Intro: [00:00:03] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service, accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:23] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own, and understand when you might need help along the way.

Mike Blake: [00:00:45] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. I am Managing Partner of the Strategic Valuation and Advisory Services Practice, which brings clarity to the most important strategic decisions of business owners and executives face by presenting them with factual evidence for such decisions. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols.

Mike Blake: [00:01:18] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also recently launched a new LinkedIn group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:46] Today’s topic is, Should I use influencer marketing? According to influencermarketinghub.com, a global influencer marketing market is expected to reach $16.4 billion in 2022. YouTube’s top earner in 2021 was Ryan Kaji , who made $29.5 million. So, it’s a thing now. And, you know, this is a topic I’ve wanted to do for a while, but haven’t really found the right person to help us with it until now.

Mike Blake: [00:02:21] You know, it’s funny as I watch my kids grow up, they don’t watch movies anymore, they don’t watch T.V. shows anymore. It’s my generation, Generation X, the sort of binge watches, and I think only the Baby Boomers left will actually watch real T.V. with commercials and stuff anymore. But when a commercial comes on during a sporting event, my kids think something’s wrong with the television. And it just goes to show you how our watching habits or viewing habits have changed so rapidly, almost overnight, to me, but I’m sure it’s taken longer than that.

Mike Blake: [00:03:02] And influencers to us, to outsiders – I consider myself an outsider as sort of a late GenXer or an older GenXer – on the surface, they seem to be people that are basically famous for being famous. But we sort of forget, again, that on channels, such as YouTube and Facebook Video and TikTok and Instagram, they are celebrities. They’re simply celebrities in a medium that just isn’t the place where I normally hang out. That doesn’t make it worse. It just makes it different. And, in fact, it probably makes it increasingly attractive to marketers. So, I’m looking forward to learning more about this because I don’t know as much about it as I would like and should, and I hope you’ll get a lot out of it as well.

Mike Blake: [00:03:50] So, joining us today is Richard Grove, who is the Chief Operating Officer of Wall Control, a family-owned and operated brand of wall storage and organization systems ranging from garage tool storage to kitchen wall organizers, and even industrial tool organizational systems for industry leading Fortune 100 companies across the globe.

Mike Blake: [00:04:10] Richard’s background is in engineering, but what he enjoys most now is brand building through relationships and creative marketing, as well as implementing scalable solutions for growing his businesses. Richard began his career with the Department of Defense as an engineer on the C-5 Galaxy Engineering Team based out of Warner Robins. While Richard found this experience both rewarding and fulfilling, he always knew deep down that he wanted to return to the small family business that originally triggered his interest in engineering.

Mike Blake: [00:04:38] Richard came to work for the family business, Dekalb Tool & Die, in 2008 as a mechanical engineer. At the time, Wall Control was a little more than a small side hustle for Dekalb Tool & Die to try to produce some incremental income. There was no Wall Control employee, just a small warehouse with a single tool and die maker that would double as an order fulfillment associate on occasion at the original wallcontrol.com website, which Richard’s grandmother built, pulled in, in order.

Mike Blake: [00:05:06] Today, Wall Control is responsible for the employment of 50 employees and occupies over 60,000 square foot physical footprint of its own while still growing rapidly. Wall Control is also proud to say that they are now Dekalb Tool & Die’s biggest customer by volume sold through their shop. Richard Grove, welcome to the program.

Richard Grove: [00:05:43] Thanks, Mike. It’s my pleasure to be here. So, I appreciate the intro and kind of your background, what you want to get out of the conversation, and what you’d like your audience to get out of it. I think it’ll be a fun one.

Mike Blake: [00:05:54] Great. So, let’s start off because not everybody may be necessarily familiar with the term, when we say or when you say influencer marketing, what does that mean?

Richard Grove: [00:06:05] So, I mean, for me, just in that one question, there’s a ton of stuff we can unpack in our conversation. So, I think you nailed on what comes to mind when people think influencer marketing. If they do have any preconceived notion of it, they think it’s somebody who’s famous for being famous, a million or more Instagram followers pushing products out to their audience.

