Why Paying Attention to Klout Could Be Bad for Business

By Todd Carpenter, Director of Digital Engagement, National Association of REALTORS®

Does anyone remember the first time you heard the term “FICO Score?” You know, that number, determined by some fancy computer algorithm, that determines how likely you are to pay back a loan on time? What was the first thing that came to mind after FICO was explained to you? Come on, be honest. It was, “I wonder what *my* FICO score is.”

kloutWhy do I bring this up? Well, there’s a new fancy computer algorithm out there called Klout that’s starting to grab the attention of many online agents. Here’s their elevator pitch:The Klout Score is the measurement of your overall online influence. The scores range from 1 to 100 with higher scores representing a wider and stronger sphere of influence. Klout uses over 35 variables on Facebook and Twitter to measure True Reach, Amplification Probability, and Network Score.

I know what you’re thinking right now. It’s okay. Go ahead and check your own. What was it? Mine is a 60. That sort of sounds like failing to me, but it’s apparently well above average. I admit that the idea of being able to assign an influence score to an online profile is an idea I find interesting, and I occasionally find myself checking my own score. But as much as I like the idea, paying too much attention to this number or using it to identify people you should network with is really not a good idea.

Going back to FICO, we all know it’s just one small factor in a borrower’s financial health. Job history, income, down payment, and reserves all play into an underwriter’s stamp of approval. No one gets a loan based solely on their credit score. Remember when we tried this? It didn’t work out so well, did it?

Klout tells even less of a story. It measures a person’s personal Twitter, Facebook, and LinkedIn profiles to calculate its number. Then it looks at how often other “influential” people react to one’s comments on these channels. In other words, it gives high scores to people who talk to each other a lot online.

To me, that’s the problem: People who spend all day talking to each other online aren’t necessarily people who can help you pay the bills. At the local level, there are really influential people who are way too busy to spend a bunch of time online. Who is it that you want to network with? The “Internet famous”? Or people who can actually help you do some business?

Klout is kind of fun to play with, and I can even see how brands like Coke or Ford might use it. But it simply isn’t meaningful enough in a typical real estate agent’s sphere of influence to matter.

Update – Two great posts for additional reading. Jeff Turner explains how he gamed Klout and  Matthew Shadbolt discusses what it really means to be influential.

Todd Carpenter

Todd Carpenter, Managing Director of the Data Analytics Group at NAR I'm a twenty year veteran of the real estate and mortgage industry, focusing on technology that fosters relationships between professionals and consumers. I am a subject matter expert in data analytics, online consumer trends, enterprise social media strategy, listing data, agent ratings, and public facing MLS portals.

More Posts - Website - Twitter

  1. Like many online ranking or valuation sites, there can be a discrepancy in what value to place on someones “reach” to their audience. I’ve seen people that post ( in my opinion ) a TON of CRAP and simply reply to many “influential” people in order to try and raise their Klout score. Unfortunately, it might work.

    While I agree that it is a waste of time to sit around and chat online all day, I have seen some very good agents with pretty good scores based on sharing relevant information with their sphere.

    I don’t give Klout much of a thought at this point but it is kind of fun to check once in a while. I also believe it will be interesting to see where they really go with rewards based on Klout score for people who “check in” at a restaurant, store, casino etc.

    I don’t really see an agent touting their Klout score at a listing appointment, yet. 🙂

  2. “People who spend all day talking to each other online aren’t necessarily people who can help you pay the bills”

    Bravo, I my industry social participation has been getting refined. I like hanging out with my RE.net friends, but I also sell houses. I sell a lot of Short Sales and REOs and they take time and energy.

  3. “People who spend all day talking to each other online aren’t necessarily people who can help you pay the bills.” Perfectly said!

    I can see huge enterprise level uses for Klout. But I tend to agree with you that at the local agent level, this isn’t a relevant number. Now if this were an industry whose job required them to be in front of a computer most of the day to accomplish their work – maybe a different story.

    I do think it’s important to at least have a number, to show some relevancy and that you are somewhat up on online marketing venues like FB and T. But no need to rock it out of the park. And yes, I know there are exceptions to this – but just saying as a whole…

    See you in SFO I’m sure!

