Is your Influencer Strategy a Cost Center or a Revenue Generator?

Malcolm DeLeoMalcolm DeLeo

Business Development & Strategy

December 10, 2020

Influencer content = cost center; Your consumers content = revenue generator

While living through one of the most unpredictable and rapidly evolving business markets in the last 20 years, marketers’ responsibility is still to deliver the best bottom line ROI from their marketing investments. Moreover, the COVID economy requires doing more with fewer resources. This begs the question; how can I bring my consumers into the heart of my brand’s journey to create the greatest marketing efficiencies and drive my bottom line?

One response is to hire social influencers to make the case for brand excellence to the digital masses. The formula was simple; find influencers with the biggest audiences and get the most eyeballs for your money. But there are influencer marketing costs and influencer challenges in proving back any ROI. Using influencers relies on the premise that the money spent to activate them will yield a rate of return that exceeds their cost, but their value has diminished over time and it has become a cost center.

Why is an influencer program a cost center?

Think about this; even for a modest mid-tier influencer who has between 50,000-500,000 followers on Instagram, an influencer rate card price could run you $500-$5,000 per post; and this is just on one platform! With this instagram marketing pricing in mind it means even for a small campaign with an influencer who has 100,000 followers and commits to just 10 posts, you could pay $10,000. To be cost-effective, that $10,000 must yield more than $10,000 in profit, not merely sales. If, say, you’re selling t-shirts for $10 each and your profit is $5 per t-shirt, you’d have to sell an additional 2,000 t-shirts from the outlay just to break even. Note: all cost estimates sourced from

To make matters worse, most consumers know that influencers are paid to advertise on your behalf. So, while you may have gotten gains in the past, the consumers are more savvy than before. This means that your modest influencer program requires upfront investment to activate a person who is essentially a hired gun for what is often considered inauthentic marketing by the very consumers you hope to influence.

What approach works best now?

Younger audiences spend less time than their millennial predecessors paying attention to company-sponsored content. Worse, they believe it less.

Where they do spend their time, and what they do tend to believe, is what others like themselves are saying. Therefore, the most cost-effective marketing approach is to harness what your very satisfied consumers are telling others. It’s called User Generated Content (UGC).

Simply put; if you can find real consumers of your product who like it so much that they are willing and even eager to tell others, your challenge is to organize, incentivize, and incorporate their willing word-of-mouth promotions into your marketing program. Maybe even build a marketing program around them.

How do creators help you generate revenue?

UGC creator communities can help a brand create revenue in several ways. The most obvious is by creating a marketing campaign that enables you to acquire credible marketing content from users and then use that content in your social media campaigns, your in-store advertising or even in your media content. By a conservative estimate, EnTribe has aligned with its customers to identify that a single piece of UGC is worth $250 for content used in social media, $1,000-$5,000 when used for in-store advertising and $10,000+ in media. And those returns from UGC can be as inexpensive as simply coupon rewards redeemable for your products. That pays off in two ways. Not only does it guide new buyers to your product with authentic content, it also drives purchases through the redeemed coupon.

How can you rationalize this concept?

Say your brand has 100,000 Instagram followers. If a minimum 0.5% of your followers like your brand so much that they would be willing to promote it, you would potentially have 500 creators to provide your brand with authentic UGC.

If of the 500 creators each created 3 pieces of UGC per year that each had a marketing value of $250 you will receive 1,500 pieces of content worth $375,000 in marketing. Treat that gain as potential cost savings versus hiring professionals. What if some of this content is even good enough for in store or even TV media, the ROI can add up quickly.

So how does this create the new profit center?

If your brand has 500 creators at your disposal that you can activate to provide UGC for your marketing, as well as provide them rewards to cash in for your product, they quickly help you both save money and drive revenue.

If, for each of these 1,500 pieces of content you receive, they get a coupon for buying goods, which is redeemed 66% of the time (1,000 coupons) for an average profit of $20-50 (estimate), you will gain $20,000-50,000 profit from this program.

What if you then let these creators, who are loyal to your brand, send these offers to their networks. Then the profit can expand dramatically. Let’s say your creators are given a coupon code to share with their community. And these 500 creators collectively have a network of 200,000 followers (400 average each). These 3 posts have a reach of 600,000 possible impressions. If this coupon code is redeemed at even a conservative 2% rate for an average profit of $20-50, you will gain $240,000-$600,000 in profit.

What is the next step?

First, you need to invest in the process of building your creator network. If you aspire to have more than 20 creators, it is challenging to do this without a creator management platform. To build a creator network, you need a platform to help you find the creators, manage their UGC, and ultimately reward them for being part of your team.

Second, realize that a 1:1 creator network doesn’t build itself. It requires a commitment to the strategy. That being said, EnTribe has shown that with even a few hours a week, our partners stand up hundreds of creators in the first 60 days, generating usable creative and meaningful ROI.

In the COVID economy, where people have been forced to spend even more time in the digital world, companies continue to blindly drive revenue in a one-dimensional manner. They focus UGC strategies on what they’ve known, influencers. However, Influencer marketing costs can be significant and there are challenges with influencer-led programs recouping instagram influencer pricing. I would challenge anyone reading this to think about how your consumers, who are the lifeblood of your company, can be the brand ambassadors you need to thrive. In fact, if you gamify their participation in your marketing programs through an active UGC program, you could be creating what some consider the new age loyalty program. 

This new way of driving brand loyalty is actually a two-way street where the consumers perform for their rewards rather than simply buy your product for benefits.

Key Takeaways

Your influencer strategy at a glance

  1. Influencer costs are high, message is inauthentic, and content cannot be owned
  2. UGC is cheaper, more authentic, and ownable
  3. Unlike influencer marketing, UGC motivates creators to also be customers
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