Richard Grove: [00:06:05] We think about it a little bit differently in that, influencer marketing is really any third party voice that is suggesting to an audience they should use a product or check out a brand, and that that audience is receptive to that message. So, you know, you do have your famous for being famous Instagram folks who have massive audiences who can promote a product and people will go check it out.

Richard Grove: [00:06:53] But an influencer could also be your Great Aunt Ethel, who’s got 30 really close friends that she plays bridge with, who, if she posts something on Facebook, a product she likes, maybe four of them will check it out and purchase it. So, anything in between that, in our opinion, can be defined as influencer marketing.

Mike Blake: [00:07:14] But when did influencer marketing start to gain traction? And to really just sort of put it very bluntly, at what point did influencer marketing become a thing, not just sort of a cute little side hustle or a cute little thing that people did, but became a really serious business activity?

Richard Grove: [00:07:30] From my perspective, I would say, probably, around ten years ago, it started to gain traction. And the “influencer” community started to think more in terms of monetizing their influence. And then, over really the last five to ten years, it’s really kind of picked up steam. But our experience began, probably, about 2015 is when we started kind of getting in those waters and giving it a try and allocating some marketing budget to experimenting with it.

Mike Blake: [00:08:05] So, I made an observation in my intro that I’m curious if you agree or disagree with, and please feel free to disagree, what is the relationship or the link, if any, between influencer marketing and what we might have called celebrity endorsements? How are they connected? How are they different?

Richard Grove: [00:08:25] I think there’s a lot of crossover, so there’s a lot of similarities, but there’s also a lot of differences. So, the way we look for a partner – and we don’t call them influencers. We call them partners or brand ambassadors. Because the term influencer can be a little reductionist – for instance, our product is tool storage systems. The people who use our product that have influence are tradesmen, craftsmen, makers, really skilled DIY folks. And so, those people have an audience because they’re good at what they do and their audience respects what they do. And so, if they’re to tell our audience about our product and endorse it, it carries a lot more weight.

Richard Grove: [00:09:11] So, that’s very different than just, “Hey, Kanye West. Can you sell this for me? I’ll give you however much money and we’ll make you a partner if you just push it on your channel.” So, they’re both by definition influencer marketing. It’s just in our experience, and for the size of company that we are, and the relationships that we want to build, it’s a lot better for us to start with the person who had the skill, that built the audience with the skill, and then go from that direction.

Mike Blake: [00:09:44] And I wonder if also sort of a different sort of driver behind the evolution, you know, one thing that strikes me is, most celebrity endorsements are quick hits. Think about a priceline.com, William Shatner, Kaley Cuoco – I don’t know if that’s still a thing anymore – but they were cute commercials. I’ll be the first to admit I’m just in the tank for William Shatner. I just love the guy.

Mike Blake: [00:10:11] But influencer marketing, to me, is almost they’re infomercials. You know, the people that I follow on YouTube – I’m big into tech – so I follow Linus Tech Tips and Luke Miani and some other people that are particularly in the Macintosh platform. Lisa Gade of MobileTechReviews is also excellent, and Dave2D.

Mike Blake: [00:10:35] And they’re getting up there, and they’re demonstrating products for, like, a-half-an-hour. And I’m watching them, and if I’m honest, I’m watching them do a 30 minute commercial that they may or may not be being paid for. Somehow, those influence marketers do their thing in a way that makes me want to watch a commercial for 30 minutes. It’s bizarre.

Richard Grove: [00:11:04] Absolutely. One of our biggest things when we get reached out to is what are the deliverables, what do you expect from us. And the first thing we say is we want it to be organic content. We want you to be in your shop building something and then you’re using your Wall Control system and it comes up that way versus just shoehorning something in that looks like a commercial.

Richard Grove: [00:11:26] So, like you said, you could do a whole video on how to use it, and it could actually be informative and bring value to the viewer beyond just trying to sell the product. And maybe the product is not even being sold, it’s just making them aware of what you can do, “I happen to use this system”. And, to me, that’s a very powerful message because you haven’t told anybody to buy anything, but you’ve told them this is a valuable thing to do, here’s the thing I found to be the best at it. I think that resonates a lot more than, “So and so sent me this and let me tell you about it.”

