Should small businesses hire influencers?

Influencer marketing is tempting every business owner. Since past few years big brands started keeping aside a portion of their marketing budget towards influencer marketing. Either brands or their designated PRs hire a bunch of influencers to promote the brand, pay them well, submit a report that campaign resulted in X number likes, Y number of impressions, Z number of views or things like that. Influencers are happy they got the money, PR agencies are happy they got their money, brand managers are happy they have spent marketing budget wise and have colourful reports to submit to senior management. Influencers often don't risk cheating big brands because of legal contracts and fear of not being invited again. Even if the campaign fails big companies can absorb the loss or they will find some scapegoat to hang.

As the popularity of tiktok, instagram etc grew, small and medium business owners also started taking interest in the platform, hoping to leverage these platforms to promote their products/services and increase their sales. However, unlike big brands, small and medium business owners had following limitations

 - Limited budgets, mostly hard earned money unlike a cash rich corporate budget

 - Unwillingness/no money to hire a full fledged agency to run the campaign, attempt to do it themselves

-  Less understanding of how the influencer platforms work 

- Unrealistic expectations and inability to absorb the loss if campaign fails

Influencers are also to blame partially- they often set unrealistic expectations to get the deal and fail to deliver. Last week I started following Sameul's instagram account (tip off-Karthik Murali). He is putting in public issues faced by small businesses from influencers. Several influencers took dress materials but never reviewed them, or claimed the dress is faulty after 4 months, or couldn't deliver a single sale, refused to refund and so on. You can watch the hour long videos on his account to understand in detail. There were few other attempts earlier where someone made attempt to highlight fake followers and unethical thing done by influencers- so influencers managed to gangup and get those accounts closed.

This prompted me to think about what is going wrong in influencer marketing and how small and medium business owners, entrepreneurs can protect their interests and reduce risk while spending money on influencer marketing.

What usually goes wrong in influencer marketing?

1. Bot followers won't buy. Many influencers have purchased followers to boost their numbers and look good. These bots or fake followers are not going to buy anything.

2. People follow for different reasons. Some people follow you because you are following them. Many guys follow girls just to drool at their photos. Many others might have created an account and followed someone but are hardly active on the platform and so on. These people are very unlikely to care about some product promotion by an influencer and may never buy anything.

3. Very less attention span. Most posts on Instagram or twitter have very little attention span. Within minutes they vanish among millions of new contents posted every second. So unless your post grabs the right eyes at the right time, it may not be of much use.

4. Platforms have their own rules and logic. Instagram would rather have you a business account and promote your content via ads, than pay an influencer. Instagram algorithms decide which content should be shown more prominently for how long and to whom.

Let us say an influencer has 1 lakh followers. Maybe 50000 are fake followers (just assuming, it could be 90% also), maybe 30000 fall into category 2 above. Of the remaining 20000, maybe just about 2000 people have the financial ability and interest to buy your product. Out of these 2000, maybe 200 people notice the post just in time, 30-50 of them may inquire further and if 5 people actually buy, it is a great achievement. 

Tips for entrepreneurs or small business owners before spending money on influencer marketing

- Don't jump directly into hiring some influencer. Spend some time to understand how the ecosystem works. Instagram, Youtube, twitter, blog, facebook etc have their own audience groups. You have to check what kind of platform and campaign is best suited for your business. A dress shop might use instagram more to show photos of their collection, a car accessories company may use youtube better to explain how various accessories work or look when installed on cars, for some edutech company twitter or linkedin might be better to reach parents, for a resort blog posts may get better visibility in google.

- Before paying, spend some time checking the influencer accounts- are the contents genuine? Are they interesting and adding value? How are the comments and engagement? Would you trust them if they recommend a product?

- If you have a friend well versed with social media and influencer marketing, ask him/her to help identify the influencers, define a strategy and set some realistic expectations from the money you are spending on influencers.

- While paying an influencer maybe avoid approaching the most expensive ones for whom you may have to break your bank. Hire more affordable ones, experiment and understand. Then expand to more people.

- Have some formal emails exchanged detailing timelines, deliverables, expected results etc, to avoid any misunderstanding or fights later.

- Have a staggered payment plan- instead of paying everything upfront, may be an advance and a monthly payment or something like that.

- See you can have social media accounts and start building a follower base on your own. Might be slow and steady but might just work.

How much to spend on influencers?

Influencers come in all kind of rate cards. From barter deals to those charging lakhs. Everyone is on their own- there are no fixed rate cards or governing agencies. Many have taken it full time and make a living out of it while others work part time. Some would have been faking things with bought followers and other tricks of the trade. Thus, my high level guidelines would be as below:

- Never break your bank to fund an influencer campaign. Spend a smaller amount, work with few influencers you find affordable and reasonable, learn and then extend your plan.

- Pay attention to quality of content, originality, quality of follower engagement

- Influencer campaign can't guarantee sales and positive revenue within short span. It will create some awareness and goodwill about your product/service and will take time to convert into actual sales. So keep your expectations right and spend wisely.

Tips to influencers while engaging with small businesses

- First help them understand what you can do and what you can't promise (for example you can put promotional posts but can't guarantee 10 of your followers will actually buy the product you are recommending)

- Commit a realistic timeline and honor it.

- Avoid malpractices like buying followers

- Say no upfront if you don't want to promote for whatever reason. But after taking money or product your mind changes, be kind to return the money and or product.

- Follow basic dignity and ethics- don't go begging for free stuff, don't try to cheat. It will backfire sooner or later.

- Always have a secondary source of income so that you can sustain even if there's no money from influencer campaigns and you are not forced to cheat or mislead anyone just to make money.

Do share your thoughts