Posted by Consumer voices will always be more authentic than brand voices.
Are you more likely to trust the recommendations of your friends or family? Or are you more likely to trust sponsored ads and posts?
To state the obvious, we follow the recommendations of people within our network. After all, they’re the ones we trust the most.
This is word-of-mouth marketing in a nutshell.
Word-of-mouth marketing involves using customers to promote your product through referral programs. It has the potential to be more successful than sponsored ads because people will trust referrals from their own network.
If you’re in doubt about this marketing strategy, here are a few facts that prove why it works.
Why Word-Of-Mouth Marketing Works?
ReferralCandy reports that 86% of consumers believe that word-of-mouth is the most trusted form of marketing. Before making a purchase, 90% of consumers will seek out reviews and feedback from real people.
Consumers regularly talk about the brands and businesses that they love. That is why 59% of consumers talk about new products which contribute to over 3.3 billion brand mentions in America per day.
When was the last time that you asked for a restaurant recommendation? Have you talked to your friends and family about their experiences before making a purchase?
Not surprisingly, we seek recommendations from real people who have experienced the brand’s services and offerings.
This is where influencers enter the picture. We rely on them to determine the products that we buy. We look at their Instagram feeds and Youtube channels to discover brands.
There are different types of influencers such as mega influencers, micro-influencers among many others. What are the differences between these different types? Here’s what you need to know:
Mega Influencers (>1M followers)
Mega influencers have the largest fanbase.
You hear their name often in their chosen industries, and you may even know them. They usually have millions of followers across the globe and charge a premium for sponsored posts on Instagram.
Felix Arvid Ulf Kjellberg, otherwise known as PewDiePie, is a Youtuber and gamer that posts “Let’s Play” videos. His channel has more than 90.1 million subscribers and 20 billion video views. Thanks to his massive fanbase, Social Media Today reports that he earns $70,800 per sponsored Instagram post.
Huda Kattan is another mega influencer in the beauty industry. She has 40 million followers and a Huda Beauty store which sells beauty and skincare products. Her rate is $91,300 per sponsored post.
Hiring a MEGA influencer can cost as much as a celebrity endorsement. Since they’ve built a massive fanbase, they will charge more for the publicity.
Macro (100,000 to 1 million followers)
Macro influencers are minor celebrities or public figures.
They have likely obtained fame through blogging, social media content, and vlogs.
A micro-influencer stands between micro- and mega-influencers. They don’t have millions of followers, but they have built a large fanbase in a specific niche.
For example, Andrea Chong – a Singaporean beauty and lifestyle vlogger – has more than 300K+ followers. Some of her posts are sponsored by big beauty brands like Lancome, La Mer, and Loewe.
You may not have a $50,000+ per post budget for a mega influencer. So, businesses can opt for the services of macro-influencers instead. While they’re more affordable than mega influencers, their services don’t come cheap.
They likely have an agency that handles their social media promotions which contributes to their hefty bill. They may even charge between $1,000 to $10,000 for one post.
Micro (10,000 to 100,000 followers)
Micro-influencers are well-known in their niche or industry.
They specialize in a specific niche where it’s hard to gain fame. Some examples include cybersecurity, marketing, parenting. They could be CEOs, thought leaders or moms that advertise personal finance or saving.
Joseph Steinberg has 79.1K Twitter followers thanks to his expertise in blockchain, cybersecurity, and technology. As an industry thought leader and influencer, he has amassed a huge following for contributing articles to prominent publications like Forbes and Inc.
Micro-influencers may be more appealing because they seem more trustworthy. After all, recognized thought leaders won’t promote brands that are unreliable. They value the trust of their audience which allows them to create an engaged and loyal fanbase.
Hiring a micro-influencer is a lot cheaper than opting for a macro or mega-influencer.
They usually rely on a conventional ‘affiliate marketing’ program to earn money. Businesses pay them a commission based on the number of sales that they generate through referrals.
Never underestimate micro-influencers. Although they have a smaller fanbase, their praise can help your business rack up sales.
Nano Influencers (<10,000 followers)
Nano influencers are the people that influence you every day like your friends and family.
They have less than 10,000 followers and may never be sponsored by a brand. While they don’t have a huge fanbase, they can be very powerful.
Their followers know them personally so their opinions can be very influential. They post their authentic real-life experiences in social media profiles or personal blogs.
The con to opting for nano influencers is obviously their small fanbase.
A good tip is to leverage them for referral marketing campaigns to gain more customers for small businesses and startups. There’s no need to pay a huge amount of money for nano influencers. Some businesses reward them $5 for every successful referral that they make.
Nano influencers are the future of marketing
Nano influencers are the people that you encounter every day.
Everyone can promote a product through word-of-mouth. They can communicate to their network through their social media, podcasts or blogs. They will likely promote the products that they love with their friends and family.
How can they be influential? Here are some examples of successful word-of-mouth campaigns:
Riff-Raff
Riff-Raff tapped into the tight-knit community of moms.
Their strategy involves encouraging customers to promote to other moms in their network. In exchange, customers earn free toys for five successful referrals. The free merch encouraged moms to share the brand on Facebook groups and people within their network.
“A lot of mums in my mum’s group are raving about the Riff Raff baby sleeping toy at the moment,” said a mother interviewed by Kidspot.
Thanks to their referral marketing strategy, 35% of Riff-Raff’s sales are based on referrals. The small business is worth a million dollars with 50,000 happy mothers (and babies!) who love their products.
Undress
Undress is a product that lets users undress without ever getting naked. The project raised more than $615,000 from 7,200+ backers on Kickstarter which proves the power of word-of-mouth.
The founders targeted triathletes and yoga practitioners because they often struggle to change out of their gym clothes into their workout clothes. We bet they opt to change inside unsanitary restrooms or cars. They may even desperately cling to their towels while trying to change their clothes.
By targeting this niche group, they used the Sinatra test from Made To Stick. Customers thought that since professionals promoted the product, then it works for everyday people.
Thanks to the founders’ foresight, the product has been featured in several runners’ blogs which allowed them to reach out to a wider audience.
You can find more successful referral programs spearheaded by nano-influencers spread through this list of 79 Referral Program Examples from ReferralCandy.
Which Influencers Should You Work With?
Let’s recap the four main types of influencers:
- Mega influencers – more than 1 million followers
- Macro Influencers – from 100,000 to 1 million followers
- Micro-influencers – from 10,000 to 100,000 followers
- Nano influencers – less than 10,000 followers
Mega and micro-influencers have created a huge fanbase which definitely guarantees more exposure for your brand. The downside is that you’ll have to pay a huge amount of money to agencies to create one Instagram post.
Micro-influencers have gained a modest following in specialized niches. They’re perceived to be trustworthy thought leaders in the industry. You also pay them commissions based on the number of sales that they generate through referrals.
These influencers have built a large fanbase, but nano-influencers are the future of marketing. While social media influencers can create stunning sponsored posts, people are more likely to believe friends and family that they know personally.
Nano influencers are the ideal customers that brands should target. You can incentive this group to share your brand with their network by providing a free product in exchange for a few successful referrals. You can even give them a small discount for every successful referral they make.
What are the types of influencers that you want to target? Are you planning on launching a referral program? Let us know in the comments below.
Monique Danao is a writer for ReferralCandy and CandyBar.
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