BrainTrust Query: Is Klout the New Kredit Score?

Discussion
Mar 19, 2012

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.

Celebrities have long been known to receive special treatment — the best seats in the house, front of the line access to the hippest clubs and healthy discounts on the things they buy. Now, social networks have given rise to a new breed of celebrity — the influencer.

For businesses, identifying and connecting with influencers has never been easier than it is today. Rating system Klout, for example, ranks users by the size and engagement level of their social/professional network. Based on this, it calculates what it calls a Klout score — a measure of the user’s overall influence across specific topics — which could include anything from business to religion and everything in between. While Klout’s accuracy is a topic of hot debate, most can agree that it’s at least directionally indicative of one’s online swagger. Other networks like Twitter, make it simple to see who commands the greatest following within a certain topic area.

It’s not unusual for retailers to reward their biggest spenders with special perks and privileges. Now they’re waking up to the potential that influencers possess to get others to buy as well. For example, online retailer Gilt Groupe recently announced an offer giving Klout users special discounts proportionate to their Klout score. Similarly, California fashion retailer Volga Verdi offered customers specific discounts based on the size of their social network — more friends, bigger discount. All of this is in an effort, of course, to get these same influencers to evangelize their brand to flocks of fans, followers and friends.

It’s far too early in the game to determine precisely how effective these kinds of promotions are, but there are also some inherent risks. First among these may be quite simply recognizing and rewarding the wrong people. The size of someone’s network is not always the most accurate gauge of influence. Most experts agree that the absolute number of followers is relatively less important than the percentage of those followers that actually do what the influencer recommends or endorses.

But there also remains a social component to all this that we shouldn’t lose sight of. If this marketing approach becomes pervasive (and it probably will, at least for a while), it runs the risk of undermining much of the inherent spirit of social networking — that it’s social, not commercial. Already in social networks, some users are suspiciously indiscriminant in their efforts to connect and gather followers. Their motivation is questionable. Imagine having good reason to believe that these requests for connection are merely a means to a higher discount or more free stuff.

I suppose if there’s a moral question here, it’s this: are we conceivably turning "friends" into little more than bargaining chips for a better deal? Human coupons waiting for redemption?

Discussion Questions: What value do you place on targeting influencers across social networks? Does targeting influencers in this way risk perverting the “social” aspects of social networks and lead to a backlash for businesses who pursue it?

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14 Comments on "BrainTrust Query: Is Klout the New Kredit Score?"

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Max Goldberg
Guest
5 years 8 months ago

Targeting influencers is an age-old marketing tactic. Social media simply presents a way to reach more people faster. Tupperware parties and coffees for political candidates all tapped into social networks by using an individual as a hub for reaching others.

Marketers are always going to try to reach consumers. It’s up to the consumer to determine if she wants to expose her network to commercial messages. If someone opts to use her network for commercial purposes, her friends can opt out. If enough opt out, a clear message is sent.

David Biernbaum
Guest
5 years 8 months ago

Recognizing and targeting The Influencer is one of the most key and dynamic components to promote and elevate your brand. However, you are not alone in trying to make this happen. “Everybody’s doing it.” I work closely with my client companies to show them how! It’s important to know and realize that influencers are not always big time celebrities and in most cases, they are not celebrities at all.

Ian Percy
Guest
5 years 8 months ago

With Hollywood celebrities, everyone knows they get paid to endorse products and read the teleprompter. We don’t really believe Robert Wagner or Fred Thompson have a reverse mortgage for example, that either is a mortgage expert, or that they care.

The “influencers” will be known solely for what they influence which could be a huge advantage IF “integrity” goes along with it. In this case integrity means they would say the same thing about a product independent of whether they are paid or not. Will that happen? Only for about a week and then the smell of money will compromise pretty well everything. We may not be for sale but pretty well all of us are for rent.

This is not likely to happen outside of Consumer Reports, but when an influencer tells us what not to buy as well as what to buy, then we’ll be on to something. “Influence Integrity” is the score we need to establish. Wonder if the url is available! Hey…I thought of it first!

Adrian Weidmann
Guest
5 years 8 months ago

Beware of targeting influencers across social networks! Even within professional social networks, there are those ‘influencers’ that have use the emergence of social networks to develop and amplify their voice but their direct experience and opinions are either limited or ‘for sale’. In my sector for example, those of us that have been immersed in this sector know there are a number of individuals that openly ‘sell’ their opinion to willing vendors and leverage their voice and opinion as neutral journalism. Brands that target these influencers may find themselves on the wrong end of this dialog.