  4. Todd, totally agree. I’ll go one step further and say that Klout is 100% meaningless. Here are just two vectors on which it is ridiculous:

    1.) Klout uses 35 social media variables. While that may seem impressive to the statistically challenged, the reality is that the more variables and the more complex the algorithm is, the more meaningless it is. Imagine trying to create a “U.S. citizen happiness” score by using 300 variables. Take the cost of ice cream, divided by the percentage of people who are not lactose intolerant plus the number of homeowners divided by the median income required to qualify for homeownership minus the unemployment rate, plus the cost of a Netflix subscription, minus the average cost of a box of chocolate chips cookies, divided by the number of times your car goes into the repair shop multiplied by the average repair bill, minus the number of times your kids break a household item divided by the number of negative stories reported on the evening news plus the average number of pairs of shoes owned by adult women……. you get the idea- the more items you throw into the soup, the less meaningful any sort of “number” is that you get out of it. If your Klout goes from 60 to 61 because 2 additional people re-tweeted you…. SO WHAT? What are you going to do about it? Tweet more? Stop tweeting about your breakfast? I don’t need a Klout score to tell me what I’m doing right or wrong. If your Klout score goes from 60 to 59, SO WHAT? I’m not going to think, “Oh no, I need to tweet at least five additional retweetable tweets today!” If that is your thought process, you’ve got your eye on the wrong ball as a realtor, that is for sure.

    2.) One more way in which Klout is just silly: It can’t measure your worth, value, or skill as a professional. You could tweet one lone tweet per week, and if that one tweet led to 5 successful transactions, Klout will never, ever know.

    Bottom line: Klout doesn’t measure anything worth measuring.

  5. Nice analysis, Todd. Klout may measure how engaged you are on certain channels online, it is far from the first place I’ll go to find the decision makers out there. Good for determining variables of amplification, but I’d leave it there.

  6. Todd,

    Like any Social Media or Internet Marketing, every tool has its use. I wrote a book on Communication [(7L) The Seven Levels of Communication: Go from Relationships to Referrals] and it is decidedly much more high-touch than high-tech. With that said, Klout is a score I review and contrary to what Nick Bastian says, I use my Klout score in EVERY listing appointment…

    Mr. and Mrs. Seller, what have you heard about using the Internet to market houses for sale?

    “Well, we use the Internet to look for homes and we’re sure others do to.”

    So you would agree that the level of influence your real estate professional has on the Internet will help you sell this house?

    “Makes sense to us.”

    Yes. Well, luckily there is a service that you can not pay your way to the top and it establishes Internet influence – things like Twitter, Facebook, and LinkedIn. Please write this down. One of the questions I want you to ask the other professionals you interview is, what is your Klout score (and that is with a K, K-L-O-U-T dot com)? This is a beautiful question because 1) if they don’t know what it is, you can instantly eliminate them, 2) when they tell you, you can instantly compare influence, and 3) please write this down – mine is 78 and rising steadily. They say 20 means you are out there and over 50 is outstanding. What’s nice is that with one question, you will get a feel for their Internet savviness, which as you said before is important to selling your home.

    What is funny is that the higher your Klout score goes, the more important it becomes to you. So Todd, when you reach 70 (which will be soon I’m guessing), please let me know what you think about it – and also, tell me you won’t put it on your resume when NAR is looking for a President of Digital Engagement (haha).



  7. I’ve never been a big fan of “ask other agents you interview this….”. I prefer to demonstrate my expertise as opposed to highlighting others short-comings.

    And I don’t believe a Klout score demonstrates squat. If a freaking number derived from an algorithm.

    You can’t pay your way to the top of Klout, but you certainly can Tweet your way to the top and get together with your buddies and +K your way up.

    If Klout score really is an indication of ability to sell real estate, then we better all hope Ashton Kutcher and Justin Bieber don’t decide to enter the business… The Beeb has Klout!

  8. I liked everyone’s comments – I’m going to +K all of you! But seriously, the FICO analogy is a great one. There’s a lot more that goes into social media networking than can be measured by an algorithm. I like the novelty of Klout but it can’t be taken as the all encompassing way to measure effectiveness.

  9. Hi Michael.

    It’s arguably different for agents but, even if I believed in the number, I would never list my Klout score on my resume. As I said earlier, Klout measures people’s *personal* social profiles. My role at NAR is build their online influence, not my own. If I were to interview a social media consultant to help me with my work at NAR and they used their personal profiles as the primary evidence of their capabilities, they wouldn’t be getting the job.

    This also highlights another major flaw with Klout. There are tons of people like me, working for big corporations with large online audiences. Those people have considerable online influence that goes completely unmeasured by Klout.

