How Much Social Currency Does Your Brand Have?
What is social currency?
Social currency – also known as social capital – is essentially ‘stuff of value’ that gets passed around between brands and consumers (or between consumers and consumers). It’s the intangible worth associated with a specific brand or person, hence the ‘social’ slant.
Imagine coins that aren’t money, but units of knowledge and information, connection and belonging, identity markers and success symbols… Or even plain old usefulness and convenience. Like cash, social currency is hard-earned and spent only in trade for something perceived to be of equal value.
A person ‘spends’ social currency when they say or do something that could impact their social status – which means pretty much anything. So, for a consumer to spend their social currency on a brand, they have to be pretty confident it’s going to reflect well on them.
When a brand has lots of social currency it means information about that brand is being passed around (or ‘spent’) often by consumers as part of their everyday social lives. This could be in real life or – increasingly – on the internet in the form of conversations, recommendations, stories, posts, shares or likes.
John Berger summed it up when he said brands must “Give people a way to make themselves look good while promoting their products and ideas along the way.”
Why does your brand need social currency?
Research shows 53% of all brand loyalty can be explained by social currency and there’s a 73% correlation between high social currency and charging a price premium.
That’s because exchanging social currency helps you build a stronger relationship with your customers. By adding value to their lives beyond the literal product or service you provide, you foster an emotional connection. Aside from boosting loyalty, feeling connected encourages increased spending with your brand and higher perceived value of your product, coupled with reduced price sensitivity.
This relationship is reciprocal. It also allows you to get to know your customers better, which feeds valuable insights back into your marketing and product development. As Vivaldi Partners points out, “the model of building social currency is centred on interaction, collaboration, conversation, and co-creation.”
Social currency burns a hole in consumers’ pockets. They look for opportunities to spend it, because doing so can enhance their reputation. Doling out social currency is an unbeatable way of turning customers into advocates, because it provides fuel for word-of-mouth marketing. This increases your brand’s sphere of influence and boosts organic growth.
Ultimately, social currency makes your brand more valuable to consumers – and, by default, the retailers trying to capture their attention. A surefire way to increase your brand visibility and market presence, too.
53% of all brand loyalty can be explained by social currency and there’s a 73% correlation between high social currency and charging a price premium
How do you increase your brand’s social currency?
Social currency is about more than generating buzz: it’s about creating meaningful experiences around a brand. That means providing at least one of these benefits to your customers:
- Affiliation – Foster a sense of community among your customers
- Conversation – Engage in the conversation around your brand
- Utility – Create value for your customers, while helping them become more socially relevant
- Advocacy – Encourage brand loyalty so your customers recommend and defend your brand
- Information – Give your customers valuable and shareable information
- Identity – Provide your customers with their own identity in a group
The more benefits (or added value) you offer, the more your social currency will grow.
Deciding which benefits to focus on depends on the needs of your ideal customer, along with the mission and values of your brand.
How can reward promotions boost social currency?
Rewards transform your sales promotions into an opportunity to print social currency (excuse the pun), because their whole premise is adding value for your customer.
The experience economy tells us 67% of consumers would rather spend their money on experiences than material things, partly because they form a more meaningful part of our identity and are a more effective tool for social bonding. So, offering an experience as a reward for purchasing your product can tap into Affiliation, Conversation and Identity.
When you create a reward that complements your product or service, it transforms a transaction into the promise of a certain lifestyle. Not only does this offer greater value in consumers’ eyes and helping them become more socially relevant (Utility). Actually using your product or service in the context it’s designed for gives customers valuable and shareable Information, promoting Advocacy.
An easy way to boost your social currency is to create a reward that requires active engagement on social media as part of the purchase process, encouraging Advocacy even further. A double bonus is that the element of gamification also encourages Conversation.
Want to learn more about how creative rewards can grow your social currency?
Book a free consultation today.