The 3 primary use cases for referral marketing are user-based referral marketing, reseller & product integration, and the traditional affiliate model.
How to Partner with Influencers... and Meaningfully Measure ROI
How to go beyond #sponsoredcontent posts and build mutually-beneficial partnerships with influencers that's focused on substance, not style.
Right now, influencer marketing is at a crossroads. Many marketing directors are putting their foot down: it is too risky to include influencers in our marketing budget. This is, to some degree, fair: the current iteration of how most brands work with influencers–paying a flat fee based on the influencer’s number of followers, betting on the hope that this influencer’s followers will pay attention and be moved to make a purchase, after seeing a #sponsoredcontent post–is one of the most speculative marketing investments out there.
In 10 years, we may look back at the first iteration of influencer marketing as having been the wild, wild west. Influencers would send over a media kit with their number of followers, their average number of views per story on Instagram, and the average number of engagements per post or per story, and brands would send them a check for a lump sum. While the majority of influencers are well-intentioned and sincere in their desire to create a win-win relationship with the brands who want to reach their followers… the structure of the business arrangement does have “gold rush” implications. In what other arena of business spending do we pay for a product or service, not knowing that we’ll actually receive the outcome we’re hoping for?
This doesn’t mean that influencer marketing should be abolished or abandoned, though. Rather, the influencer marketing space is gearing up for an inflection point: influencers need brands, and brands need influencers, but brands cannot pay influencers up front for conversions that may never come to fruition. Referral marketing software like Ambassador Software presents a solution to this challenge: influencers can count on a meaningful revenue stream from brand partnerships and brands pay based on the volume of business any given influencer sends their way.
When you use a referral marketing platform like Ambassador, you reverse-engineer the equation for how influencers are paid out for their work. Influencers are paid when their followers complete purchases. There are benefits to this compensation structure for all involved. This arrangement gives influencers extra incentive to select partnerships that will get their audiences excited and have motivation to infuse an added layer of thoughtfulness into their posts about why the product or service they are promoting is so special. Influencers have the opportunity to increase their earnings by selecting well-aligned brand partners. Meanwhile, brands can finance their influencer marketing partnerships using revenue influencers have sent their way. It’s a win-win.
Consider these easy steps to integrating your influencer partnerships and referral marketing strategy, creating success for all involved.
1) Acknowledge the influencer’s value up front… without paying up front.
Some influencers bristle at an affiliate sales or pay-per-download agreement with their brand partners… but you can explain the value of a referral marketing approach from your first touchpoint with a prospective influencer partner. When you perform outreach to influencers, it’s likely you’ll initiate that relationship with a brief written pitch via email. In that pitch, you can acknowledge that you recognize the value in the content they produce and the labor they have dedicated to cultivating their audience… even if your influencer contract will specify that the metric of a successful partnership is measurable conversions.
2) Convey the benefit of referral marketing data to your influencer partners.
As you affirm for your influencer marketing partners that you appreciate all the work that has gone into building their audience, you can deliberately specify that using referral marketing software to manage their earnings helps them, too. Influencers benefit from the data you gather in the Ambassador dashboard. Influencers can gain insight into which brand partnerships are most aligned with the interests and spending habits of their followers. Most brands don’t share that detailed data with their influencer partners after a campaign. Influencers can develop a speciality in their brand partnerships and deliberately pursue brand relationships based on the product categories where they deliver the highest returns!
3) Crunch the numbers to see which influencers are driving the most sales.
Ambassador clients have the opportunity to look at their referral marketing dashboard and understand which influencer collaborations have yielded the most sales. Ambassador clients can assign a member of their marketing team to having one-on-one conversations with high-performing influencers. Dedicating effort to those relationships ensures that influencers feel good about ongoing partnerships with your brand… and keep sending business your way.
4) Do more of what’s already working.
Nurturing a relationship with your highest-performing influencers also provides the opportunity for knowledge downloads. You can assess what specifically is working in your most profitable collaborations, and whether there are best practices that can be drawn from your most successful influencer partnerships to share with other influencers in your referral marketing program.
5) Make payouts that feel good for everyone involved.
The beauty of referral marketing is that you pay for results, and only after having received them. Your influencers can feel a high level of pride in their campaign payouts, knowing that their fee is an indication of how much value they created for your brand and that their sponsorship decisions are truly rooted in the interests and purchasing behavior of their audience members.
Influencer marketing taps into one of the most fundamental marketing principles: people make purchasing decisions based on recommendations from people they know, like, and admire. There have been brands who have seen extraordinarily positive results from first generation influencer marketing campaigns… but the practice of flat fee #sponcon cannot endure. Pairing influencer partnerships with referral marketing is the next iteration of influencer marketing that will make influencer marketing sustainable, and yield lasting dividends for all involved.