Create high quality UGC - Try Showcase for free
If you have a direct-to-consumer (DTC/D2C) brand, influencer marketing is one of the most cost-effective marketing strategies for you. Studies show that influencer marketing can increase your profits to as much as 650%.
Therefore, companies allocate more money and marketing efforts towards these types of social media campaigns.
DTC brands are unique because of their direct relationship to customers, and that’s why you need a unique way to address your audience. Let’s see how you can achieve that:
TL;DR
Influencer Marketing for DTC Brands:
- Influencer marketing can boost profits significantly, with a potential ROI of $6.50 for every $1 spent.
- Consumers, especially Gen Z, trust influencers more than traditional ads.
- Micro-influencers, who come off as regular people, can generate high trust and engagement.
Choosing the Right Micro-influencers:
- It's crucial to select micro-influencers aligned with brand values and to ensure contracts minimize risks.
- Building genuine relationships with influencers ensures more organic and authentic promotions.
Choosing the Right Channels:
- Instagram is dominant for DTC brands, while TikTok is emerging as a platform for younger audiences.
- Selecting the right platform depends on the brand's target audience and type of content: e.g., Phone Loops on Instagram vs. American Dairy Association's #Gotmilk challenge on TikTok.
Luxury Brands and Influencer Marketing:
- Luxury brands, like Away, have leveraged Instagram influencer marketing to skyrocket their popularity.
- Influencer marketing can be a lifeline during PR crises, as exemplified by Away's strategy during a product delay.
Influencer Marketing Challenges:
- There are inherent risks in selecting brand ambassadors, defining contract terms, and measuring campaign success.
- Brands should be wary of relying solely on vanity metrics and should focus on tangible metrics like sales, using tools like promo codes and affiliate links.
In essence, while influencer marketing offers massive potential, DTC brands need to be strategic and diligent to avoid pitfalls and truly capitalize on the opportunities.
The Advantages Of Influencer Marketing For DTC Brands
A special 2019 report by Edelman shows that two-thirds of consumers place more faith in influencers than traditional advertising.
That fact is hardly surprising considering that Gen Z is notoriously averse to usual advertising channels.
Besides, consider that the majority of people are now online, mostly on social media.
That tidbit leads to other interesting facts, such as that Instagram generates 93% of the engagement rate for luxury purchases.
We already linked to a study above that shows influencer marketing’s ROI is $6.50 for each $1 invested. As a result, more brands are reaching out to micro-influencers.
Here’s why that form of marketing works:
Micro-influencers appear authoritative and trustworthy. They seem like regular folks, which is why their followers trust them so much.
For example, inBeat worked with American Optics. The purpose was to increase awareness, engagement, and sales.
The micro-influencers we chose posted fun content about American Optics eyeglasses. The people we chose have loyal followers that look to them for lifestyle and parenting advice. So when these micro-influencers showed how happy their kids were with new gifts from American Optics, they created a lot of buzz around the brand.
Every parent wants to see that sort of happiness on their rugrats’ faces when they receive such a wonderful gift.
Secret tip: Parents also yearn for five minutes with at least a lukewarm cup of coffee while their kids are exploring.
Lessons learned:
- Invest your marketing budget wisely
- Choose micro-influencers that are authentic, inspiring, and trustworthy
- Identify your audience’s most poignant need and show how you can solve it
The Risks Of Influencer Marketing For DTC Brands
The harsh reality is that influencer marketing isn’t a silver bullet. Especially not for DTC brands.
Consider just one example: Kylie Jenner (yes, that Kylie Jenner). In one of her posts, she expressed eagerness to unpack Casper mattresses in her bare home.
The brand admits that its success is primarily due to social media influencers like Kylie Jenner. That’s why it allocates such a big part of its budget for influencer marketing.
However, Casper included social media influencers as critical IPO risk factors on their NY Stock Exchange application.
According to Casper, “use of social media marketing and influencers may materially and adversely affect our reputation or subject us to fines or other penalties.”
As sure as rain, influencers have a massive impact on your brand’s reputation. One wrong word at the wrong time can cost you billions.
It’s what Kylie Jenner did for Snapchat in 2018. Her seemingly innocuous post plummeted Snapchat’s shares by 7%.
So what should you do?
Strategize.
