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/ 2.21.2022 / Retail Tips and Tricks

Influencer marketing existed well before social media. Early examples include Roman gladiators endorsing products and Wedgewood China cementing its luxury status by making a tea set for the Queen of England and marketing its products as having “royal” approval. But the Internet and social media took influencer marketing to new heights – and proved their power to increase awareness and drive sales. 

Today, influencer marketing is a viable, mainstream marketing strategy for retailers of all sizes and types. If you’re exploring influencer marketing for your retail business, here are 10 key things you need to know. 

1. What is influencer marketing? 

Influencer marketing leverages social media to share endorsements by trusted individuals (aka influencers) with engaged social followers on platforms like Instagram, Facebook, YouTube, and TikTok. Influencers range from celebrities with mega followings in the millions (think anyone named Kardashian) and macro-influencers like prominent bloggers and podcasters with 100,000+ followers through smaller players known as micro-influencers (between 1,000 and 100,000 followers) and nano-influencers (under 1,000 followers).

2. Understand the ROI.

In a lot of ways, influencer marketing takes old-fashioned word-of-mouth that used to be passed customer-to-customer and amplifies it to a much broader, but still targeted audience. For retailers, the main appeal is access to an expanded reach that doesn’t require a big budget. Overall, for every $1 invested in influencer marketing, businesses generate $6.50 in revenue on average. However, 13 percent of businesses generate $20 or more for every dollar they invest. And, perhaps even more importantly, 51 percent of businesses using influencer marketing report the strategy brings in higher-value customers. 

3. Know your audience. 

Having a deep understanding of who you’re targeting is the single best way to optimize the return on an influencer marketing investment. Create ideal customer personas that include demographic information like age range, life stage, and income. Then, add psychographic attributes like pain points or challenges, hobbies, and attitudes. For influencer marketing campaigns, the psychographic persona must include a deep understanding of your target customer’s attitudes about social media and preferred social platforms. Tap into the wealth of data within your point-of-sale (POS) system to round out your ideal customer profiles with information, such as purchase habits, product preferences, and average transaction value.

Related: How Smart Retailers Build Ideal Customer Profiles that Drive Sales

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4. Be social. 

Effective influencer marketing starts by having an established and active presence on social media yourself. Regular posts on the social media platforms where your customers engage create a solid foundation for influencer marketing. Take a strategic approach by mixing in posts about products, promotions, and customers – and show your personality. It’s always a good idea to create a hashtag for your store and include it in every post. With consistent use over time, you may find customers will pick up your hashtag and use it in their posts. 

5. Define what you want – and what you want to spend. 

Create and execute a plan for your influencer marketing. Set realistic objectives, map out a campaign, and set a budget. Before you can develop these things, a little homework is required. Once you have your ideal customer profile (see #3), it’s time to survey the relevant influencer landscape. 

For small and mid-size retailers, it’s best to start by engaging nano and micro-influencers aligned with your target customer’s interests and your brand. Nano-influencers (with 1,000 or fewer followers) can be highly effective within a community – and you may already have one or two within your customer base. Micro-influencers (with 1,000 to 10,000 followers) typically have a defined niche they focus on – such as fashion or crafts. They also have highly engaged followers. When comparing potential influencers, don’t just go by the number of followers. Calculate their engagement rates by adding up the number of likes and comments on a post, dividing that number by the number of followers. Then, multiply by 100 to get a percentage. 

When it comes to budget, consider the amount you’ll pay to the influencer as well as the time you and your team will invest in managing and promoting the campaign. The budget for influencer payments will vary based on the social media platform, number of followers, engagement rates, and what you’re asking the influencer to do (see #8). Here are some budget benchmarks for Instagram, YouTube, and Facebook. And keep in mind that influencer compensation can also include products or discounts.

6. Learn the FTC guidelines. 

The Federal Trade Commission (FTC) regulates advertising practices, including influencer marketing. The biggest requirement is influencers must disclose their relationship with the company they’re endorsing. In other words, if you’re compensating the influencer in any way, it must be disclosed in the post. Even if they’re not being paid, influencers need to disclose if they have an employment, personal, or family relationship with a company they’re posting about. In addition to disclosures, influencers cannot talk about a product they have not tried, and they can’t make claims about a product that can’t be backed up.

7. Prioritize content. 

Today’s customers are savvy – and they tune out overly sales-focused content on social media. The best influencer marketing involves the influencer telling a personal story about their experience with your store or its products. The story – whether a written post or video – should be authentic and believable. The commerce element – such as an exclusive discount offered by the influencer or an affiliate link to your e-commerce site should be secondary. In some cases, a simple post by an influencer talking about an experience with a geo-locator for your store and no other sales message can be effective.

8. Get creative.

Influencer marketing isn’t just about posts. Brainstorm with your team and the influencer about how you can engage their followers. Create virtual or in-person events featuring the influencer and offer attendees an exclusive discount. Have the influencer offer advance looks at new items. Or invite the influencer to curate a subscription box of favorite products as an offer she can promote to followers. The best POS systems make managing events, recurring orders, and subscriptions easy with automation, reports, and customer profile tools. 

Related: 5 POS Promotions that Boost Retail Sales

9. Turn customers into influencers.

Your existing customers are your best advocates. Turning them into social media influencers can be a cost-effective way to implement an influencer strategy. Although most customers won’t have significant numbers of followers, getting multiple customers to create and share “user-generated content” about your store, products, and services increases the reach. Plus, your best customers likely fit your ideal customer profile – and have a social media community that does, too! The first step is making sharing easy by featuring social share buttons on your website and in customer emails. Then, encourage customers to post by creating a challenge with a dedicated hashtag. Reward the posts that get the most likes or shares with a gift or discount. And make sure to engage with your customer’s posts by liking and sharing them from your store’s account. 

10. Track and measure. 

When launching an influencer marketing strategy, create and track key metrics from the beginning. Identify metrics that will help you evaluate the return on your investment and determine how much you spend. Measurements like views and likes are good indicators, but what you really want to see is increased sales. Use trackable discount codes and customized links to your e-commerce site to help you tie sales revenue back to the influencer’s content. 

Done well, influencer marketing is much more than random posts on social media. It can be a powerful, affordable marketing strategy to help retailers reach and engage potential customers. POSIM, an integrated point-of-sale, and inventory management system, includes functionality to help retailers optimize customer data, track sales results, and even manage influencer events and promotions. Discover which POSIM plan is right for your business and ask us for a demo today.

Caleb Shook

Inbound Marketing Manager

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10 things retailers need to know about influencer marketing

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