Research shows that over 86% of an influencer’s followers are likely to buy a product based on their recommendations. Influencer marketing has impacted sales 10 times than it used to be. All kinds of businesses and enterprises are choosing it as a strategy to drive leads and sales today. Earlier, influencer marketing was limited to just big brands with massive budgets. But in today’s times, even small enterprises are partnering with influencers for various marketing campaigns and growth.
Before we dive deeper into the impact influencer marketing has on SMEs, let us understand the concept in detail and the need for it.
What is Influencer Marketing and Why SMEs Need It?
The term “influencer marketing” holds its roots in the early 18th century where a regular British potter gained popularity by promoting his “Queenware” pottery with royal endorsement from Queen Charlotte, wife of King Charles III in England. This even today represents an example of how small businesses can earn massive success with the help of an individual’s social influence and power.
Influencer marketing sums up as a form of marketing that leverages the reach of individuals with loyal followers online or offline to promote products, brands or services with authenticity and impact. It is a powerful way of connecting with people to educate and influence their buying decisions. Unlike traditional marketing, influencer marketing is based on relationship and trust. When an influencer decides to talk about a product on his profile, followers perceive it more like a personal recommendation than a sales pitch.
For example, if a travel influencer shares a convenient way of booking tickets using an application, followers are more likely to download and try that application because they value the influencer’s opinion. Businesses partner with influencers to achieve goals like increasing visibility of their products, generating engagement, boosting sales and building long-term loyalty with the consumers.
Small enterprises need influencer marketing to tackle their struggle with limited visibility, low-budgets and minimum reach compared to larger competitors. Influencer marketing spans as a cost-effective strategy to directly communicate with the targeted audience through authentic voices. Moreover, it offers small enterprises options of customization, data-based engagement and originality.
Key Benefits of Influencer Marketing for SMEs
1. It is cost-effective
Small enterprises find it difficult to invest highly in marketing or advertising domains. The reason being, many enterprises start with a low-budget and depend on the profit generated. Often, industries need a good amount of money to expand. And expansion happens only when investment is done on marketing or advertising domains. Influencer marketing is cost-effective compared to marketing done with the help of celebrities or wealthy families.
2. It gives targeted reach
Unlike mainstream advertising, influencer marketing brings the focus of SMEs to the targeted audience. With the collaboration of niche-based influencers who have built a community, small enterprises can reach out to potential consumers who are very likely to engage and convert. This precise targeting done by these enterprises can turn out to be timesaving, cost-saving and even energy-saving as efforts are comparatively lesser. The process is also easier and far more convenient.
3. It builds trust and credibility
Often, winning the trust of people is difficult when it comes to SMEs. People usually prefer businesses that are widely popular, present in the market for a long time and chosen by several people to gain the benefits. People also prefer brands who are ranked by trusted authorities and so on. Most of the SMEs are in the stage of building reputation with the buyers. Influencer marketing plays an important role in this scenario. It helps SMEs fill the gap and win the trust of the buyers despite being new, having limited buyers and limited resources.
4. It boosts sales and conversions
Influencer marketing provides SMEs a powerful way to generate leads and conversions. Sales rise when an influencer having thousands of followers' posts about a product in detail. As the followers already trust and support the influencer by following their profile, SMEs gain buying decisions from those followers. It is observed that more than 80% of an influencer’s following can buy the product promoted by the influencer. On top of that, features like discount coupons and affiliate links make it easier for SMEs to generate conversions.
Challenges SMEs Face in Influencer Marketing
Although influencer marketing is some of the most-preferred ways of marketing for SMEs today, there are potential challenges linked with it as well. Understanding those challenges can help SMEs find solutions to it with the right approach:
- 1. Budget limitations: Several SMEs execute tasks with budget constraints which makes it difficult to approach top-tier influencers. Many top-tier influencers today hold equal value to a celebrity which means great demand for monetary benefits. Negotiation becomes challenging in this case as influencers may not want to lower the market trends with SMEs.
- 2. Finding the right influencer: Often even if an influencer has the same niche that SMEs have, the voice or values may differ. For example, suppose a small business offers 100% natural beauty products but the influencers they come across are promoting random beauty products, then the business may face the lack of sharing USP of the brand well.
- 3. The “fake-followers” risk: One of the most common hurdles SMEs faces include fake followers of influencers. Often, bots are used to represent an individual as a strong influencer with huge influence, but the results state a completely opposite scenario. It wastes the investment made by SMEs due to poor engagement and sales.
Every coin has two sides. Similarly, the impact of influencer marketing can be contradictory for different businesses. Yet, the benefits are far more than the challenges which makes influencer marketing a great choice for SMEs to promote their product or service. With right research, influencers with fake followers can be avoided and the suitable influencer can be discovered. At times, negotiations may work as well.
Conclusion
Influencer marketing is a widely used strategy of businesses trying to gain larger reach, better engagement and wider visibility. With extremely significant benefits like boost in sales, boost in reach and boost in terms of trust, SMEs can upscale greatly in no time. Resultantly, several SMEs today have started opting influencer marketing for effective and effortless growth. Yet, challenges and hurdles can affect influencer marketing results for SMEs too. With the right research and approach, challenges are completely solvable and easier to tackle.