Richard Grove: [00:11:59] I mean, it’s a really subtle but big difference between a product review. I think the thing that came before the influencer marketing were, “Send me a free product and I’ll do a product review for you.” So, we saw a lot of that. And, again, it’s very subtle, but that didn’t seem to move the needle very much for us.

Richard Grove: [00:12:22] And some people would take our product out of the box. They wouldn’t even install it or use it. They would just talk about it. And so, if I’m a viewer, I’m not influenced by that. I just think you got something for free or you got paid a little to promote something on a YouTube channel.

Richard Grove: [00:12:40] And I think the good ones, too, their audience has respect for them. They don’t think they’re going to get up and just hustle something to make a buck. It’s actually something that they think will bring value to their viewer.

Mike Blake: [00:12:52] So, somebody listening to this conversation now may be thinking, “Okay. Influencer marketing is a thing. It seems like it’s growing. It’s here to stay. It’s not just a passing fad.” How did you arrive at the conclusion that influencer marketing would be useful to you? And can you tell us a little bit of the story about how you implemented or acted upon that?

Richard Grove: [00:13:13] For sure. Yeah. So, people would reach out for product review, “Pay us this and we’ll review this product.” And I forget what year, probably around 2015, the first one that we really worked with, his name is Lazy Guy DIY on Instagram. And he’s a super close partner to us now. And he reached out – and it’s a funny story we tell – he said, “If you send me a free product, I can use it in my shop and talk about it when it makes sense.” And we we’re like, “No. Why would we do that?” And he had a solid following and all that, we didn’t understand the value proposition of it like we do now.

Richard Grove: [00:13:52] And so, after a little while of building a relationship, and I think he actually bought some products, too, when we see someone do that, it really tells us they’re committed to our product line. So, we ended up sending him some product and started to slowly – I think the key is slowly for people – started to build that trust in this process and started to see results from it. And since then, there’s all kinds of creative marketing things that we’ve done together. He runs our Wall Control Instagram account. Our Brand Ambassador Program, he manages that.

Richard Grove: [00:14:27] So, we’ve brought on these partners, some we work super closely with, and some of them it is just a free product, let’s see what you can do with it kind of thing. So, I’m not sure if that helps answer the question. But, yeah, from there it started to snowball. He was able to bring in his other friends in the community.

Richard Grove: [00:14:44] And I think that’s another point, is, if you pick the right partners, they introduce you and your brand to their community. And that’s where the greatest value comes from, not just the potential consumer, but other “influencer partners” that they happen to have in their network. So, it’s as much networking as it is trying to sell product through a lot of eyeballs on any given social channel.

Mike Blake: [00:15:13] So, I want to pause on that because, nowadays, there’s no shortage of these potential influencers. That’s a thing, a lot of kids now would love to become influencers. That’s like the thing they want to do when they grow up. And I’m sure that even back when you started this, you had no shortage of potential choices. How did you settle on that particular person? What were the criteria, either explicitly or looking back implicitly, you used to select that person or maybe others, you may have increased your portfolio of partners, to decide that they are the people you wanted to represent your products in the marketplace?

Richard Grove: [00:15:57] Yeah. That’s a great question. And there was no specific criteria at the time. And we do have some criteria now, but it is still very person to person and situational that we make these decisions. But I think what happened there was, we couldn’t send free product. We had never done this before. We didn’t know what the ROI was going to look like.

Richard Grove: [00:16:18] So, we maybe gave him a discount and he bought on his own. So, he put his own money in it. He started using the product. We followed him on his channel, so we could see it in the background. He would reach out and ask us questions about it, and give us feedback on ways to improve it. And that relationship developed before we were kind of in “business together”.

Richard Grove: [00:16:38] And I think that’s an example of ideally what we look for is somebody who is aware of our product, either uses it on their own already, or has some experience with it, and really wants to develop a longer term relationship versus just paper posts, “Give me however much and I’ll do an Instagram post about it”.

Richard Grove: [00:17:00] So, it’s kind of hard to articulate, but you really start to get a feel for it after you’ve been doing it for a little bit and you have a good partner. So, once you have a good partner, you kind of know what the opposite of flash in the pan, hit or miss opportunity is going to be. And you can kind of tailor it in the right direction once you start to get a handle for it.

