Influencer pricing is very misunderstood by the industry. The top two misunderstandings are that 1) pricing is dependent solely on the influencer and 2) the following and engagement of an influencer should dictate their price point. Here we discuss a few questions and misunderstandings regarding influencer pricing while offering some solutions.

Understand The Agreement

Influencer marketing is a collaboration. Brands don’t understand this: effective influencers view brands the same way that brands view influencers. Would you pay any two influencers the same rate for an opportunity? Similarly, an influencer will charge brands differently depending on the brand. The most effective influencers don’t price based on the size of the brand, but the ultimate benefit to their audience and their brand. You can’t price an influencer without the brand.

Credible Influencers

Brands who equate an influencer’s follower count to their worth haven’t yet figured out effective influencer marketing. Consumers are moved by need and credibility above all. Many consumers who follow celebrities and engage with their content don’t necessarily view them as credible: they don’t respect their opinions or judgement. Instead, they follow them for entertainment.
Therefore, when an incredible or untrustworthy influencer makes a post with their recommendation for a product, many followers will not pay this much attention, much less be moved to purchase.

Attention Vs Awareness

Brands may rely on the expansive following of influencers to spread awareness even if it’s latent. However, those who rely on latent advertisement and seed planting disregard one simple fact: the volume and variety of content that we consume on a daily basis is causing this method to become increasingly impractical. Instead of seeing 5 commercials every 15 minutes, we see a commercial every 10 seconds.
The effectiveness of the channel is the true currency in influencer marketing. Not the size or relevance.

Ask

Contact a ton of influencers with a variety of offers. Gauge how their price point varies with their following and engagement. As mentioned earlier, influencer pricing can be very situational and often depends on more than the influencer. Furthemore, the influencer marketing industry is very unstandardized and growing rapidly. As a result, most reports or survey findings will be fairly inaccurate. Therefore, the most accurate way to price influencers is by asking. Conduct your research internally in order to understand pricing as it relates to your brand.

Check The Metrics

As mentioned earlier, following and engagement are not the end all for influencer pricing. Value is determined by how much the decision making of those followers is influenced. However, basic metrics can be good indicators for establishing a baseline for pricing. A few basic metrics to check include followers, likes, comments, and shares. In some cases, presence on other different platforms can also be an indicator of value. It’s true that an influencer can have a significant following on one platform and limited influence on other platforms. However, dedicated following on multiple platforms can often be a sign of a person with real influence.

Know your ask

Are you looking for a story post, feed post, or just content? Be intentional about what you’re looking for. Are you looking for content or a story post because you want to engage this influencer, but don’t have the budget for a full post? Do you want a story feature because you want to leverage the features of instagram stories to take a poll and gain feedback? Do you require a story post in order to portray strong support for your brand and a concrete collaboration? You may want the content from the influencer because showing the influencer’s support to your following is sufficient to reinforce your existing base. This may be true in a situation where you want your existing following to purchase a product as opposed to increasing awareness or acquiring new customers.

Add tracking

Add tools that allow you to measure how much the influencer contributed to your business growth. This will allow you to continuously improve your price point as you continue to engage influencers.