This question keeps popping up again and again, how much should you really pay influencers for posting about your brand?
I’m here to tell you that if you’re asking that question, you’re thinking about your influencer marketing program in the wrong way. Let me explain…
If you’re thinking about doing pay-per-post campaigns with influencers, don’t.
This transactional sentiment reflects in the kind of content they create and the way your brand is spoken about. Their audience can sense that they’re working with you simply because you paid them $$$.
Do not approach influencers by quoting what you think is a fair price, or asking them for a price to post, without first sending them free products or getting their thoughts on your brand at the very least.
Never send a creative brief or ask if they will promote you in the first email to them. It’s called “leading with an ask” and it’s not the best thing to do.
With that out of the way, let’s talk numbers. Every platform brings a different value to your business. So there is a way to calculate a fair fee to pay influencers on each platform.
For every placement,
– Pay $100 for every 10,000 followers on Instagram.
– Pay $150-$200 for every 10,000 subscribers on Youtube.
– Pay $75 for every 10,000 fans on TikTok.
These rules should suffice if you’re making ballpark calculations. But there are more things you should take into account.
If you’ve done all the good things to ensure that there’s alignment between your brand and the influencer’s overall message, take the following into account when calculating a fair price.
You’ll need this number to apply the thumb rule I mentioned and find a base estimate. The thumb rule gives you a base rate to work with, which depends on the platform. But the fair fee for every creator can vary based on other factors.
To get the base estimate, divide the follower count by 10,000 and multiply the number by $100.
If they have an above average engagement rate (usually that means higher than 2%), they will charge you more. They have a highly engaged audience which warrants a higher fee to reach.
To keep things simple, multiply their engagement rate by $50 and add it to the base estimate.
You want to work with creators who are on an upward growth trajectory. Take their growth rate from the Saral Chrome extension and multiply it by $10. Add that number to the base estimate.
You need to verify the frequency with which they post and also identify what percentage of their posts are sponsor posts. Take the % sponsor posts, multiply it by $10 and subtract that amount from your number.
The more sponsor posts they do, the higher is the chance that their audience is just their for deals or they’re bored of that creator doing too many paid promotions.
Fair fee formula
You know your goals best. For example, if your goal is reach and awareness, you should weigh the follower count more than engagement rate. If your goal is to get conversions, weigh the engagement rate and growth trajectory more. This formula is not law, feel free to change it based on your priorities.
Fundamentally this boils down to buying eyeballs to get your brand in front of. You need to know what your ideal customer acquisition cost is and calculate back from there.
If your AOV is $200, your ideal CAC would be around $60. You’re willing to spend $60 per customer, and the conversion rate on your website is 10%, you need to drive 10 people on your website for $60.
You can ballpark your eyeball-to-site-visitor conversion rate for every creator and find out how much you’re willing to pay for a post or story. For example, if their engagement rate is 3%…
Which means for every 10,000 followers the influencer has, we’ll get (roughly) 300 likes & comments. Let’s assume 5% of those care enough to click the link and visit our landing page.
We are willing to spend a maximum of $60 for 10 people, so we’ll be willing to do $90 for every 10,000 followers this creator has.
You should do this calculation with numbers from your own business and arrive at the right amount to pay influencers so you’re always profitable with your campaigns.
I recommend using Saral’s chrome extension, it’s the simplest.
I mean, you’re on our blog. Might as well try the tool 🙂
Here are some other tools you can use, if you wanna explore:
If there’s one thing you take away from this post, do the fair price calculation for your business. This will help you make profitable decisions in the future.
In summary, don’t seek to pay influencers upfront from the get-go without doing your research and making sure they want to promote your product.
Use the thumb rule for quick ballpark estimates and keep the other factors in mind when it comes to calculating fair price. And never forget the first principles, it’s all about cost per eyeball and eyeball to sale conversion rate.