Mike Blake: [00:17:21] Now, I think you said that this particular partner, at least at the time when you started that relationship, was particularly active on Instagram. Is that where most of the influencer marketing hangs out? Or are there other channels that are useful as well? And does that choice of channel at all impact who you’re going to choose to partner with?

Richard Grove: [00:17:50] Definitely. I think Instagram is a good kind of barometer or thermometer to gauge the temperature of what that influencer might be able to deliver. Follower count is certainly an important criteria, but it’s not the be all, end all. So, if someone has a solid following on Instagram and they have some other channels, like a YouTube channel, or what’s really good are blogs, that’s another great thing, that’s a solid partner.

Richard Grove: [00:18:17] We’re not super interested in just the Instagram folks. And the reason being is what we’ve seen really moves the needle is evergreen content. So, content that stays online and gets indexed and shows up in search results, you know, month after month, year after year.

Richard Grove: [00:18:33] So, somebody might have a really small Instagram account and someone might overlook it, but maybe their blog has hundreds of thousands of clicks every month, well, if they’re going to do an article about us, that’s going to stay up forever, potentially. So, that could very well be far worth it than just somebody who’s got half-a-million Instagram followers and does one post that slowly or quickly starts to fall down their feed, only seen one time. So, it’s kind of a balancing act.

Richard Grove: [00:19:03] And, again, Instagram is great. And that seems to be – especially you talk about young folks trying to get out and make a name for themselves – where they want to build their audience. But I think that what we’re looking for are those influencers who have taken the step of moving their brand off of that platform and taking ownership themselves. So, they have a website and they have their brand across multiple channels.

Mike Blake: [00:19:31] I think that’s really interesting you mentioned blogs. You know, I would not have expected that, and you’d think I’d learned by now. Because blogs come up often, they’re so easy to forget. You know, we’re so enamored of video and podcasts and the so-called dynamic or rich audio visual multimedia content, whatever you want to call it. And what keeps coming up over and over in conversations like this in terms of digital marketing, is that blogs still matter. And I think a lot of people forget that. So, can you talk a little bit about your experience with blogs in terms of how they relate to your influencer marketing strategy?

Richard Grove: [00:20:15] It’s funny you mention it, because it’s like we say untapped, but it has been tapped. It’s almost like people forgot about it. And it’s like what’s old is new again. And so, we really like that because, I mean, if you do a Google search for our product and someone writes a solid blog article and it’s got perfect SEO, it’s going to show up, and it’s going to take a spot in indexing, and it’s going to bring benefit to our customer.

Richard Grove: [00:20:42] The other thing we like about it is – and we can get into this a little more wherever you want to go with it – we use an affiliate link program where they can embed affiliate links and get a commission on the traffic that they send to us. Some of our older, longer, stronger relationships of brand ambassadors, we make this available to them. And so, when they have a blog and we get traffic, that’s really solid evidence that what they’re doing is helping our brand. And it’s a lot easier for us to partner with them at a deeper level, higher, bigger projects, more spend, because we know we’re going to get that ROI. Whereas, again, if it’s just Instagram, the the analytics are not great for us knowing what our return on investment was.

Mike Blake: [00:21:25] So, was there anything that you had to do to kind of get ready to successfully leverage influencer marketing? Were there things you had to do differently, think about differently? Or were you kind of ready made to step into that and be successful from day one?

Richard Grove: [00:21:40] We have totally learned as we went along. There was nothing in place. And that’s what I would say to anybody listening, is, just start trying. There’s no right way to do it. There’s probably some wrong ways, but there’s really no right or wrong. Just whatever works for you and your brand and the partners is going to be your next best step. So, we’ve learned as we’ve went along. We definitely had to put some guardrails in there as time went along.

Richard Grove: [00:22:10] Again, we don’t want to go strictly by follower count. It’s not a really good indicator of what sort of influence they have. That’s another thing we could get into, is, what their engagement looks like. But it does set some guardrails and it allows us to start some conversations as far as vetting who we’re going to partner with.

