By Francesca James, Social Media Manager, Fresh Business Thinking
In last month’s newsletter, social media consultant Mark Ralphs argued that influencer metrics are the ‘enemy of creativity’ and the ‘Emperor’s New Clothes’ of social media. I'd like to look at the other side of the coin and discuss how and why they might be good for your business.
In case you’re yet to stumble across influencer tools like Klout and PeerIndex, I'll explain what they are.
Both tools aim to act as a measurement of your overall online influence. PeerIndex and Klout calculate the ‘social capital’ of a person or business by using variables from social media sites such as Twitter and Facebook to give users a social media ‘influence’ score. The scores produced lie between 1 and 100, with 100 suggesting that someone has maximum influence, amplification and authority in their field.
So what has this got to do with my business?
Social media is an area that more business owners are becoming interested in and Mashable, a news source dedicated to covering digital culture, recently reported that social media is 'predicted to see one of the biggest increases in online marketing spending this year.'
When marketing your business, I'm sure that you'd agree that it would be useful to know which customers have influence on others when it comes to buying decisions. Social media offers businesses a chance to identify and target influencers and Klout and PeerIndex are useful tools to help you do this.
Azeem Azhar, CEO and founder of PeerIndex, has referred to the consultancy firm McKinsey & Co who 'reckon 20-50 percent of purchases involve a peer reference'.
Azeem says that:
'There are customers who are opinion leaders, and they tend to bring other customers with them. The marketing community is clearly interested in these individuals.'
Klout and PeerIndex are great tools for helping you find people of interest that align with your business and brand(s). At the moment, neither calculation is foolproof. However, they do offer an opportunity for you to engage with the people who are most visible on social networks and get them talking with you and - hopefully - about your brand.
What about my own influence score?
Of course, if you're planning to capitalise on the social space, your own Klout & PeerIndex scores also matter. If you want to be positioned and seen as an expert then, by definition, you should have an online presence and that presence should have a high influence score.
If you are a business owner and representing your brand, then tools like these can be helpful in showing you how active and influential you are in your own networks - for potential customers, business partners and even employees (current and future).
Real life examples:
In its blog, Klout highlights online marketplace, Addoway, as one of the first companies looking to harness a return on social media influence scores: Addoway recently introduced a feature that allowed online sellers to display their Klout scores. The logic behind this was that it believes a high Klout score translates to confidence in the seller and trust in their integrity.
According to Klout, Addoway found that ‘sellers that display their Klout score on Addoway are five times more likely to make a sale than sellers that don’t.’
Fredrick Nijm, CEO of Addoway, said that ‘Klout is valuable information because it indicates advocacy and [shows] that trusted relationships have been formed. Bringing value to ecommerce by indicating an individual’s social status will only lead to safer buying decisions, because shoppers can make more confident decisions.’
This is the one of the first examples I’ve seen of social measuring tools being used in real purchasing decisions. Of course, these scores only have the relevance and weighting that we credit them with. If we buy into influencer metrics, they will become important and will end up influencing the decisions we make on a daily basis, in business and at home.
While I believe the Addoway example is an indication of what’s to come, these metrics still have a way to go before they earn a solid place in the business and purchasing world. One issue is that they can be gamed: if you play by the rules set by Klout and PeerIndex, your score will reap the rewards.
But these tools help us see how we measure up against other people and businesses in relevant markets and I think we should welcome them: any yardstick, however clumsy, is better than none.
Francesca blogs about social media and Internet marketing at Let’s Get Social
Follow Francesca on Twitter @francescaajames
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