Influencer affiliate marketing is transforming the landscape of digital retail, with US retail social commerce sales projected to grow from $27 billion in 2020 to $79.6 billion by 2025. According to McKinsey & Company, this growth will see social commerce's share of total retail e-commerce sales rise from 3.4% to 5.2%. The global social commerce market is expected to grow over $2 trillion in size by 2025. This guide will provide brands with essential strategies to harness the power of influencer affiliate marketing, enabling them to thrive in this rapidly expanding market.
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Influencer affiliate marketing is a strategy where brands partner with influencers who promote their products or services to their followers. In this arrangement, influencers share unique affiliate links or codes, earning a commission for each sale generated through their promotions. This method leverages the influencer's credibility and reach to drive targeted traffic and sales, making it a cost-effective way for brands to expand their market presence and achieve higher conversion rates through trusted recommendations.
Influencer affiliate marketing combines the power of influencer endorsements with the performance-based model of affiliate marketing. This approach offers unique advantages that can drive substantial growth for brands.
By incentivizing influencers to promote products through affiliate links, brands can boost sales and track the direct impact of each influencer.
Brands only pay for actual sales generated through affiliate links, ensuring a cost-effective marketing strategy with a clear ROI.
Influencers often have niche audiences, allowing brands to reach specific demographics and market segments more effectively.
Followers trust influencer recommendations, which can lead to higher conversion rates compared to traditional advertising.
Brands can easily scale their affiliate programs by partnering with multiple influencers, expanding their reach without significant upfront costs.
Influencers create engaging content around the brand’s products, providing authentic promotion that resonates with their audience.
By working with a performance based compensation model for influencers and publishers brands shift the downside from them to the influencer. If the influencer isn’t able to sell the cost is minimal, reducing pressure on ROI.
The most valuable asset of a performance based influencer program is your data. By knowing which of the influencers you work with generate the most sales you can strategically shift your resources and attention towards the relationships which generate the most sales allowing brands to maximise ROI.
In essence there are two types of influencer affiliate marketing platform:
1). Inbound matching platforms
2). Outbound tools to build your affiliate program.
Influencer affiliate matching platforms are companies which bring brands and influencers together through a centralised platform. Amazon associates is the biggest platform with 47.3% of the affiliate market share in the US. Below are some of the biggest other influencer affiliate matching platforms ranked by market share.
To build an effective influencer affiliate program you don’t always need to rely on these affiliate matching platforms. One of the drawbacks of these matching platforms is that it often takes a lot of time to scale as you are waiting for influencers to join your program. This is why successful brands take the initiative to directly contact influencers using outbound tools.
Below are some of the biggest outbound tools for building your influencer affiliate marketing program:
These platforms provide the tools needed to identify influencers, contact them and create custom affiliate links and codes to track sales and clicks. By leveraging these tools you can actively build your influencer affiliate marketing program instead of waiting for influencers to apply on a matching platform.
There are two ways to track conversions for influencer affiliate marketing:
Affiliate links are unique URLs provided to influencers to promote a brand's products. When an influencer shares these links, and a follower clicks on them, a tracking cookie is placed in the follower's browser. This cookie tracks their activity and records any purchases made.
Another way to track conversions is by providing each influencer with their own unique discount code. Everytime their code is being used it is attributed to the influencer through which the influencer will earn a commission.
Building an effective influencer affiliate marketing program takes a lot of work but the payoff is significant. Most household names such as Gymshark, Lululemon or Daniel Wellington all leveraged influencers to become the brands they are today. Let's take a look at how you can replicate their success by building an effective influencer affiliate marketing program.
To understand how to build a performance driven influencer affiliate marketing program you need to understand the underlying unit economics.
Based on the data we have analyzed of over 40K commercial influencer partnerships we were able to conclude that across all industries the performance typically comes from a smaller group of influencers.
Typically around 5 -10% of influencers our clients work with generate over 80% of the sales.
The problem: you don’t know in advance which influencers will perform and which won’t. This is why we typically recommend to keep your cost low at the early stages and “test influencers” first.
Affiliate marketing is the perfect solution for this as you are able to hedge your downside while being able to offer compensation to the influencers you are trying to partner with. Besides the affiliate commission you also want to offer a free product. Make sure to make the product gifting attractive to avoid or minimise fixed payments.
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Once the first influencers have completed their post analyse the data which you tracked using affiliate links and discount codes. Once you identify your top performing influencers make sure to invest in these relationships in order to maximise ROI. These are the influencers which generate the most sales.
By combining affiliate as well as fixed payments with your performing influencers you can maximise ROI. You can read in detail how to maximise ROI with performing influencers here.