Richard Grove: [00:22:27] Especially for everybody, budget is a factor. Lately, raw materials, supply chain issues have made product scarcity problem. So, who you send product to is much more impactful than it used to be because it’s expensive and hard to get. So, I think you’ve got to just start and you’ve got to play around with it and you’ve got to iterate quickly and go where it takes you.

Mike Blake: [00:22:54] And my understanding is your company sells both consumer and industrial grade products. You’re in the B2B and B2C, is that right?

Richard Grove: [00:23:05] Yes .Exactly. Yes.

Mike Blake: [00:23:07] So, when you started, did you have in mind that you’d be using or leveraging or investing in influencer marketing to address the consumer market or the business market or both? Or did that just sort of fall out of experimentation as well?

Richard Grove: [00:23:24] Yeah. At first, it was definitely the consumer market. But then, we started to see added benefit in the business market because a lot of our influencer partners were involved in these other programs as well for the big box stores. So, there was a lot of crossover there. And then, just by nature of all the eyeballs that are on them, get eyeballs on your potential retail partners and buyers.

Richard Grove: [00:23:50] So, say, Partner A is having a conversation with his audience. Well, the buyer for Home Depot or whatever big box store happens to watch him as well, becomes aware of your product and you can kind of work that angle to get the business to business model going.

Richard Grove: [00:24:07] So, it’s kind of weird. I mean, it goes in all kinds of different directions, and it’s been super cool just watching how things evolve. And how every single partnership, there’s been different things that have come from it. There’s certainly no straight path to where you want to go. But, yeah, we started with the end user consumer in mind, but I’ve definitely seen it benefit both sides of our business and continues to do so.

Mike Blake: [00:24:37] And I think that’s sort of evolving. When I think influencer market, I certainly think B2C. And the most important categories of influencer marketing do seem to be lifestyle, health and beauty, things of that nature, at least if the data that I see is to be believed. But I think as an increasing number of business decision makers are spending time on the Instagrams and YouTubes and so forth, it has become already and will continue to be a more important channel for B2B marketing as well.

Richard Grove: [00:25:11] I think B2B – at least our B2B – is selling to an end user or some customer who’s going to just buy a product and put it up. So, when they see all the eyeballs on our product, that tells them they want to have it on their shelves. So, it used to be – and it still is this way – you want to have a product that is an obvious best seller with higher reviews and does well across multiple channels. That was usually how you get your foot in the door with a big box store.

Richard Grove: [00:25:43] Well, now, you can also point to your social following and the people that they use to sell to their audience that are using our product already. So, it’s a really organic way to move that conversation, “Hey, I see you work with Partner X,Y,Z over there. Well, they already use our system.” All their eyeballs are your customers too. It’s an easy sell for you. It’s already there. Let’s see what we can do as far as putting something together there.

Mike Blake: [00:26:12] This may be not a fair question, but we specialize in unfair questions here on the Decision Vision podcast.

Richard Grove: [00:26:17] No problem.

Mike Blake: [00:26:19] And that question is, in your mind, as you sort of have thought about this so much, are there any industries that don’t lend themselves well to influencer marketing? There are certain kinds of industries where it’s sort of square peg, round hole kind of thing.

Richard Grove: [00:26:36] I’ll say yes, there’s some that are probably less than others, but it could be different. So, for instance, our manufacturing plant, it’s a tool and die shop, so their customer is going to be an automotive manufacturer. It’s not anything you’re going to see on Instagram. Nobody is going to buy car parts from us for an assembly line because they saw it on Instagram or using it, and there’s no way they could anyways.

Richard Grove: [00:27:03] But the way it can be leveraged is, one of our biggest challenge on the manufacturing side is finding skilled workers and finding people who want to come in and take the time to learn the trade. I mean, it’s very lucrative, but it’s just not something you hear a lot of. And so, we can use Instagram there to show what we do and make it cool, because it already is cool.

