Klout for Business: Useful but Incomplete View of Your Customer + reaction Klout CEO

Special Treatment of Select Customers Isn’t Anything New


Just as companies have been treating wealthy customers, or customers who are more likely to spend more with preferential treatment, there’s no surprise that some companies plan to segment customers based by influence.  As more consumer data appears in social media channels, relying on influence metrics like Twitter followers to blog readers will help companies identify those that can hurt or help the brand on a grander scale.  As a result, companies naturally will seek a standard measurement for measuring influence.

Businesses are Relying on Easy-to-Understand Klout for Finding and Prioritizing the ‘Elite’
Klout, starting to integrate into many digital touchpoints.  From hotels in Vegas offering special services to those with high scores, to a growing range of services that Klout is integrating with, and even politicians, the service is starting to grow.  In fact, I just learned that social integration and curation vendor Echo is already helping some clients sort which content appears on the corporate website based on their Klout score, see their documentation to learn more. Just last week, we learned that Klout is starting to integrate their service right into Twitter.com using browser extensions.
Relying on a Single Metric is Dangerous

In fact, this interesting case study below shows that Kenneth Cole’s Klout influence increased significantly during the Twitter debacle, as Klout fails to take into account sentiment measurement –just raw reactions and network growth.   See this image and my take in the image to take account.

Kenneth Cole's Klout score skyrockets during Egypt Fiasco --yet without sentiment data, Klout scores are an incomplete view.
Above Image: Kenneth Cole’s Klout score ascends nearly 30 points during his self-inflicted PR disaster.

While Useful, Klout Offers Significant Insufficiencies:

  1. Alienating your mainstream customers in desire to serve influentials. Careful when using Klout to segment customers priority, while high scoring Klout users may appreciate the ego boost –anyone with less than the ideal number of points may quickly fall out of love with your brand if you display elitist behavior. No one likes a ‘better than thou’ unless they are the ‘thou’.
  2. Consumers will game the system –reducing validity of metric. Expect many people to start gaming the Klout systems, in fact I see some ‘influential types’ tweeting over 200 times a day to try to hopefully raise their Klout scores, which just ends up annoying their followers.
  3. Klout is not representative of a customers real influence. Currently, as I understand it, Klout only siphons in content from Twitter and Facebook if the user allows for FB connect.
  4. Without sentiment of the influencer –the gauge is incomplete. Klout lacks sentiment analysis, so true opinions of what’s being said about the person may be ill-informed, see Kenneth Cole example above.
  5. Relying on this single metric alone is dangerous. as Frank Eliason of Citi (formerly Comcast Cares) indicates the “sleeping comcast technician” was uploaded by someone who had practically zero prior online influence.
  6. Influence is not a gauge of true buying potential. Perhaps the most important point is that influence scores don’t necessarily impact the revenue or customer satisfaction of your brand to your core set of customers. While we trust Scoble for technology choices, relying on him for the latest in landscaping design may be a mis direction worth avoiding.

Recommendations: Brands Must Factor in Relative Influence –not just Absolute Influence.
The folks at Klout have done a good service to the industry, but I must warn against blind enthusiasm to note that a single metric is not sufficient.  In fact, a single metric, like Klout’s 100 point scoring system applies well for Absolute influence (global influence) it’s unable to provide Relative influence, or influence related to a specific market, like baby diapers.  For example, Ashton Kutcher who has very high absolute influence, has relatively low influence when it comes to bio-engineering or pottery arts.  As a result, brands need to recognize there are more than one type of influence required.  As a customer strategist you must factor in both forms of influence before making a decision. Learn more about the various types of influence, NPS, and what the ideal metric would look like Remember, there is NO “Standard for Influence” –every market is different.

Companies must not rely on a single score like Klout alone, but develop their own formulas to factor in a variety of influence metrics that relate to their specific market

I look forward to the comments below: How should companies gauge influence? Also, see the SCRM pioneers thread on this topic. Update: Joe Fernandez, the CEO of Klout left a comment, kindly read.

  •  

    Hey Jeremiah, 

    I am the ceo and cofounder here at Klout. Thanks for taking the time to check out what we are doing here. Would love to have a deeper conversation about what we are learning from the market.

    One thing I wanted to point out is that we see the Klout Score as the tip of the iceberg. An overall general score is only helpful as a starting point. All of our data has a topical element. You can see from Klout.com that we list you as influential about social media, marketing, etc (http://klout.com/jowyang). Behind the scenes we have much more granular data that we use to target for the campaigns we work on with brands. This is why when we do a campaign for Disney we only invite people influential about parenting rather than Scoble.

    In terms of the insufficiencies you mentioned I think there are a few things worth noting:

    – We tell the companies we work that all customers deserve amazing service. When companies use Klout and give special service right now it tends to be part of the customer acquisition process. We haven’t heard any feedback that there has been backlash from mainstream customers.

    – Agree that gaming is an issue that we have to stay ahead. This is a huge challenge and somewhere we are putting a lot of effort.

    – We also have data from LinkedIn and intend to add many more data services. In terms of a person’s social web influence I believe we have a very strong metric. Any person that has a blog or participates on any other social platform we don’t cover is almost guaranteed to be active on twitter or FB and is represented in our system.

    – The sentiment analysis one is tough. When we used to think about this internally we would use George W Bush as an example (someone who was both loved and hated depending what side of the fence you were on). The feeling then was if someone makes people pay attention and take action, even if it’s negative, then they are influential. The Kenneth Cole example is different and something we hadn’t really seen before. We are definitely thinking about this though.

    – Influence is not a gauge of buying potential but it is a gauge for network potential. I think it’s important to know that even though a customer might not be the person who spends the most money with you they might unlock a new market to you.

Source: web-strategist.com

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