A successful influencer affiliate marketing program consists of different parts. Below are the most important elements for building an effective influencer affiliate marketing program.
The first step of every influencer program is to identify the right influencers. Needless to say you should select an influencer which matches your brand. Although this might sound obvious it can be time intensive and tedious to manually identify influencers which is why we recommend using an influencer finder tool.
With Influencer Hero for example you can filter influencers based on location, audience demographics such as age, gender, ethnicity and much more. To filter based on content you can use the lookalike filter to quickly find similar influencers.
Read our full research study where our data scientists analyzed over 10K commercial influencer posts to determine the correlation between influencer metrics and conversion here.
Influencer outreach is crucial for building a successful influencer affiliate marketing program. Especially for influencer affiliate marketing, automating your reach out is crucial as you typically need to reach out to more influencers in order to get them to agree to an affiliate & gifting campaign instead of working with fixed payments.
With Influencer Hero, each influencer receives a hyper-personalized message, including an AI-generated sentence. The AI analyzes the last three social media posts to draft a personalized message, maximizing reply rates. Additionally, our tool offers drip campaigns, automating email sending and follow-ups.
When trying to get influencers to agree to an affiliate & gifting campaign it is crucial to negotiate. A typical outreach funnel for brands using Influencer Hero looks as following:
These are funnel statistics if you follow our A/B tested negotiation sequences to maximise your onboarding rate. The golden rule when negotiating with influencers is never give up.
We have countless examples where influencers first ask for $1000 or more and after 2-3 negotiation emails agree to an initial post in exchange for an affiliate commission + free product.
One initial post is all we want as you simply want to test if the influencer is able to sell. If they aren’t able to sell anything in their initial trial post chances are they probably won’t sell much in other posts.
Use our A/B tested negotiation template below in order to maximise your onboarding rate.
Hi {{firstname}},
Thank you for your reply.
We completely understand that you don’t work on an affiliate basis. However, we hope you understand that the first story post is only to get a better understanding of the match towards the brand.
We work with a wide variety of different compensation packages which include fixed payments and long-term brand ambassador programs. We have been collaborating with creators for a few years now and from our experience, we know that the performance varies widely which is why we work with an initial story post in order for us to make a fair offer.
Based on the results of this initial post we would be making you an offer that includes one or a combination of the before mentioned packages.
[IF INITIAL OFFER IS INCREASED]
Usually, we only send out the ENTER INITIAL PRODUCT OFFERED, however, because we value your work and accommodation, we'd love to offer ENTER UPDATED OFFER. Please let me know if I can send you the ENTER UPDATED PRODUCT OFFER.
Looking forward to hearing from you
Best,
ENTER YOUR NAME
To access all our free A/B tested influencer outreach templates click here.
During the entire process and especially once you onboard influencers to your influencer affiliate marketing program it is essential to use the right tools to effectively manage your campaign. Influencer relationship management platforms or influencer CRMs are often suited to manage these campaigns.
With Influencer Hero we use structured trello-like boards where each influencer has his or her own deal page from which you can create affiliate links, discount codes and manage the communication.
One important factor every influencer marketer should keep in mind is that even when using affiliate links and discount codes attribution isn’t 100%.
Based on several international expansion campaigns where we set up brand new Shopify stores with influencer marketing as the only marketing channel, we consistently saw that the average attribution rate when using affiliate links and discount codes with influencers is around 70%.
That being said to accurately forecast actual sales divide your tracked sales by 70%. E.g. lets say an influencer generated $600 in sales. To calculate the actual sales divide this number by 70%.
Actual sales = $600 / 70% = $857
US retail social commerce sales are expected to grow from $27 billion in 2020 to $79.6 billion by 2025, increasing their share of total retail e-commerce sales from 3.4% to 5.2%.
In 2021, goods and services purchased through social-commerce channels in China reached $352 billion, or 13% of total e-commerce, showcasing the potential for growth in other markets.
A two-hour live shopping event on TikTok can generate more sales than a week’s worth at a flagship store, illustrating the power of live-stream shopping.
A 2021 retail survey by Forrester found that 61% of online adults under 25 in the US had completed a purchase on a social and creator platform without leaving the app.
Nike’s engaging content featuring star athletes has helped it build a social media following of 234 million, contributing to 18% annual revenue growth in its digital business.
Influencer affiliate marketing offers brands a dynamic way to engage with their audience and drive sales, leveraging the trusted relationships influencers have with their followers. With US retail social commerce sales projected to grow significantly, adopting these strategies can position brands for substantial growth. By understanding the benefits and effectively implementing an influencer affiliate marketing program, brands can maximize ROI and stay competitive in the evolving digital marketplace. This guide equips you with the knowledge to harness the power of influencer affiliate marketing for long-term success.
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