Identifying the Elusive Influencer

And building programs to best leverage your most influential customers

Most companies internally assign a value to their customers that predicts how much money the customer will spend in the future, otherwise known as 'Total Customer Value' (TCV).  Conventionally, the best way to determine a customer’s TCV is to look at how much they have spent in the past: United Airlines gives its best customers frequent upgrades along with a special express line, free drinks, and no charges (and higher priority) for checked bags.  This is because these customers have spent a lot of money with United in the past which is a very good predictor that they will spend a lot of money with them in the future.

While calculating TCV from historical spending is simple, doing so does not value the customer based on the number of people they’ve told about your product and the resulting money these people spend.  Yet people who convince others to buy your product can be more valuable than big-spending customers.

If Walt Mossberg — the technology columnist for the Wall Street Journal — buys your gadget, he's likely to be your most important customer for years even if he never buys from you again.  Mossberg's true TCV should be off the charts!  Mossberg is an example of an influencer.

Influencers are a small group of customers that have the potential to act as evangelists of your product.   In cases where these influencers have bad experiences, they might actively tell people to avoid you (or actively protest your company).  

Companies that understand the power of influencers are now proactively targeting them.   FastCompany reported that marketers spend over $1 billion annually on campaigns targeting influencers – a figure growing 36% a year.  But few companies have any idea who their influencers are and what to do once they have found them.

Identifying Influencers

Determining who is an influencer isn't easy.  Anywhere from 1% to 10% of your consumers are influencers.  Below are some of the metrics Rapleaf uses to find influencers for our customers:  

1.)    Friend count.  Someone with a lot of friends (online or offline) is more likely to be an influencer since they have more reach than the average person and can propagate their message to influence more people.   People with many Twitter followers, readers of their RSS feed, friends on Facebook, or interactions on forums are all good candidates.  While friend count is certainly a crude metric — there are many people with a large number of friends that are not influential -– it is a quick and easy way to segment your customers and it actually works quite well.

Last year, we conducted a study on 31 million people analyzing friendships on social networks. Results of the study suggest that almost 20% of users had over 100 online friends, while a tiny fraction of users (<1%) are “super connectors” with over 1,000 friends.   Imagine the reverberating effects of mobilizing these people.  These are the customers you’d want to target with exclusive offers, benefits, etc. 

Friend count analysis

 
2.)    Social persuasion.  Let's assume John says he loves an obscure band on his MySpace page that none of his friends talk about.   Then, two months later, 30 of his friends also list that band as one of their favorites.  While it’s possible that John is an early adopter or that he just happened to listen to the band before they made it big, it’s much more likely that he is an influencer and told his friends.

Unfortunately, measuring social persuasion is not easy and can be quite expensive from a data-collection perspective.  One way to gauge persuasion is to take snapshots of a person’s information at periodic intervals. By juxtaposing changes in information (such as music interests) alongside a  social graph (who he is friends with), one can infer whether the person under consideration is influencer or more likely to be influenced.  If a bunch of your friends buy the same product as you in the next few weeks after your purchase (which might be a six sigma event), there is a strong likelihood that you told your friends about it.

3.)    Influence context measurement.  Just because someone is an influencer in books doesn’t mean they are also an influencer in electronics.  Matt Hurst of Data Mining blog looked at the categories of influence in the blogosphere and found that influence is a function of not only reach but also subject matter.  Looking at the linking of blogs, Hurst found that Om Malik, for instance, has reach in the tech space, whereas Michelle Malkin has reach in the socio-political arena.  On the other hand, Jeff Jarvis is influential on both tech and socio-political issues.  Since influence depends on both reach and context and all three of these bloggers differ on both fronts, they are influential in different ways.

Blogsn

Some people will always be influencers – it is part of who they are – while others are influencers due to their current position (careerwise, within an organization, etc.).  And that position might not be obvious.  One wouldn't think of a personal assistant as being an influencer but Reggie Love talks to the most powerful person in the world twenty times a day -– he is President Obama’s personal assistant.

OBAMA-REGGIE-LOVE-large

 

Influencers = $$$

After identifying influencers, how can you encourage them to promote your product? Here are some suggestions:

1.)    Give them the best service.  United Airlines provides frequent flyers with a special number to call and an exclusive web site to shop at.  American Express offers their big spenders a distinct credit card with incredible perks including a dedicated concierge and travel agent, a personal shopper at upscale stores, first class flight upgrades, and no preset spending limits.  You can do something similar with influencers.

You can put your influencers at the top of the customer service queue.  Or have an executive personally call and thank them for being a customer.  Retailers might consider sending hand-written "thank y
ou" notes or providing priority shipping free of charge.  In turn, influencers will tell their friends about you.

2.)    Show appreciation.  One way of making customers feel appreciated is by asking for feedback. Before finalizing a new product, get input from your influencers.  Bare Escentuals does this for new cosmetic products.  If you’re not soliciting feedback, at least give them sneak previews to new products.  In return for showing appreciation, you can leverage focus panels and get critical input at no cost.

3.)    Offer coupons and special discounts.  Providing coupons and special discounts is a proactive form of customer service and marketing.  Retailers can offer their top influencers unique promotions to keep them content and engaged. 

4.)    Employ special outreach.  Rather than just sending influencers the standard newsletter, some political campaigns have interns reach out to influencers directly.  Cultivating influencers give campaigns significant leverage to spread positive news about their candidate (and unflattering profiles of their opponents).   Companies should follow suit to nourish their own evangelist network.

Now all we have to do is get companies to wake up and smell the coffee.  Anyone willing to influence them?