In short, don’t assume for one second that people or groups that influence the social behavior on these networks are ‘neutral’ and merely reflect the opinion of the community. They may be representing a paid endorsement masking as a ‘neutral’ opinion!

Ryan Mathews
Guest
5 years 8 months ago

As Max notes, targeting influencers has always been a good business — provided of course you are targeting the REAL influencers and not someone you think ought to be an influencer.

Size of social network seems an odd metric. Don’t slavish followers also have large networks?

Mark me down for a seat in the “Still Skeptical” section when it comes to Klout, at least for now.

Joan Treistman
Guest
5 years 8 months ago

This past Friday at the Market Research Council luncheon someone raised this very question of the Panel who represented major marketers. None of the three (Cosmetics, Financial Services, Cleaning products) used Klout or found this approach viable for their companies.

Who are these people, what do they buy, how do they influence, and for which categories is this relevant? Until these answers are known it’s a bit like throwing “stuff” against the wall to see if any of the “stuff” sticks.

Ken Lonyai
Guest
5 years 8 months ago

As the other commenters have pointed out, Klout does not do away with the financial interests of influencers, so credibility has no Klout score. The article stated “For businesses, identifying and connecting with influencers has never been easier than it is today.” Really? Real influencers are hard to reach no matter what public social profile they have.

Finally, Gilt Groupe is very clever — likely their real target isn’t the truly high Klout scorers, rather, the wannabes that are already in the company’s target audience.

Doug Garnett
Guest
5 years 8 months ago

Studies are already pretty clear that so-called influencers in social media aren’t going to be effective for marketing of retail products.

So, no value at all, really.

Joel Rubinson
Guest
5 years 8 months ago

The social media data I’ve analyzed leads me to agree mostly with the Duncan Watts hypothesis, which is contrary to Gladwell … that is, people who are influencers in one area tend not to be influential in another. As such, a generic influence score is likely to be of minimal value. In addition, I have some skepticism about Klout, where one person can have 10x the reach of another but the Klout scores are hardly different. Massive numerical compression there…hmmm.

Jonathan Marek
Guest
5 years 8 months ago

People do all kinds of things to get discounts. That is my concern about this. With stronger incentives to have a better Klout score, you change the nature of the “social” interactions. In the end, you may end up with influencer scores that aren’t reflective of actual influence (i.e., ability to drive incremental sales) and you may be paying real cash money to the so-called influencers for the privilege.

Tim Callan
Guest
Tim Callan
5 years 8 months ago
I have long been a big believer in influencer marketing, a term I originally learned from Regis McKenna in his groundbreaking marketing book “The Regis Touch.” The idea is that not all people are equally important in terms of shaping a market’s overall perceptions, and that if we target some identified “influencers” we can get much more leverage for our marketing dollars and effort than if we just blast everyone equally. In the years that followed, Regis McKenna’s concept has been well proven out, time and again. There are influencers all over the place, and different types and degrees of influencer. And influencers for different markets, market segments, geographies, and subcultures. In fact, if you’re participating in this forum at all, you’re an influencer in the segment of North American retail professionals. That’s great for a marketer who is targeting that segment. But it’s worthless if you’re trying to get millennials to download the latest cool interactive iPhone app. Do these influencers use social media? Of course they do, to the same degree that the… Read more »
Camille P. Schuster, PhD.
Guest
5 years 8 months ago

My definition of most valued customers has always included influencers. They can be extremely important. Defining influencers depends upon the product category and type of customers and is not necessarily useful in isolation. However, those people who talk positively about your product or service are important to you and should be treated well.

Ralph Jacobson
Guest
5 years 8 months ago

The challenge is the metric. Klout takes into account some, but not all critical aspects of a person or business’ influence in social channels. The number of followers on Twitter is not, in itself a metric of influence. Especially since you can simply sign up with a free app that gets you as many followers as you want. The issue here is quality of influence that you have in the social marketplace. Are the people whom are listening to you throughout the social channels your target audience? Is there a true conversation going on out there, or simply “pushed” posts/marketing/selling of yourself or your “stuff”?

There is value to be had, and there are some good examples out there. If you manage your content that is posted in an effective manner, targeting influencers, true influencers, is a great thing to do today.

Doug Garnett
Guest
5 years 8 months ago

Research shows that social media influencers have little impact — one study calling it the million follower myth.

Perhaps the biggest risk in pursuing social networks is the incredible waste of company attention required to achieve even the most insignificant results.

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