  10. As an *innocent* bystander here, i.e someone who doesn’t sell real estate for a living, but occasionally will occupy the shoes of a home buyer and home seller, if I may… , Michael J. Maher, that check my and my competitors’ Klout score is the silliest sales pitch I’ve ever heard. I sincerely hope that while you may choose to use it as a sales tool till the next shiny object hits the market at any rate you don’t actually believe in what you just wrote…I hope you don’t think Klout actually measures how savvy someone is when it comes to online marketing, unless you also believe your stock at #Eav is indicative of your real life portfolio and financial worth and your Farmville endeavors put actual food on your family’s table.

    To illustrate the very meaningless number that is Klout, mine is 57 and I am apparently influential about real estate and money of all things. I know very little of either.

    Tod – good post, Sir:-) Can you now go and +K me, +1me and do any other bloody thing out there I might need for a future resume…

  11. Great Stuff Todd! Loved this piece in the post …. “No one gets a loan based solely on their credit score. Remember when we tried this? It didn’t work out so well, did it?”…..

    Now. if you can just give me some tips on how to increase my Klout score at home I’d appreciate it. Its still sitting at 2 with Michelle and the Kids.

  12. The only thing my Klout score has gotten me is free Cover Girl make-up. That would have been cool, but I don’t wear green eyeshadow or bright pink lip gloss. I’ve been uber busy lately and have not had much of an opportunity to log on to social media sites. My Klout score has gone down. However, I’ve received 5 referrals from collegues in that same amount of time. If you need some fancy algorithm to tell you how influential you are or that you are a rockstar in your field, then there are probably some other issues you need to work out. As for me and Klout, I don’t see the point in the system and I don’t need any more free make-up I have no intention of wearing, except maybe on Halloween.

  13. I agree with all of you.

    It is so easy to say Facebook, Twitter, Klout, EmpireAvenue, Google+, Web sites, blogging, and every other online tool doesn’t sell homes, doesn’t help business, and is a waste of time. And yet… it is so easy to say they do sell homes, help business, and are a good use of time. Therein lies the veil of ambiguity we see with all online activities. They all have their strengths and weaknesses. Today, a conversation about Klout led to a chance interaction with Mark W. Schaefer which led to my purchase of his book The Tao of Twitter. The ONLY way that transaction happens when it did is because of a Klout conversation (Mark Schaefer has a high Klout score AND has a lot of influence online as well as offline).

    Listen, I am not here to convince anyone of anything. Most people aren’t open-minded any way especially after writing it – they tend to want to remain consistent to that post with their next posts even if they weren’t that convinced they were right in the first place.

    Jay, just for clarity’s sake, I didn’t say anything about anybody else’s abilities or admonish anyone. I would never do that. If someone came in with an 80 on that question, it would just be one more piece of information for the seller to use to make the all-important decision of who works with them to sell one of their largest investments. It would be ridiculous to think a seller would choose one over another just because of one thing.

    Todd, if you were to write a positive article about Klout, what would it be about? You could focus on the fact that it does measure “something” and it does have “some purpose”. Is bowling worthless? Let’s ask Klout what they think. Is there a purpose to grading tests and quizzes in school? I’ve improved at Social Media due to my Klout experience.

    On your resume point… there’s your next article – how to hire a social media consultant. If you were to hire someone to assist you, what would you look at? I’d read that! To your point, I would guess that you would have to consider individual versus company Klout. If someone worked at Mashable and the company score was 88 (which it is – and I would say most would agree they are influential online) and their individual score was an 18. Wouldn’t that beg the question?

    By the way, I didn’t say that my entire LA was this dialog and certainly didn’t mean to imply it. Most of my listing appointments consist of me meeting the sellers at my office to sign the paperwork for the listing – I get over 500 referrals per year and average over 200 transactions per year. There really isn’t a “listing appointment”. It’s a “we need to sell” followed by the reply of “come on in” and then we work our butts off to get the home sold and help them achieve their goals.

    It is what it is. If it is all stupid, why do any of it at all – Facebook, Twitter, Google+, etc.? Well, become there is interaction, it does lead to offline conversations and business, and it is just plain fun sometimes. If it is becoming obsessive, that’s bad – about anything. If it is getting in the way of work, family, health, etc, that’s not good – about anything.

    Love you all and wish only the best for you – Jay, I wish you the best at not working with buyers and know you will enjoy the new-found freedom that gives you to work with your agents as clients.