 

(special thanks to Vivek Sodera and Michael Hsu for their help putting this together)

13 thoughts on “Identifying the Elusive Influencer

  1. Ryan Graves

    Auren-
    This is good stuff man. Solid thoughts. I’m going to, and would really like if you did, expand on the idea of quantifying an influencer’s power/reach. Reggie Love has a high level of contact with Obama but would Biden have more influence based on title/position? Likely. Understanding these things are subjective, it would be interesting to dive into further.
    Just followed you on Twitter & would love to connect.
    @ryangraves

    Reply
  2. Dustin Lau

    another way to find influencers is to build recommendation into your sales campaign. Give people credits for introducing new customers & give those people token discounts so they give credit to the person that introduced them.
    If there are people that hit a certain level of ‘introductions’, make them brand ambassadors, and give them further reasons to be loyal to you product

    Reply
  3. Steve Dodd

    Absolutely right on Auren! Some things have never changed but quite often it takes an industry change that brings it into the open. As a direct sales person, I need to determine influencers and leverage them as they are the only people the key buyer listens to. Now with Social Media (User Generated Content), this has become not only more important, by readily available with the advancements in tools available. It’s funny but with all of the YAK about Sales 2.0, these are some of the fundamental points that totally get ignored. But, from experience, I can tell you that the best, most productive sales organizations on the planet get the influencer concept clearly and use it every day. With the new tools available, they will gain (and are) incredible traction and likely leave most who don’t see this in thier dust.

    Reply
  4. Paul Davies

    Auren, in science, influence works differently. There are iconic figures like Feynman, Freeman Dyson, Ed Witten and Stephen Hawking, whose ideas and opinions carry weight hugely out of proportion to any objective measure of their performance (such as number of publications). The citation indices reflect this, but more significant is that if one of these people expresses an opinion or adopts a new approach to a research topic, it generates a huge bandwagon.
    Why do certain scientists acquire this cult-like status among their peers? It’s not media exposure, but sometimg more subtle. I have no easy answer, but the path of science is largely determined by the agendas they establish.

    Reply
  5. Andrew Steinerman

    I would tell you something different about online influencers with 1000+ twitter followers…. I think much true discussion gets lost in all the snappy word bites…. Can a human being really have 1000 “friends.”. Too often, richer human dialogue is substuted for tweaks.

    Reply
  6. Ben Atkins

    I worked on the Net Promoter Score concept for GE. Similar concept in internalizing the notion that customers talk/influence. We of course tried to segment out the more important customers.
    You thinking seems more sophisticated, but NPS provides a nice metric to think about how strongly customers are connected and willing to influence. And it creates a focal point for an organization to develop initiatives, etc.

    Reply
  7. Mike Derezin

    Bain has done a lot of work on an adjacent area you may find interesting.
    They call it the Net Promoter. They’ve found that the answer to one simple question – How likely would you recommend us to a friend – is arguably the best measure of a company’s prospects. Those companies with a 9 or 10 out of 10 have been shown to be more profitable, grow faster, etc
    http://www.bain.com/bainweb/publications/publications_detail.asp?id=15294&menu_url=publications_results.asp
    As I read your piece, I thought about how you could include the concept of Net Promoter (those who answer 9 or 10) as a fourth variable to determining who is a key influencer.

    Reply
  8. Danny Oppenheimer

    I agree with you that identifying and getting the influencers on your side is hugely important. And I think that the strategies you mention for identification are likely to be quite useful (although they seem to focus mostly on online social network exploitation; there may be useful other metrics like status within a company, etc.)
    But I’m not so sure how effective the methods of getting influencers to endorse your product are going to be as effective. Particularly because endorsers will know that they’re getting special service. The technology columnist who doesn’t realize that he is getting a fundamentally different experience than the average consumer, and account for that when writing his reviews, will soon lose the trust of his readership. I would think the best way to actually gain the support and endorsement of such a person would be to offer a high quality product. To the extent that there are costs associated with identifying and wooing influencers, that money might be better spent on improving the general consumer experience. (As you state, while an influencer has 1000 friends, most non influencers have a few hundred – so if you lose 5 non influencers in the pursuit of an influencer its a net loss…).
    Anyway, that’s my two cents. As always, I enjoyed reading your theories.

    Reply
  9. Paul Sack

    I am glad you mentioned negative as well as positive influencers. I have noticed that, when people talk or write about “branding,” they assume it is all positive and do not mention the possibility of negative branding. For instance, I know a company that owns and manages a group of hotel chains. When I see that company’s name on the door, I know that the line at the check-in counter will be the longest and the amenities in the room the skimpiest permissible for the quality of the hotel I am checking into.

    Reply
  10. Duncan Brown

    Hi Auren. Good post, but you perpetuate the narrow view of influencers as customers. Influencers need not be customers. When you go into a store to buy that new flat screen LCD TV you’re likely to be influenced by the salesperson, the placement of products and any deals or discounts on offer. Availability of a product is an influence, as is price. The people that control those variables are also influencers.
    Then there is a whole category of people who are external to the buying transaction such as journalists, consumer organisations, professionals and experts and so on. We are influenced frequently by real estate agents, lawyers, hotel concierge staff and many other people.
    It’s great that more and more companies are focusing on important customers, but they miss a trick if they don’t also focus on non-customer influencers.
    More importantly, it’s often easier to identify those non-customer influencers, and easier to target because there are fewer of them.
    Finally, remember that influence does not always have to be positive. Walt Mossberg is an influencer whether he buys your gadget or not. If he buys and reviews an iPhone, then he probably didn’t buy, and won’t write about, a Nokia, a BlackBerry or a Samsung. Sometimes the absence of positive influence is just as bad as overt detractors.
    Hope this is useful.

    Reply

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