How to decide how much to pay influencers

By
Kam Thandi
March 28, 2022
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By
Kam Thandi
March 28, 2022
Interviewee:
Interviewer:
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How to decide how much to pay influencers

There is still growing value in having someone create content for you and your brand online. Though it's true that individual influencers may fluctuate in terms of their followers, the market for first-person marketing is still alive and thriving. 

One of the most challenging aspects of partnering with influencers is deciding how much you are willing to pay them for their work.

This question is complicated further by the lack of standards around how much is acceptable to pay influencers.  It's probably fair to say that - like most industries - people are reluctant to share what they receive for a rate. Often, it's private for a reason, like competition and to ensure they're paid fairly

Additionally, the sphere of influence, in general, can be difficult to navigate. Should you pay a million-plus per post if your potential influencer is a star on a national TV show? Would it be more like 200 dollars if you wanted to work with a creator who had thousands of followers? Would that be too cheap? 

There are also emerging platforms out there like Clara, which rates brands on how they pay. Clara takes it one step further and has creators’ portfolios on there for other creators and brands to check out. 

Regardless of how you look at it and even with a ridiculously wide pay gap, you'll need to put in some time and effort to maximize your experience with creators. We offer some tips and suggestions below.

The size and quality of their audience

This is one of the easiest ways to gauge value. According to one influencer consultant, "1 to 5 percent of your following size per post" is a standard industry price for influencers, and that seems to be the typical ratio seen on the Web when seeking guidance.

It is also important to assess the influencer's audience quality, i.e., does their audience engage with their content? Beyond engagement, does this audience match the ideal customer for your product or service? Ensure that the influencer does not buy their followers from "bot farms", a trend that has become increasingly popular among influencers. If you understand the size and quality of the influencer's audience, you can estimate your true potential reach. 

The right fit for your brand

Sure, an influencer can have 100K high-engaging followers that can be perfect for what type of service or goods that you provide that potential audience. But, is the tone, look and feel of what they post the message you want to send? Make sure your influencer fits well with your brand identity when factoring in how much you are willing to spend. 

The cadence of their sponsored posts

Think about the service or goods that you provide, and how frequently you want to get out in front of a new audience. For some, getting the best results may require a "saturation strategy" that includes more than one sponsored post a month.  Depending on the situation, a softer sell is best for what's being offered to potential customers. The best approach is to figure this out first, and you can use your regular marketing plan as a guide to help you.

The quality of a creator’s work

Research into what your creator or influencer has done for other brands, both in terms of advertising as well as personal posts. The quality of content online varies wildly, and those who keep up with technology while still being able to make great use of video or other media can likely be successful. If you are providing services or goods that are more DIY, though, don’t discount something that’s a bit more homespun or less “professional.” Again, if it fits with your brand identity, it’s okay to give it a go. 

Because this is an industry with such a varied pay scale, it’s okay to negotiate terms directly with the creator or influencer. Additionally, it's important to remember that a collaboration with an influencer is more than just a business transaction - it's a true partnership with the potential to benefit both parties.

The advantages with Lumanu and brands

The use of Lumanu can assist your hired influencers in creating better content by removing frustration and friction from the payment process. Your creator may not deliver the highest quality content for your brand if they are frustrated or confused about your payment process.

Paying “vendors” as a brand can be challenging enough.  In this case, many companies treat individual influencers as “vendors” which means these partnerships are subject to the same challenges of getting them set up in your AP system as a verified vendor.  Vendor onboarding often includes training, tax paperwork, the collection of personal and legal information, and the setup of where to send the funds. There are often restrictions on what you can and cannot do with payment software. This makes it challenging to attempt to use your regular payment software to flex to be able to pay influencers at scale as regular vendors of your company. 

Lumanu understands all of these common challenges and has created a seamless solution that seamlessly integrates into your existing AP process and makes paying influencers at scale a breeze. 

Pay multiple creators in seconds: With Lumanu, multiple invoices from influencers can be selected and paid with a single click.  Every payment is recorded and available in your payments dashboard with easy reporting abilities to increase transparency for your AP team. 

Easier funding:  One thing that can be challenging about paying influencers is the delays that occur when having to constantly request funds or approval from your AP team.  With Lumanu, you can pre-fund your account easily or request funds from your accounting team on an as-needed basis, reducing friction and tedious back and forth approval conversations. 

Skip vendor onboarding processes and collecting tax paperwork: Onboarding creators to Lumanu is as easy as sending them a link to create an account and linking their bank.  As part of their account creation process, we handle the collection of all tax and W-9 information and report on behalf of your team. 

Strengthen relationships: Lumanu offers creators the option to get paid instantly for approved work as part of our Lumanu EarlyPay program. We pay them early, and you pay the invoice as you normally would on your regular schedule without disrupting your process.  It's free for you, and creators love and appreciate having options for controlling their cash flow. As a result, they will love working with your brand.

Save time handholding creators: Dedicated creator success teams are available at Lumanu to assist with onboarding and troubleshooting, so you don't have to spend time on handholding creators. 

Collaborate easier: Manage relationships, reduce back and forths,  speed up approval processes, and receive full-size files from creators, from influencers to freelancers, with one convenient dashboard.

Spare yourself the hassle of vendor onboarding, tax paperwork collection, dealing with 1099s, and tedious single-payment restrictions. All this and so much more for only $39.

Find out more about what Lumanu can offer you and your collaborators. Check out the full range of what Lumanu can do for your business.