The Nr.1 Reason Brands Fail With Influencer Marketing

Calculating the ROI based on how much the influencers sell in their first post without taking into account that the majority of the ROI comes from building long lasting relationships with performing influencers. ??

Your influencer program should consist of two central parts:

? Part1: Influencer testing: work with new influencers every month to identify the winners

? Part2: Seasonality campaigns: which you organise with your performing influencers

Part 2. is the driver of the majority of your revenue and ROI while part 1 is the engine which keeps increasing your revenue in part 2.

Brands often think they have to achieve a 4-5X ROI in part 1. You can achieve significant growth with an ROI. which is a lot lower in part 1. as long as you are increasing the number of performing influencers with which you are building long lasting relationships with (Part 2.).

The chart below visualises this

• The red line visualises the ROAS of part 1.
• The yellow line visualises the ROAS of part 2.

Forecasting revenue to plan your inventory and cash flow looks as following:

Part 1:

Lets say you work with 50 influencers / month and the average sale / influencer is 1.5. Inventory wise this means you need 125 units every month:

50 (for influencer gifting) + 50*1.5 (for customers) = 125 units.

Part 2:

You will have to additionally take the number of posts per influencer into account to forecast. E.g. let's say you have 200 performing influencers which sell on average 12 products / post and you will get each influencer to post 4 times during your campaign. Your forecast would be:

200 Influencers X 12 Conversions X 4 Posts = 9,600 units sold

If we assume an average order value of $130 the forecasted revenue achieved in:

Part 2 = $1.2M (9,600 X $130)

Part 1 = $16.3K (125 X $130)

This shows how important Part 2. of your influencer program is and its contribution to

your overall growth and revenue.

Main takeaway: your brand ambassadors / long term relationships with performing influencers drive the majority of your revenue and ROI.

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