Choose the Right Micro-influencers
The first step of your strategy is coming up with a diverse array of micro-influencers. You’ll have to vet every one of them to make sure they fit your brand’s values, personality and business model.
Don’t neglect the contract.
You’ll have to think of many clauses that keep your micro-influencers accountable. That way, you’re diminishing the risk of public scandal and, therefore, plummeting shares.
Here’s another secret:
Cultivate authentic, friendly relationships with your micro-influencers. Ask them for input, advice, and feedback. That way, they feel invested in your brand.
This advice is more important than any other possible gifts or rewards when the influencers achieve their objectives.
Case in point: Foot Cardigan.
If you haven’t heard about this DTC brand before, they retail the coziest, fluffiest, childhood-memories-inducing socks on the planet, and we love them. That’s why many of their micro-influencers depict a warm, loving atmosphere when promoting these socks.
There’s more:
Foot Cardigan also knows how to create a solid micro-influencer family. Their micro-influencers post original content that’s adapted to their personality. Also, Foot Cardigan features them on its official website.
Here’s something even more important:
Micro-influencers like Colorado blogger Ashleigh Isobel know how to tie this brand to poignant issues in our society, such as gender inequality.
Cards Against Humanity is also on Instagram, and many of its followers are posting original user-generated content. It even has a separate meme page.
That way, Cards Against Humanity and brands like it can identify loyal micro-influencers in its followers’ list. You can do it too successfully because it’s not a new road. Just think of Transferwise’s story, which we detail in this post.
Choose the Right Channels
Instagram is one of DTC brands’ dominant platforms. And that’s why you have that little Shopping and Checkout feature on this platform.
However, TikTok is gaining speed for younger people.
Both social media platforms can increase your engagement rates because they’re excellent for authentic posts.
It’s essential to choose the right one, though.
Phone Loops is one of the brands we at inBeat helped. We connected them to the right micro-influencers, which created awesome content that actually converts on Instagram.
Instagram is the best channel to post highly visual content. These photos require a lot of effort to shoot and a secure grip. Whether you’re taking that millionth selfie to find the best post-able one or you’re in a safari truck photographing a lion’s sunset roar, you know what we’re hinting at.
That’s why Phone Loops chose Instagram.
However, American Dairy Association used TikTok to promote its #Gotmilk challenge because that’s the suitable social platform for Gen Z.
Our twenty-plus young athletes and artists reached 250,000 unique views combined and 10,000+ likes and comments.
What If I Have A Luxury Brand?
Many luxury brands use influencer marketing to gain notoriety or increase their sales.
We already told you that 93% of luxury shoppers are hooked through Instagram posts.
One of the best examples is Away. This travel brand has almost 104,000 posts on Instagram with the hashtag #travelaway. But it started early.
Away became a popular source of travel advice and gear because it invested in well-liked and trustworthy ambassadors. Plus, Away encouraged more of its followers to post original content and to share other people’s.
Currently, their #travelaway is so well-known, you can even see it inside their packaging. Away is now ranked the best luxury DTC brand.
Obviously, this marketing strategy bought Away a lot of notoriety and increased its profits.
There’s more, though:
Influencer marketing can help your brand even in times of PR crises. In 2015, Away was facing an image crisis as well, when it couldn’t deliver its first suitcase collection on time.
Away rebound with a book titled “The Places To Return To,” where people could read inspiring travel stories. Besides, these books feature gift cards.
Of course, it was more than influencer marketing to this rebound. Away surprised and uniquely rewarded its loyal customer base. But if Away lacked the aura built through diligent influencer marketing, it may not have succeeded.
Influencer Marketing for DTC Brands Is A Double-Edged Sword
We already discussed the damage that wrong brand ambassadors can do to your brand. You know the importance of perfecting your contract, choosing suitable digital channels, and working with trustworthy micro-influencers.
But there’s another problem:
Measuring your campaign’s results.
Vanity metrics like the number of likes and shares aren’t always representative, especially if your purpose is to generate more sales.
Luckily, you can track your sales with personalized promo codes and affiliate links. There are also lots of online tools to help you with that – we discuss all that here.
As you can see, influencer marketing is indeed a double-edged sword. You can get lost in finding the best brand ambassadors, choosing the right platforms, incentives, and measuring the results.
Need more help? Try inBeat now for free.