The Future of Brand is Influencers because CAC

Influencers. We love ‘em, we hate ‘em, we love to hate em. Status and influence over others has been a thing since we decided to congregate in groups. Internet communities and social media has enabled social influence in the greatest scales we’ve ever seen.

In the modern business world, there are two things that matter above the rest. How much it cost you to acquire a customer (CAC), and how much that customer will spend with you over their lifetime (LTV).

I don’t want to pretend like I know all the answers here, because I don’t. But from what I’ve seen as someone who spends hours consuming content everyday is that the vast majority of things we see tend to come from people we like and trust. Whether that’s our friends trying a new breakfast place, bucketlist worthy photos in Asia and Europe, or showing off their new outfit. In a world where we spend hours watching stories, scrolling through feeds, and sharing short form video, the people we like and trust have a disproportionate amount of influence in our buying decisions, and ultimately how we see ourselves.

The internet, and really social media has meant that there is a collection of interest around certain people who deliver what people are looking for most. That’s the influencer effect. If you are a creator that understands what your audience wants, they will not only keep watching, but they’ll share and become your biggest advocates.

I’m sure you implicitly knew all that already. Where this begins to become interesting is how comparatively powerful a person you pseudo know and follow is for trying something new vs a paid ad.

How many videos have you seen about what people pay in rent, what mystery gift people select, how much free money they win by doing a challenge, or how good people look in photos from street photographers?

You’ve seen thousands, maybe even millions of ads in your life. You can easily recognize one in pretty much every platform you use, and I bet you tune them out without even trying. To really be recognized as an ad and to drive the action you’re looking for when running a traditional paid ad, you have to be exceptionally good. But when your first touch point to your customers is through a familiar channel that has established trust, the message is received in a far deeper and more actionable manner.

Put another way, I’ve had maybe 10 conversations about the Amex Cobalt card in Canada and more than half of them have resulted in a referral. Imagine if you ran an ad, 10 people saw it, and you got 5 or 6 signups. A few caveats, I’m not an influencer in the typical sense, but I did drive action and I did “influence” people to do something.

The bottom line is that the delivery method and packaging of the message have an extraordinarily powerful effect on action. And that there’s so much space for those who hold the attention to generate the next billion dollar brands. In the not-so-distant future it’ll become increasingly obvious that engaging and maintaining a direct and trusted link at scale with your customers drives lifetime value of your existing customers, and drastically reduces the cost of acquiring another customer. These influencers are building distribution channels like nothing before. Of course the product will still need to be something people want otherwise it’s a leaky bucket situation cough threads.

I don’t see how a future would exist in which the majority of products you use will not be associated with a person you know and trust in some way because wouldn’t you always use the product that is developed and used by a person you like and follow over a faceless megacorp?