Richard Grove: [00:27:26] So, it’s the same thing with our partners we work with that are in the trades, they’re showing kids that this is cool stuff to do. If you don’t want to go to college and you want to go learn a trade, there is a path where you can be an influencer in some tool and die shop or in a woodworking shop. So, I think that influencer marketing can be used in those environments, not to sell product, but to sell your business to potential employees, which is kind of, I guess, a new way to look at it. And we’re starting to kind of play around with that too by opening up our doors and showing people on Instagram what we do and making it cool.

Mike Blake: [00:28:09] I think that’s a really smart point, is, we’re in a – in my lifetime – unprecedented period where there’s just an unusually tight labor market that appears to be structural in nature, it’s not temporary, it’s not a fad. It looks like we’ve had two seismic shift. And influencer marketing may no longer just be about selling product, but it’s also wanting to attract the best and the brightest to come work for you.

Richard Grove: [00:28:40] Yeah. I mean, if we have a solid following and we say, “Come work for us,” and maybe we have them, “You could start an Instagram account that’s semi-professional. It’s going to be you, personally, but you can show the work you’re doing in the shop,” assuming there’s no NDA or something related to it. And then, we can promote you on our channel so we can build you up. Like, if you want to be an influencer, we can try to help you a little bit along the way. So, it’s kind of leveraging our audience to help the employee do what they want to do while also performing the job.

Mike Blake: [00:29:15] Can you work with multiple influencers at once? One thing that I think might differentiate celebrity endorsements from influencer marketing is that celebrity endorsements tend to focus on one or two people at most. You have the face for your product. Is that also the case in influencer marketing? Or can you have a broader portfolio of people that are your brand ambassadors? Can you have in effect a state department as brand ambassadors for your product?

Richard Grove: [00:29:51] I think you definitely can and that’s what we do. If we had an issue, it would be, maybe, a big box store issue. Like, one big box store had this bucket of influencers and the other big box store had another bucket of brand ambassadors and they didn’t want crossover there. But because our product is sold in multiple big box stores, that’s usually not an issue. So, for us, that’s not something we really have to spend any sort of issue for where there is some sort of conflicting interest behind the scenes there.

Richard Grove: [00:30:24] Going back to kind of how we partner with them, I’ll bring back Adam from Lazy Guy DIY. He’s a good example. So, because he’s a woodworker and he’s used to our product, we figured let’s let him design a woodworking value kit. So, something we could private label under his name that he can promote on his channels and earn a commission on. And so, if you look on our website under value kits, you’d find the Lazy Guy DIY Woodworking Kit. So, he would get paid on the sale of each of those units.

Richard Grove: [00:30:58] And one of the cool things, too, it became very easy to move that into the woodworking stores because they’re familiar with his work and his name is on it, so it’s an easier sell for them. The other thing, too, they know they can tag him, that’ll get re-shared to their audience. So, there’s a lot of creative ways to go with that.

Richard Grove: [00:31:18] But that would probably be the closest thing we might run across where we couldn’t have multiple places selling that one thing because woodwork in Distributor A isn’t happy with woodwork in Distributor B selling the same product. But even with that, we’ve never run into any kind of problem or any sort of restrictions.

Mike Blake: [00:31:41] Now, of course, most, if not all, companies have finite marketing budgets. We’d love to spend endless dollars on it if we could, but we can’t. What are you finding, if anything, you’re doing less of so that you make room for influencer marketing? What is it replacing in your portfolio of marketing activities?

Richard Grove: [00:32:02] Well, that’s a good question, and it’s evolving, for sure. So, the iOS 15 update, the most recent one Apple released, very heavy on the consumer privacy. So, we’re seeing with our email marketing, our pay per click marketing, it’s becoming a little harder to track and target our ideal customer. So, the ROI there is starting to fall off a little bit. We’re still heavily involved in that and we’ll continue to.

Richard Grove: [00:32:33] But we’re starting to try to funnel some of that money away from there and into the influencer marketing space because we know their audience and their audience is our potential customer. So, we don’t have to guess. We don’t have to try to hope that they have agreed to cookie tracking and all that. We can actually know that the people they’re talking to are our potential buyers.

Mike Blake: [00:32:55] And you said something that I think is important that I want to kind of pause on it and drill into it a little bit, is that, you know your audience. Another maybe strength of influencer marketing versus broader celebrity endorsements, is, celebrity endorsements – in my impression, anyway – is that they’re blasted out to a large audience. Super Bowl commercials, for example. And you hope that you just sort of reach enough of them by sheer large numbers.