    If you knew me, met me, and had a conversation with me, I truly feel we would both enjoy the interaction so I don’t want anyone to feel any other way than to like me. I like you. I ask that you like me. At least until we meet and then if you don’t like me, that’s okay. You’ve based your opinion on far more than one strand of Comments about something as irrelevant (in the grand scheme of life) as Klout. 🙂 Klout IS important – to those who feel Klout is important.



    P.S. Anyone going to see the last Harry Potter movie this week? 🙂

  14. Oh my gosh….too funny….great stuff for a Friday. I’m going to mention my Klout score to the next person who inquires about an interest rate or tells me they want to buy a home after having just foreclosed on their home last week.

    As best I can tell, Klout tells me that a person is connected to a lot of other people online socially where 70% of those tech savvy people probably live in other states and who have little influence on the typical home buyer in my town.

    I’m not real familiar with Klout, but does it measure how connected you are to people in your actual field? What if you have an 80 Klout score and not connected to other Real Estate agents locally?

    Maybe Klout should have an area where you can punch in the number of people you network with, hand your biz card out to, or how many people are in your email database etc…. in order to get a better understanding of your level of influence offline as well.

    I wonder if those with high online Klout scores would have low offline Klout scores or vice versa?

    Jay posed a very interesting scenario, what if the Bieb really did get his real estate license?

  15. MIchael Maher, you are so off base on when it comes to Klout, the score means bupkis. just because one has a high score doesn’t say anything about the quality the content they provide or their abilities to get the job done.

    I hate to break it to you, but your site is very infantile in its design and content. One thing that your site says to me is that you’re in need of 3rd party validation, all those awards you have posted on your site say nothing about your ability to get the job done.

    Social Media isn’t about telling everyone how great you are or how active you are on-line. It’s about engaging and interacting with people. When you provide quality content people will come to know how knowledgable you are in your field. Provide the information people are looking for and they’ll find you.

  16. It looks like a fun novelty way of finding out a person’s online social ranking, but probably shouldn’t be taken any more seriously than a “Discover your ‘hot babe’ score” quiz that women’s magazines put out. What really gives professionals an online presence is offering quality information and services.

  17. I’ve been thinking a lot about Klout lately partly because I’ve been getting notifications that people are either giving me a plus K or adding me to a Klout list. I personally don’t care about my klout score because I feel that algorithmic calculations can be manipulated. Reminds me of black hat SEO techniques, but its nice to know some people have taken notice of me as of late and I didn’t have to ask for it. I do like the concept of true reach (which shows how many people I might be able to influence) as this concept can be explain to a seller where the promise is to expose the home to as many influential people as possible. Example: if I am a local agent, with a local following of other agents, actual buyers, a seller might decide for him/herself that my internet presence/activity is reason enough to hire me over the next real estate agent. They might make the conclusion that my reach may result in a quicker, smoother, a more money sale (it would be better if I could show them a real life example). Even still a seller that engages on twitter and facebook (maybe a business professional) might agree with this value example. The reason question for me is whether or not a high klout score will ever help me sell more houses. Only time and tracking will tell. I have certainly had referral opportunities because of my reach. Good discussion overall. Thanks Todd for sharing!

  18. Bravo Todd! I couldn’t agree more. My top influenced list is made up primarily of agents from my office. I surely won’t be selling them houses no matter how high my Klout score reaches. And those agents that present Klout as qualification on their real estate resume will only win the listings of those who would fall for any smoke and mirrors techniques. I’ve seen agents suggesting you share your Klout score, and that of your competitors with potential clients. I have a novel idea! Why not share your sales history and your competitors so the client gets a real picture of your success.

    I’m tired of agents posting silly questions on facebook in hopes of illiciting lots of responses to improve their Klout score. And worse yet, those agents that band together to “like” and “share” eachothers items. Seems like an endless loop of nothing to improve a score that is useless…or at least how they are using it.

    I’ll continue to focus on SEO and keep my eye on maintaining those top 3 front page google slots, thank you very much.

    Oh and you will not see me on facebook asking everyone if they are having ham or turkey for Christmas. Cause quite frankly my dear…..

  19. As you mentioned Klout is really just one piece of the overall puzzle. I do like to take a look at where I’m at with Klout because it gives me a general snapshot of where I’m at across multiple social channels. In the end it’s just one of many tools that I use.


  20. I am sure that many have benefit from Klout, it’s not easy to keep up with one conversation, just imagine all those voice in your head talking and asking questions.