SETTING EXPECTATIONS FOR YOUR INFLUENCER CAMPAIGNS

So you have decided to launch a promotion campaign in China to improve sales of your products using online influencers (KOLs). First of all - good decision! Banners, TV ads, co-branding, pop up shops, SEM and other ways of advertising all have their place and the choice of the exact advertising mix will depend on the type and size of your business. That said, online influencers should, in most cases, be a part of your strategy. And more often than not, they give you the best bang for the buck.

There is a lot of cheating in the online influencer business and you need to select your bloggers carefully - more on that in our Guide to Influencers

But assuming you have found authentic, high quality influencers that are a perfect fit for your brand/product, what can you expect in terms of the sales an influencer campaign will generate for you?

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.

graph%20of%20campaigns%202

We then add total campaign costs parallel to X axis. This includes direct + indirect payment to influencer(s),
discounts
and giveaways that are part of the campaign, management costs (staff, promotion materials, organization)
and other.

graph%20of%20campaigns%202

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 (%).

graph%20of%20campaigns%202

Now let’s have a look at how well are different types of products going to sell.

Cheap products

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.

graph%20of%20campaigns%202

Medium-price products

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.

graph%20of%20campaigns%202

Expensive products

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.

graph%20of%20campaigns%202

Very expensive products

Campaigns for products over >20 000 CNY should be considered branding campaigns as the immediate sales rarely cover the campaign costs.

graph%20of%20campaigns%202

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.

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China at the centre of it all.

Shanghai Jungle was founded in 2013. The company is based in Shanghai and solely focused on helping western companies, organizations and government agencies with their China marketing.

Our focus is mainly online marketing - but we also provide offline marketing, market research and other related services. Our team consists of Chinese, German, Danish and Czech nationals, which we believe enable us to both understand our clients and also the Chinese market. We currently serve more than 100 clients from 12 different countries.

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(+86) 150 0008 6214

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