Product vs. Payment Influencers
Brands must ask themselves many questions about influencer compensation early on in an influencer marketing strategy. What will I provide my influencers in terms of pay? Which payment method is ideal for my campaign? Is there a standard for what this influencer should be compensated for their services? How can I know if I'm paying an influencer too much or too little?
When it comes to determining what to provide influencers in exchange for work, brands have various factors to consider. Influencer compensation is simply one of the crucial expenses to factor into your influencer marketing budget.
Marketers want to encourage influencers to do their best job by paying them fairly and ensuring a good return on investment. We’ll look at why monetary payment is preferable in some cases and how to set a price. We'll also look at various influencer payment options, such as offering a product as payment, combining product and cash, and structuring performance-based options like affiliate marketing with influencers.
Paid partnerships with influencers
The amount of money you spend is entirely dependent on the type of your campaign and your financial constraints. Instagram influencers can earn anywhere from $10 to $100,000 each post, according to Influencer Marketing Hub. Their calculations are broken down by the number of followers an influencer has, with nano and micro-influencers receiving less than mega and macro influencers. This is good advice to keep in mind when determining how much to pay your influencers per article. However, there are a few other elements at play – Smartfluence’s influencer discovery platform has its own pricing algorithm to help you determine a true fair value for an influencer’s post rather than simply just looking at follower count and engagement rate.
Deciding on a flat fee
Brands can use a variety of performance metrics to determine how much to pay influencers. Every Instagram influencer profile on Smartfluence has a suggested price metric as well as a CPE (cost-per-engagement). You should use this as a starting point for your offer. You can also compare an influencer's paid post performance to their organic performance. These data points help to provide a more complete picture of the value they can bring to your brand and how much money you should spend.
If you're just getting started with influencer marketing, you might want to wait until you see tangible results before committing to a price. This could include charging based on the number of impressions, clicks, or conversions a campaign generates. Your campaign KPIs will aid you in determining which performance metrics will be used to calculate your monetary reward.
Revenue-sharing is exactly what it sounds like - marketers paying influencers a percentage of the campaign's total income. From the start, this strategy provides a significant incentive for influencers. Influencers will be able to earn more money than if they accepted a flat charge. It's also beneficial for marketers who want to avoid risk and increase ROI by compensating influencers based on the campaign's worth. As part of an influencer affiliate program, brands can provide revenue-sharing. Influencers would exchange affiliate links with their fans, allowing marketers to track sales and pay influencers appropriately. Keep in mind, you’re more likely to strike these deals with smaller influencers rather than larger ones who tend to demand at least some form of cash component.
A few things to note if you’re running a paid campaign:
• After establishing your high performers, try to build long term relationships with the influencers. If they’re on monthly retainers, you’ll save a bundle on your future collaborations.
• Feel free to combine paid relationships with product. For example, if an influencer charges $500 per post, try giving $200 in product and $300 in cash to balance it out.
• Stick to your budget. Our estimated prices are there for a reason. Just because an influencer is charging a premium to that price and is trending doesn’t necessarily mean they’ll get you the best results if you go too much over our suggestion.
Non-monetary compensation is another option for compensating influencers. For many firms, product seeding, or delivering free products to influencers in exchange for content, is an effective influencer payment strategy. It's ideal for small businesses who are just getting started with influencer marketing. This technique enables them to get their products into the hands of influencers and begin forming profitable collaborations.
A free sample or subscription, depending on the items or services you offer, may be enough to entice influencers to share content about your brand. If you don't have the finances to pay your influencers in cash or if you're launching a new product, sending them product samples may be the best approach to compensate them. Make sure you've done your homework and are offering their influencers things that are relevant to their content. Better yet, let them pick whatever things they want to try out, review, and promote to their audience.
For brands who sell high-ticket items, offering a product or service as money to influencers can work. A car manufacturer, for example, might offer a free automobile or a free one-year lease in exchange for a certain number of social media postings. Other high-end objects, such as watches or jewelry, can be used as payment without requiring a monetary exchange. This could be a wonderful approach to reward huge or famous influencers who would otherwise charge a large fee.
You can provide additional value to your influencers by providing a monthly or yearly supply of products, early access to a new product collection, or a discount for future purchases for smaller items.
VIP brand benefits
Brand ambassadors may benefit from this form of compensation. They already adore your brand and are naturally promoting it to their social circles. Exclusive advantages such as free products, event passes, goodie bags, early access to sales, and so on can be offered. This will effectively motivate influencers who are already familiar with and enthusiastic about your products. VIP perks can be used to reward brand loyalty and encourage brand ambassadors to share user-generated content about your company on social media.
Many influencers may find being linked with your business an appealing reward if your company is well-known in your sector. To make this work, you need to make an influencer feel important enough to represent your brand. When it comes to recruiting influencers to endorse your company without receiving a monetary reward, finding influencers who share your brand's beliefs, hobbies, and possibly aesthetics can offer greater results. (For example, AAA Bike Company selects ten influencers from the biking community to serve as ambassadors, receiving unique benefits in exchange for promoting the company to their followers.)
Some influencers may be enticed to work with brands or non-profits that promote a cause they care about, similar to how they may be enticed to work with brands that promote a cause they care about. If your organization decides to employ this technique, finding influencers that share your enthusiasm and awareness is crucial. (For example, Planned Parenthood contacts influencers who are enthusiastic about reproductive rights and asks them to promote a new campaign.)
A few things to note if you’re running an unpaid campaign:
• Unpaid campaigns work better in some industries than others. If you’re in beauty, fitness, travel, and fashion, you have better chances of striking a deal.
• Make sure to use influencers who have used products like yours in the past, or at least have displayed an affinity for similar brands and products. That way, you’ll ensure their passion comes through when they review your product.