Better Start Watching Your Klout Score

Chris Selland is a Boston-based technology industry analyst & startup executive.  Currently, he is an Expert Advisor for Focus Research and blogs at www.sellandcapital.com.

I’ve been writing about Klout and the broader topic of social scoring for a while now, but after last week’s piece in the Boston Globe, the level of consumer awareness of the site has stepped up dramatically.

What is Klout? In short, it’s an algorithm that assigns anyone (or anything) owning a Twitter handle with a Klout score (i.e. a number) indicating their level of online influence. The idea is to measure how frequently one’s Tweets and other online activities influence the activities of others. In theory at least, when someone with a high influence score speaks, people listen – and act – not unlike a modern-day EF Hutton.

The idea is that this Influence score replaces cruder, less useful, and easily-gamed metrics – such as Twitter followers. By concealing the details of precisely how someone can improve their Klout, the company has made the system much less vulnerable to the type of gaming that goes on with Twitter followers (i.e. ‘you follow me and I’ll follow you’ – even if neither of us is actually paying attention).

While the focus of the Globe’s piece, and most of the attention Klout is getting right now, is around consumer vanity (“This guy is cute but his Klout score is pretty low – should I date him?”) the concept is much more powerful in a business context. For instance, Klout is being used by marketers to determine which customers have the highest level of influence, so that they can target their efforts accordingly.

During the Consumer Electronics Show in January, the Palms Casino Resort in Las Vegas hosted an event with free food and chair massages for guests with good Klout scores. When Disney debuted the movie “Tangled,’’ it asked Klout to find 500 mothers for exclusive Klout screenings and sent their children a “Tangled’’ kit with merchandise.

As these influence scores get integrated into CRM and other customer-related systems, companies will gain the ability to make fast and smart decisions on which influential customers to steer their attention to – both from a marketing and customer service perspective. This is a huge opportunity which has the potential to turn the entire CRM market on its ear, and companies like Salesforce.com ($CRM), Oracle ($ORCL) and RightNow ($RNOW) should be, if they’re not already, integrating these capabilities into their platforms ASAP. Some vendors, such as Assistly, have already done so.

Just as the credit industry has used FICO scores to reinvent how companies grant credit (which is how those instant approval decisions are made), influence scoring will become the way customer care is granted. The next time you’re on hold with someone’s call center, there’s a decent chance your Klout score will determine how long you’re on hold (or not).

Former Forrester analyst Augie Ray recently wrote a great post suggesting that ‘Influencers’ (and hence Influence Scores) are overrated – and makes some very good arguments along those lines. But overrated is not necessarily irrelevant, and there’s no question that targeting influencers is a significant trend and at the core of many if not most corporate ‘social’ strategies.

It’s early days – and Klout is not the only game in town – but whether it impacts your dating strategies or not, Klout bears watching.

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