Where Are Your Company’s Influencers? It Depends On The Price Point

Crowdtap CEO Brandon Evans wrote a post on AdAge a little while ago titled “Why Influencer Marketing Isn’t About ‘Influencers’.” It’s a cogent, well-written post that you should definitely read if you haven’t already. 

He said there that “[m]ost consumers’ purchase decisions are not influenced by someone who tweets frequently or scores high on Klout, but rather by a person’s tight-knit group of family, friends and peers who share common interests and have earned trust regarding purchasing decisions.”

And he put quote marks around Influencers in the title to indicate that he’s talking about the “so-called influencers” like people with high Klout scores, which many unfortunately think is what influencer marketing is all about.

However, though I don’t think he gets anything wrong necessarily, I do question the range of B2C markets in which a consumer’s ‘tight-knit group of family, friends and peers’ plays the dominant role in the consumer’s decision-making. Brandon asks you to think back on choices you made in music, movies, restaurants, and fashion, and I think these are exactly the kinds of purchases that one’s friends and family do influence – I’m just assuming that’s the case with fashion though, as my friends and family have long regarded me as a lost cause in that department (seriously). But what happens when we climb further up the price ladder? Who influences your purchasing decisions in higher B2C price brackets, and where do they do it?

To use Brandon’s example, think back on your recent purchases of more expensive items, around or above, say, $300. Home electronics and appliances, for instance, and smartphones and, a little more expensive, computers. Did you listen mainly to what your friends, family, and peers had to say, or did you do some research yourself online too? And if you’re thinking about buying something in the thousands of dollars, like a boat or a brand new gas range, whom would you turn to then? My hunch is that as the price point goes up, you’ll listen increasingly less to your tight-knit group and more to stranger-experts, people whom you don’t know personally but who’ve established themselves as knowledgeable and trustworthy around certain topics – i.e., influencers (without scare quotes). And they’ll likely be people whose job it is to review and comment on these products, like a Walt Mossberg.

This shift or expansion in sources of influence on B2C purchases makes perfect sense when you think about it. As Brandon pointed out, you listen to your friends because you trust them and they have similar interests. Just ask yourself how many close friends of yours have entirely different tastes in music, movies, or fashion than you do. All of which is to say that lower-end purchases are likely to be more subjective – you either like a given band, Woody Allen, a certain jacket, etc., or you don’t. Whereas the standards you use to judge higher-cost items are likely to be more objective – this washer is faster and uses less detergent than that one; this car was found to use less gas and got a higher safety rating than that one, etc.

Of course, how a car looks is obviously important to the buyer too, and there are certainly some high-priced industries in which this kind of thinking doesn’t much come into play, such as with non-electronic items, like jewelry. Furthermore, buyers never seem to be as “rational” as some companies would like them to be.

Still, one of the main differences between lower- and higher-cost items, I think, is that there are more likely to be inarguable facts about the latter, whereas it’s very difficult to argue that this band or jacket is objectively better or worse than the next.

What about B2B?
Things are very different for B2B markets than for B2C. Nick Hayes of Influencer50 (where I work) wrote a white paper a while back on the correlation between price and online-vs-offline influence in B2B, so I’ll just make a few comments then point you to the paper.

High-cost items in B2B are much more expensive in absolute terms than high-cost items in B2C, so we’re not talking about the same price points. It’s interesting to note nonetheless that as consumers are more likely to seek expert opinion online as the price increases, the exact opposite is the case in B2B. Based on the make-up of Top50 Influencer Identification reports we’ve done over the years, there is a direct, negative correlation between price and online influence, as you can see in column G.

There are several reasons for this, most of them self-evident. High-cost B2B purchases carry much greater risk than high-cost B2C purchases. Sure, you may have buyer’s remorse after buying a certain car and your spouse may think you’re an idiot for a while, but that bad 6- or 7-seven-digit purchase you urged your company to make could cost you your job. And while online reviews from ‘somebody like me’ may increase the confidence a consumer has in his purchase, there’s no way a B2B decision-maker is going to push for a multi-figure buy based on some review he read online.

Decision-makers need third-party opinion to validate (and potentially shoulder some of the blame for) their purchasing recommendations, and they’ll insist on in-person communications with these third-party players (influencers) so they can be as confident as possible in their purchases. They’re spending their companies’ money, not their own, so the stakes are much higher. Furthermore, discussion of these complex B2B solutions, like enterprise-level business process management tools for instance, simply doesn’t lend itself to social media. It’s difficult to go into sufficient depth about these products outside of real, offline conversations. In addition, businesses compete with each other and take great pains to keep their dealings private, whereas I couldn’t care less if my friends knew I was looking for a new computer.

B2C is notoriously difficult for influence mapping because there are so many discrete possible sources of influence on the consumer. Perhaps it was the reviews she read online, simply the price, what her friends told her, or ‘the last five minutes’ that most influenced her decision. Or maybe it’s a combination of sources. Whereas in B2B the last two of these sources – one’s tight-knit group and ‘the last five minutes’ – can safely be all but ignored. Chances are your spouse or college buddy has little to no influence on your company’s purchasing decisions, and probably wouldn’t care to. As for ‘the last five minutes,’ you’ve no doubt heard stories of your friends going out to buy a specific product, like a certain smartphone, and then coming home with a different one. This doesn’t happen in B2B, as there’s simply too much planning, oversight, and risk involved.

I completely agree with Brandon that consumers don’t much look to ‘someone who tweets frequently or scores high on Klout’ when making purchasing decisions. And in absolute terms, he’s probably right that most consumers’ purchases are influenced by these tight-knit groups since the majority of items purchased in the world are relatively low in price. But just as consumers trust the opinions of their friends and family for lower-cost items, they’re more likely to incorporate third-party opinions from stranger-experts online as the items considered increase in price.

As for B2B, the higher your product’s cost the more likely your influencers are to wield their influence offline. That may sound like far too sweeping a claim, but it holds up more often than not. These influencers may be on social media, on Twitter perhaps, and maybe they blog now and then. But that’s not where most of them do their influencing. For more on this topic, see Nick’s white paper “Are Your Customers Influenced Online, Offline or Both?”

This post originally appeared at Influencer Marketing Review.

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