Shopify’s Entrepreneur-in-Residence: ‘No, Influencer Marketing Isn’t Overhyped’

David Gaylord is a former chief of staff at Shopify who now serves as Shopify’s Entrepreneur-in-Residence. His main hustle is scaling his company, Bushbalm, which sells products to treat ingrown hairs, razor burn, dark spots, and other commonly ignored skin irritations the natural way. Learn more about David and Bushbalm’s journey.

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If I told you a decade ago that ingrown pubic hair oil would have a robust community of influencers, you’d probably laugh. But as of today my company, Bushbalm, sees roughly a 3 to 1 return for every dollar we spend on influencer marketing. It’s become a strategic way for us to diversify our traffic and grow awareness, especially as digital advertising costs continue to creep up.

Like with any marketing tactic, it boils down to how you approach it. Lots of new entrepreneurs view influencer marketing as a huge investment involving yacht parties and a ton of cash. Perhaps this was true five years ago when the market was less sophisticated, but nowadays you can treat influencer marketing as a repeatable marketing motion for as little as $50 a campaign.

At Bushbalm, we only started influencer marketing earlier this year, after a series of small, successful experiments. We first experimented with $1,000 on a campaign, saw some success, then spent a little more on another, saw more success, and so on. Now we’re at a point where we regularly set aside $10,000/month for influencer marketing and we’re seeing returns that rival our robust digital marketing program.

That said, our growth hasn’t always been a smooth hockey stick curve.

One time, we spent $2,500 and got back more than $65,000 in sales. The next time we spent $10,000 and got back less than $5,000. It can be hit or miss, but your goal should be to hit more winners than losers.

How did we get here? Below, I’ll share 5 tips for growing a profitable and sustainable influencer marketing program, based on our experience at Bushbalm. 

1. Think strategically, not tactically

A common trap new business owners fall into is thinking of influencer marketing as a one-off tactic that will reap lots of customers from day one. Or they try to copy Nike’s killer influencer marketing campaigns, not realizing that Nike spends tons of money building relationships with its influencers. If you’re willing to take big financial risks, you might get a huge payoff from a one-off campaign or two. But most of us can’t afford that.

In my opinion, the best time to start influencer marketing is when you’ve reached a scale and size where you can take bets without too much risk.

The challenge with influencer marketing is that it often doesn’t scale like paid ads. You can’t simply spend more to get more in influencer marketing, as it takes weeks of relationship building—typically, our team sends 7-10 back and forth emails with an influencer for a deal to go through. This makes it vitally important to define clear goals of what you hope to achieve from this approach.

At Bushbalm, we’ve identified 3 goals:

1. Drive sales: This is the obvious goal, but it shouldn’t be your only one or you’ll miss a tremendous opportunity to grow your audience. Micro-influencers are well-suited for this goal. 
2. Increase brand awareness: We know some influencer campaigns won’t give us a return (we have a metric we made up called ROIS — Return On Influencer Spend). This is fine, as these big campaigns lead to awareness with press, large retailers, etc. Important if you are trying to grow your reputation. 
3. Produce content: Some of our influencer campaigns go completely hidden, as we simply want images for emails and ads. Producing content is expensive and hard and influencers are amazing at it. More on that later. 

Not every influencer campaign has to meet all three of these goals. Sometimes, we deliberately work with a big-name influencer for brand awareness and press attention, but know they won’t convert as well as, say, a niche influencer. The important thing is being deliberate with your goals. 

2. Use this formula to assess influencer “value”

This wasn’t the case five years ago, but the rates influencers charge nowadays are pretty fair with some wild exceptions. I use a rough formula to quickly double check every influencer’s average Cost Per Mile (CPM), as some of the less experienced influencers don’t give reasonable rates.

Our formula is this:

For example, let’s say you receive a price sheet from a YouTube star quoting $10,000 for a 3-minute video. Look at the number of views, likes, and comments of their last five videos, and divide that number by $10,000. This is roughly the influencer’s CPM. Not perfect, but this will give you something to compare.

This formula helps you benchmark potential influencers, but it needs to be paired with a less objective metric: fit. 

3. Find influencers with a genuine connection to your product

This one seems obvious, but it’s easy to forget when you’re first starting out. The only way to make influencer marketing successful is to find people who truly fit your brand, meaning they have a genuine connection to your purpose and mission.

We’ve worked with several influencers who regularly talk about skin challenges, whether it’s dark spots or hyperpigmentation—challenges that Bushbalm solves—and their campaigns are always a hit. They perform better than influencers with large followings but who don’t really use and like your product.

For example, we worked with Delaney Childs to promote our Bermuda oil product. It was great. She’s talked about her skin challenges before, so the message came out very naturally.

Don’t discount micro-influencers either, who have fewer followers but make up for it in audience engagement and actual sales.

You can find them for as little as $50, whereas bigger influencers typically charge around $5000 – $15,000.

4. Tracking the ROI of a relationship

Influencer marketing isn’t a one and done transaction. Some brands, like GymShark, sign long-term influencer deals. Building a relationship with a strategic partner can be very beneficial, so you need to nurture it.

For all of our campaigns, we try to use methods that allow us to understand the exact return from an influencer. One of the easiest ways to do this is through a discount code, which lets us track every sale using the code. You can also get more complex and run landing pages which would let you track page views, sessions, and ultimately a conversion rate from that post.

Additionally, we use a platform that automates gifting with micro influencers. This platform gives out personalized affiliate codes, rewards for the influencers and even cash for submitted content. I’d highly recommend this if you are at a larger scale, as managing a large influencer program becomes time consuming and you’ll need to showcase the ROI to continue with it.

I don’t recommend you keeping tabs on likes and comments.

You’ll often see lots of likes and comments, but no conversions. This is a sign their audience might be a bit superficial, or worse, not truly engaged in the content. It’s also important not to underestimate the value of an image you can run in advertising. For instance, if you get a video or photo that converts well in ads you can spend upwards of $1000 a day on that single creative. That could be worth hundreds of thousands of dollars in the long run if it converts well. More on that in the next point.

I don’t have all the answers for tracking. Here are a few more considerations that should play a role in your ROI calculation. If you know a good way to track these, find me on Twitter!

1. Time. On average it takes our team between 7 and 10 emails to finalize an agreement. This cost of time likely won’t be added into your calculation, but your team member could be working on something more impactful. Just something to consider. 
2. Brand Value. I’d love to understand how to calculate this at a smaller company. 
3. Retail Partnerships . You may not be able to measure it, but retail buyers follow influential people. If they see a post, perhaps they will find you. It’s hard to measure, but could be worth millions. 

5. Some content never makes it to social media

We typically spend $100-500 for content from a micro-influencer, and sometimes these campaigns aren’t posted to our organic social channels. We leverage them purely for digital ads or email campaigns. This is probably our most profitable venture.

Influencer marketing has revolutionized how we produce digital ad campaigns. In the past we’d spend a ton of money on professional photo shoots and models, but we’ve found that our influencers’ content to perform better! Often it’s raw and doesn’t totally meet our brand guidelines, but it’s authentic and often performs better than the polished stuff. I’d rather pay a hundred dollars to ten people than spend $1,000 on one perfect image. When it comes to advertising, more variants is more, and you’d be shocked at what works.

Grow your influence

With advertising costs on the rise, we’ve found influencer marketing to be an effective way to grow our audience and convert more sales. The key to making it a scalable part of your marketing portfolio is to build it methodically, aiming for more wins than losses. Also, make the most of all of your influencer content for your paid channels.

Trust me, every niche product has an audience—it’s all about getting in front of them.

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