Mike Blake: [00:33:24] Influencer marketing allows you to target very specific audience. And I think – correct if I’m wrong – there’s also a lot more data available to be able to analyze the impact or at least potential impact of what you’re doing. So, you can make empirically fact-based decisions on how you spend your dollars.

Richard Grove: [00:33:47] Exactly. And just like any experiment, if you set one variable up, it’s easier to see what impact it has. So, for instance, our product line will go in a lot of different places. It goes in a woodshop. It goes in a home gym. It goes in a kitchen. So, maybe one month – for us – we’re just going to focus on home gyms and see how the needle moves speaking directly to that audience. And then, the next month move to another target audience.

Richard Grove: [00:34:17] Again, Instagram is a little tricky because we can’t really track their audience to our website unless it’s like a direct link. And the other thing, too, is we sell through retailers. So, if somebody sees our product on Instagram, they could go pick it up at a retail store, and we would never know that that’s what influenced their purchase. But if we segment our targeting, we can look over time and say, “Okay. When we were running this campaign, we really sold a lot of these.” So, let’s assume that that delta between the month before was because we were targeting that audience.

Mike Blake: [00:34:53] One concern, I imagine, is arising with some of the people listening to the program is that, “Boy, this sounds expensive.” Some of these YouTube marketers are making serious money and they’re not even going to talk to us for a level that’s outside of our budget. And it’s sort of the barrier to entry of celebrity endorsements all over again. Is that true or are there ways to kind of dip your toe in this and still have some kind of effect?

Richard Grove: [00:35:29] For sure. And I would say full disclosure, we have never been a pay for post company. That’s not how we engage with our partners, our brand ambassadors, and especially not at the very beginning. So, what we’ve always done is free product for exposure based on what that audience size looks like.

Richard Grove: [00:35:47] And we should also talk about an influencer is not an influencer, is not an influencer. There’s the micro-influencer, which you would define – we’ll just talk Instagram numbers just because it’s easy – somewhere around 10,000 followers would kind of be in that category. I say 10,000 to 100,000 followers. And then, beyond that, you start getting into the folks who have the agencies that they want you to work with and they want to be paid.

Richard Grove: [00:36:14] So, what I would do if I was starting from scratch, I’d try to find somebody who I see in the community I would like to target who seems to be knowledgeable, start following them. Maybe reach out on Instagram or send a DM on some other platform and say, “Hey. We like what you’re doing. We think our product might be a benefit to you. Would you mind if we sent you some free products?” And that’s a pretty organic way to just start a conversation and you can kind of see where that goes.

Richard Grove: [00:36:41] And then, from there, what we would do, basically kind of our playbook, is, we start with a free product and we see how that goes. From there, we see where the relationship goes and then we can talk about paid engagements after that.

Richard Grove: [00:36:56] And the other thing, too, our product line is heavy. It’s expensive to produce and ship. So, if we’ve already got the initial investment in a shop, it’s easier for us to come up with some creative ways to actually pay money to the influencer to help market our product.

Richard Grove: [00:37:11] And another creative way that we’ve found works really well, our affiliate programs. There’s a really good plug and play APIs that can plug into almost any website’s backend where you can easily track these conversions and pay your influencer partner a commission off of all the sales that they generate from traffic they send to your website. So, that’s how we do it and how we got started. And I think it’s a pretty easy way to kind of dip your toe into it.

Richard Grove: [00:37:38] The other thing, too – I keep going back to follower count – you don’t want to just look at that. You really want to look at engagement, and it doesn’t take very long to figure out if it’s there or not. So, if somebody has 200,000 followers on Instagram, but their post only gets ten likes and no comments, that’s probably not going to give you a big bang for your buck. Whereas, maybe somebody got 5,000 followers, but every post gets a thousand something likes and a bunch of comments. That’s a really engaged audience who’s going to be much more receptive to the content they put out.

