies based on their case studies and who they have worked with. The good agencies will be all too eager to provide you references of past clients for you to speak with.

Wrapping It Up

As you undertake building your own influencer marketing program focus on achieving these four objectives.

1. Find influencers who truly believe in your product. They should be fans who just happen to have a big audience.
2. Build in incentive programs that tie an influencers potential compensation to their performance. This can include equity to truly make them a partner in your business.
3. Focus on measurable results and data. Don’t settle for brand awareness.
4. If open to using an agency find an agency who meets all of the criteria above as well — believes in your product, wants compensation tied to performance and understands performance will be measured through results (read: data).

Following these steps will immediately give you a leg up on the vast majority of businesses exploring the influencer marketing ecosystem. All too many influencers and agencies will express initial enthusiasm for your product, but then hem and haw about only doing lump-sum deals, which should serve as the serious red flag that it is. Be ruthlessly focused and disciplined in your principles and you’ll succeed where so many flounder.

About Colin Darretta

Co-Founder at DojoMojo and Founder at WellPath, former Private Equity at CI Capital and Investment Banker at Goldman Sachs. Occasional Angel Investor and Writer.