We have analyzed hundreds of campaigns across numerous industries and collected data about sales generated with estimates of campaign cost based on current standard KOL fees.
The two most important product aspects that will largely determine the outcomes of your influencer campaign are:
(1) Price of your products:
Cheaper products will fall into the category of “impulse buy”. These are typically more likely to be purchased as a direct result of your campaign.
On the other hand, customers will consider purchasing more expensive products for longer. The more expensive your product is, the more likely your campaign is to function as a branding campaign as opposed to generating sales.
(2) How established your brand is
New brands require long term branding campaigns before sales can cover direct campaign costs.
Let’s draw 2 axis. Quantity of sales on the X axis, price on the Y axis.
We then add total campaign costs parallel to X axis. This includes direct + indirect payment to influencer(s),
and giveaways that are part of the campaign, management costs (staff, promotion materials, organization)
Everything above this threshold means profits from sales immediately following the campaign are higher than campaign costs.
Sales below this threshold mean immediate sales did not cover the campaign costs.
Note: Price (X axis) represents your profit/item as well as product price, assuming same profit margin (%).
Now let’s have a look at how well are different types of products going to sell.
In the illustration below we’ve used snacks as an example. A direct endorsement is likely going to lead to high volume of sales (impulse buy) that will cover your promotion costs with little regard to how established your brand is.
Products in the range of 200 - 1 000 CNY are still considered impulse buy. However, your branding is going to play a much larger role in the success of the campaign.
Sales campaigns with products priced at 1 000 - 20 000 CNY generally do not generate enough profit to cover the campaign costs in the short term. These campaigns improve brand image and will likely deliver sales over a longer period of time. More established brands are more likely to directly benefit in terms of profit from immediate sales.
Very expensive products
Campaigns for products over >20 000 CNY should be considered branding campaigns as the immediate sales rarely cover the campaign costs.
What to keep in mind
Make purchasing your products easy for customers: Your store/products should be directly linked in influencer’s posting, typically it means paying for “plus package” to the influencer so your brand can be properly mentioned.
Make your products stand out: Your store and overall presentation need to look professional (Chinese way).
Pick the right time: Various shopping festivals may or may not be the right time for your campaign. Typically, bloggers will charge you more during this time. Customers will be ready to spend money but you may not get their attention. Consider what is your competition doing.
Pick the right platform: You can find influencers on all Chinese social media platforms - WeChat, Weibo, RED, DouYin, Taobao… Each platform comes with a set of pros and cons as their user base varies.