Right now, influencer marketing is proving one of the best returns on investment that you’ll see in the marketing space. The average brand receives $6.50 for every $1 in spend.
Today, I had the honor of speaking with one of our clients, Justin Kowalsky, who is the Communications Strategist at a new company that sells in 4 categories (apparel, home, accessories, and fragrances) on Shopify.
Justin agreed we could post this interview under the condition that we keep his store’s URL private.
Josh: So, do you have a background in selling anything like this? Or where exactly did this all come from?
Justin: We’re watching big box stores go bankrupt because they haven’t been staying with the times. I come from a marketing background and it makes sense to me why these stores are closing up while other brand new labels are coming out and exploding in a matter of days with proper marketing. We’ve just been jealous of seeing ecommerce stores pop up everywhere and making a killing from executing the proper marketing strategies.
Josh: So you knew you wanted to sell products online and start a brand, but why these categories?
Justin: We wanted to sell to women. Women are very receptive to ads and have been far more responsive in our campaign tests so far. We didn’t care what we sold, it just had to target women heavily. That’s the market we wanted.
Josh: Okay, so you sourced your products from where?
Justin: We dropped about $20k in samples and inventory. Lots of stuff you find online is junk – that’s just the risk you take. You really have to spend time and money waiting to see the quality. Once you get over that hurdle though, the marketing is pretty straight forward.
Josh: Alright, let’s get to the good stuff. Most people have a product, but they can’t ever reach $60k in revenue, let alone in a week, let alone in their first week. What channels did you test?
Justin: I think it’s quite clear; social media marketing is where you have to be focused. Mainly, that breaks down into either paid ads, such as Facebook ads or influencer marketing. You’ve got to know you way around one or the other, or companies like mine will take your market share.
Josh: How much are you spending on Facebook ads? What are your numbers like?
Justin: We’re actually not spending anything on Facebook ads right now. Facebook, Instagram, Adwords, Snapchat et al are no longer cheap. Those times are gone. Fortune 500s and big government are dumping budgets on ads, and the market is balancing. You’re basically going to get $1 out for 1% you spend in ads, on average. For every clueless beginner that’s losing money, there’s a successful agency running a campaign that’s making big bucks. If you don’t have the experience and knowledge, you’ll be like everyone else – losing money on Facebook ads. So we don’t bother with that rat race. Some are making a killing, but the gold rush times are gone and it’s just 10x easier to make an influencer campaign profitable.
Josh: Okay, hang on. So did your ads ever make money?
Justin: Some had a ROI of about 150% and others were barely breaking even, so we got bored quick with that channel. Especially with the numbers we were seeing in our other channels. I’m sure we could have made it work with a bit of time.
Josh: So influencer marketing. I read the other day the average brand see’s over 600% return on investment. Tell us about your journey.
Justin: We’re young, we know how it works. We knew the pricing that most influencers charge and we knew brands were making a killing. We never executed on it before, so this was our first time. The main issue we faced within the first day or so was simply that we couldn’t scale campaigns. We reached out to about 25 influencers manually, but that took me two hours and then I had to reply to their replies and what not. It was real work.
Josh: So what kind of options did you consider to help you with this?
Justin: There are a ton of influencer marketing options out there. If there’s 100, there’s 1000. There is a massive abundance of marketing tools, partly I think is because brands are desperate to get into influencer marketing while it’s so cheap. So it took a while to sort through. We probably looked at 20 solutions. We found most required a demo, a 12-month contract, ridiculous prices, huge markups or commissions, and what not. We just wanted to get started right away and see how much an outreach tool would help us. At this point, we were starting to see success from some of our campaigns. We already had some great photos of our products, so it was just a matter of PayPaling the money and letting them choose a photo that they felt worked with their feed.
Josh: Got it. So how many tools did you end up trying?
Justin: We tried about 5 different solutions. They either had trials or free accounts. Most were pretty plain. They didn’t offer analytics. They didn’t offer any advanced AI or machine learning. The data was simple. Some were charging $1200 a month, plus a setup fee, plus a 12-month contract, and you barely got any data. We were quick to cross those off the list. We wanted a tool that could search influencers, analyze them and their audiences, and also easily send them emails in bulk after we filter through them with a few metrics.
Josh: So, how did you like Shout?
Justin: Killer, as you know. We grabbed a free account, inserted a list of niches and let the system crawl Instagram. After crawling, we sorted through them based on the metrics of their audiences. We added them all to an outreach campaign and blasted out offers to all of them. It was amazing to see 2 hours of work done in maybe 10 minutes of my own time. It’s a really good feeling when you try a product and it actually does what you want.
Josh: I’m glad to hear that. So tell us, fast forward to today, how many influencers do you have now?
Justin: About 450. We’re probably going to get more soon, but I think we are covering our space well, so it’s not really a rush. Shout got us where we needed. You can only go so big, then everyone knows your product. So I’m not even sure how much more we’ll get. Your product did it’s job so well, we don’t need it anymore! If you think about it, 450 people, each with a serious following, all recommending your product. It’s kind of unbelievable.
Josh: Well, that’s all the questions I have for you. Thanks for taking the time to chat. I know you mentioned you had a meeting right after this, so I’ll give you some time to prepare for that.
Justin: Ya, sounds good man. Talk soon.
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