Today, Community software provider Lithium Technologies, announced they are to acquire Klout for an undisclosed sum. The acquisition adds further fuel to the argument that the addition of context to a community is critical to enable an ongoing relationship with customers, partners and suppliers. Joe Fernandez, Klout CEO, will join Lithium’s executive team, reporting directly to Rob Tarkoff, and will continue to run the Klout operation as its General Manager and a Senior Vice President at Lithium. All Klout regular employees are also expected to join Lithium. The intent is to integrate Klout as quickly as possible into some target use cases particularly in strengthening customer profiles and to help drive appreciation of customer loyalty behavior.
Since its inception in 2008, Klout has worked to build an algorithm to illicit the influence score (out of a total of 100) of an individual across a number of social media networks. Initial market skepticism of this influence scoring mechanism isolated the conversation around the value of Klout from a reputation and relevance standpoint. This is because "influence" cannot be accurately measured across a broad and horizontal set of social media assets. That said, the premise of understanding influence in the broader, more organic business network is still relevant to a company, it just needs to also have relevance and reputation associated to it in order for a company to shape the future of their business. Measuring activity alone doesn't account for the reputation and relevance that a user may have in a particular community, but through connecting Klout to Lithium's customer and brand communities, reputation can be founded on additional behaviors exhibited in the community such as relevant posts, explicit comments and additional organizational role based profile information. In other words, in the realm of reputation context is a key element, missing from the Klout influence scoring system, but provided through the integration into specific Lithium communities.
Over the past year Klout added two new features to diffuse the discussion couched in influence. Klout Content and Klout Perks. The former is a revamp of the existing Klout dashboard that helps surface relevant information to a user based on the networks they have added to Klout. Through customized topics and what appears to be a popularity-based algorithm, Klout signaled that it was moving into the content syndication space. By displaying a more interactive and engaging view, the intent for Klout was to encourage users to spend more time with content on the Klout platform. The latter "Klout Perks," is a vehicle for companies to give promotions to people (potential "influencers") they hope will tweet about them; and also data licensing deals with Microsoft's Bing and others.
The initial themes targeted by Lithium technologies following the acquisition include the enhancement of a user profile in a community site, where a Klout score is able to be tagged to any given user in a community to determine reputation of an individual in a community rather than just activity; focus on customer service and bundling Klout Perks to enable users to thank peers or external communities; and VIP and advocate communities, that operate as a lightweight event or time bound driven community that helps bridge the gap for companies that may have a number of different communities (i.e. customer, brand, partner, etc). These lightweight communities could also be supported by Klout Perks in a campaign management style engagement model.
Customer service communities were the initial marquis use cases for communities but as we have seen the value of connecting across numerous business environments come to the fore, complexity of customer service requires quick insight into a customer's behavior. However, the ongoing relationship between a customer or partner and a company will go through continuous relationship validation. The IDC social business survey from February 2014 supports this notion with the top business priority organizations are targeting being "Connecting with customers". This is cognizant also of the shift we have seen take place in the market in the move from a more passive responsive type behavior into a more proactive and conversational engagement with customers and partners. In addition, companies are looking to simplify web properties, but also enable a customer to have a seamless and ubiquitous experience across every community they are exposed to from that company or brand.
During the course of 2014, IDC predicts that social technology-based customer communities will become a standard - and strategic - component of virtually all customer engagement and marketing strategies. IDC also predicts that by 2017, 80% of Fortune 500 will have an active customer community, a big jump from 30% today. The overarching value in this transaction for Lithium technologies is to gain a better understanding of each user profile through the addition of the context provided by Klout. With more and more customers and partners wanting to target a consolidated and consistent brand experience, the importance of connecting not only people and their profile behavior but data and information all together in a single pane of glass may help fine tune how organizations are able to target all future potential customer interactions.