Mike Blake: [00:38:11] I’m talking with Richard Grove. And the topic is, Should I use influencer marketing? So, you touched on something that I think is really important I want to make sure that we cover today. And that is, how are influencers typically compensated? Is it commission? I mean, I’m truly ignorant about this. How does that payment structure typically work?

Richard Grove: [00:38:39] I mean, a lot of different ways. So, typically, I would say your micro-influencer is probably not compensated. It’s probably just a side hustle for them, is usually what we see. And I can’t speak to all brands, but their first year of compensation for us would be that commission paid out based on sales that they send our way. That would be kind of the base level. Then, if that’s going really well and say they want to really put some time and energy into something like a blog post or a YouTube video, we could talk about what that pay structure would look like.

Richard Grove: [00:39:18] And the other thing, too, is, because it’s so hard to attribute sales in this way, it’s even more important for a company to be aware of what their typical customer acquisition cost looks like and what kind of return they’re getting across other platforms. Because that’ll give you some structure to talk about with an influencer partner.

Richard Grove: [00:39:42] So, say, we have a new product we’re rolling out and we were going to make our own internal YouTube video, there’s going to be some cost inherent to that. We’re going to have to pay our employee. We’re going to have to spend some time doing it. So, whatever costs we would spend doing that, I’m cool with paying one of our partners to do it. And we’re going to get more traction because they have a bigger audience and it’s coming from a third person perspective, so it’s going to hit a little different than if we’re telling you our product is great, go buy it. So, that’s one way to do it.

Richard Grove: [00:40:10] And another thing to keep in mind is – just like that – look for creative ways to monetize your partner. It’s going to probably be different for every brand and every industry. Even if it’s one off, that’s fine too. Don’t think that if you do it for this one person, you’ve got to do it for this other person, and it has to be totally scalable. I would work it on a partner by partner basis and then slowly refine what your criteria is as you go along. And don’t be afraid to make mistakes there either, because that’s really the only way you’re going to learn what steps to take next.

Mike Blake: [00:40:50] We touched on this a little bit, but I want to make sure we hit it, and that is, one of the benefits of influencer marketing and digital marketing, in general, is that we get much more relevant data, in some cases, effectively real time. What are the KPIs or key performance indicators you look at in measuring the effectiveness of your investment in influencer marketing?

Richard Grove: [00:41:17] So, we look at it as a whole. We look at the program as a whole. I don’t want to give all of our criteria, but we typically say that in order to send free product, we’d like for you to have 10,000 followers on at least one social channel. Because we found that based on our average order size and customer acquisition costs, that tends to be a good return on investment for us.

Richard Grove: [00:41:51] If it’s less than that, what we’ll usually do is provide some heavy discount code. And we have an incubator program that will put folks in that bucket. While they grow their audience, we’ll try to help them grow their audience through our audience as well. And develop a relationship so that when they hit these certain thresholds, it makes more sense to open up the product giveaways and we can open up the actual monetary spend.

Richard Grove: [00:42:19] So, what we do is we try to look at the program as a whole and we use the analytics that come in from our affiliate network to try to gauge what sort of return on investment we’re seeing there. And, again, it gets muddy because of the retail network. But we tend to see that rising tides lift all ships. And so, if we were running a campaign, we, generally, can tell what impact that had on our overall sales and attribute that back to the partners we working with, and what sort of budget we moved over into that bucket. Does that help answer the question?

Mike Blake: [00:42:51] Yeah, I think it does. Richard, you’ve been so generous with your time and your knowledge today, and I don’t want to abuse that. We’re running up against our time limit today. And I’m sure there are questions we either didn’t cover or our listeners would have wished that we had gone into more depth with. If people have questions about this topic about influencer marketing and want to get some feedback from you, can they contact you? And if so, what’s the best way to do that?

Richard Grove: [00:43:19] Yeah. If they want to just reach out on social media, I’m MrWallStorage on Twitter and on Instagram, and then we can go from there.

Mike Blake: [00:43:30] That’s going to wrap it up for today’s program. I’d like to thank Richard Grove so much for sharing his expertise with us.

Mike Blake: [00:43:37] We’ll be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcast, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them.

Mike Blake: [00:43:53] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my new LinkedIn group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.