Why do customers choose a business over others? How come one company goes viral on social media, and others get just a few likes? Why do some people readily refer brands, while others don’t?
A new approach to customer relationships may have the answers. Social currency is one way of seeing the value businesses add to customers. Knowing how to build social currency allows brands to drive higher customer loyalty and add to social proof. This leads to more sales and referrals.
In this post, we discuss how social currency plays a role in your customer relationships. We’ll also share tips on how you can earn more social currency, and use it to benefit and grow your business.
What is social currency?
Social currency is your influence on social networks, online and offline communities, and the degree by which your business is shared by others.
Are you doing anything that stands out from the competition? Do people look to you for a specific product or service? If so, you have social currency.
A customer’s journey, from browsing to purchasing a product, is fairly straightforward. If you want to turn customers into advocates, you need something extra – that something extra is social currency.
A study by Vivaldi Partners describes social currency as “the ability of brands to fit into how consumers manage their social lives in today’s digital and mobile age.” Social currency (or social capital) applies to the relationship between your business and consumers. If your business provides information and value to consumers, it is building social capital and solidifying its position in the market.
Here’s an overview of what social currency means to individuals and brands:
Social currency of individuals
People share what they think makes them look good. In other words, they’ll only share what they believe will maintain or boost their reputation in the eyes of their peers.
Whenever a person chooses to share information, they place their reputation on the line and “spend” social currency. They don’t want to share boring, irrelevant, or misleading information because they risk losing status among their peers.
Social currency of brands
All brands need social currency. It makes connecting with customers easier. And when you share interesting content with your audience, having social currency means that message will more likely be shared with others.
When someone shares your brand, they spend their social currency on you. And if others like what they see, then the social currency of both the sharer and your brand increases.
Of course, your brand should already be trusted and relatable. But with positive social capital, it will be easier to grow your brand awareness and a stronger relationship with your customers.
Social currency and brand loyalty
In the Vivaldi Partners study, social currency was shown to help drive brand loyalty. Brands with high social currency are also able to command premium prices.
Think about Apple. By building its social currency, the company doesn’t just lead smartphone sales by volume. It also commands a premium. Apple is able to charge some of the highest prices for its products, without any dip in its brand loyalty. The majority of Apple customers are loyal to the brand, and are always awaiting the company’s next release.
Similar to word-of-mouth marketing, social currency is a means to an end. You don’t just want customers to talk about your brand. You want them (and their friends) to buy.
The dimensions of social currency
How can you build social currency in a way that also drives revenue? Building social currency entails providing at least one of the following dimensions (or benefits) to your audience:
- Affiliation: Offering a sense of community among your customers
- Conversation: Engaging in the conversation around your brand
- Utility: Creating value for customers, while helping them become more socially relevant
- Advocacy: Developing strong brand loyalty, to the point where customers will recommend (and even defend) a brand
- Information: Giving valuable and shareable information
- Identity: Providing customers with their own identity in a group
When planning your social strategy, keep these six dimensions in mind. How can you provide greater utility? What’s a better way to engage with your audience?
If you can add a dimension of social currency to every interaction with your customers, it will help you deepen your customer relationship.
Let’s go back to the Apple example. Apple’s devices offer similar functionality to its competitor’s devices. Why can Apple charge more? Because they invested in their social currency:
- Utility: Apple doesn’t only deliver the functionality consumers want. It does so in a way that is easy and seamless for consumers. It focuses on providing the most friction-free user experience possible.
- Conversation: Apple is known for its legendary product launches and events. At any time of the year, there’s a lot of conversation generated around its products.
- Identity: Apple fans rallied around its “Think Different” cry. These days, Apple products represent a certain status or premium.
Each of these dimensions encourages Apple customers to stay loyal to the brand. Even if your business doesn’t have access to a massive ad budget like Apple, you can still apply the same principles to build your social capital.
The social currency bank account
Building your social currency can also make your referral marketing strategies more effective. Think of social currency as a bank account. If you want to spend your social currency – that is, if you want customers to do something – you have to earn it first. If a customer doesn’t see a brand as having social capital (or doesn’t have an existing relationship with them), they are unlikely to advocate it to others.
What are ways you can add to your social capital? Be present on social media, share relevant content, and highlight your best features.
You don’t have to do everything at once – you can gradually build your customer relationships. Start by being a friend to your customers. Post helpful information about your brand and answer any concerns. And if someone shares a tweet about your product or tags you in a photo, be sure to respond with thanks.
Every time you provide one of the six dimensions of social capital, you’re making a deposit into your social bank account. This account is what you’ll draw from when it’s time to ask for a referral or promotion.
Every customer responds to the dimensions differently. For example, if a customer usually follows the crowd, they’ll most likely respond well to affiliation. If another customer values utility, they’re more interested in a product to solve their problem.
6 benefits of social currency for your business
In time, you’ll start to notice several benefits that come with earning social currency:
1. Greater insight into your customers
Positive social capital deepens the relationship between your business and your customers. You’ll have a clearer view of what your customers want, what they don’t want, and any gaps in the market you can address. You’ll also see how customers perceive your brand, which allows you to manage your brand reputation.
2. Increased impact
Social currency helps increase the market value of your brand. When a consumer sees others also enjoying your products and services, they’ll be likely to trust and try what you have to offer.
3. Larger circle of influence
When a brand earns enough social currency, it becomes an influencer in its industry. It solidifies its position and gains even more leverage with other influencers.
4. Organic growth
When your social capital reaches a certain level, you experience a snowball effect – all the work you’ve done in the past will compound. Customers are already motivated to share the product or service with others. And if this happens through time at scale, you can expect a boom in customers and advocates for your brand.
5. Higher customer retention
Social currency drives the kind of loyalty that catapults you over other brands. For example, Target and Walmart offer many of the same products. But because Target has earned social capital through its social channels, the brand has a higher repurchase or loyalty rate over Wal-Mart.
6. Premium prices
If you’re trying to position your brand at a premium price point, social currency is a big help. Social currency changes the way customers perceive the value of a product, by adding something money can’t buy.
7. Better word of mouth
Building a brand your customers are proud to support not only increases social currency, it will also boost your word-of-mouth marketing. Brands with high social capital are more likely to be promoted and recommended by your existing customers.
8. Larger amounts of higher-quality leads
All the above benefits add up to this final point – more leads. By now, your customers are primed to refer their friends and family to your business. This drives a steady stream of highly qualified leads, which results in exponential business growth.
10 ways to increase referrals with social currency
Want to increase the social currency of your business? We put together some top actionable strategies you can start using today. Below are several ideas to gain social capital with your customers.
1. Find influencers and brand ambassadors
When an influencer or brand ambassador promotes your company, you’re borrowing their social currency. After all, these individuals will only promote a brand they love and think offers value to their followers. Focus on finding representatives who resonate with your audience, and whose fans respect and trust them.
Influencer marketing and brand ambassador programs are one of the most effective ways to generate more social currency. Brand ambassador programs have also proven to help you grow your brand 10 times faster.
Social currency dimensions used: Affiliation, conversation, advocacy
2. Form a community
One of the most successful social currency strategies is to create communities. This is especially true for your target customers. For example, say your business sells an organic cleaning spray. You might create a Facebook group for people to share natural home cleaning tips. By doing this, you’re offering affiliation and identity to your members. You’re also attracting others with a growing interest in organic cleaners.
Social currency dimensions used: Affiliation, advocacy, identity
3. Show what’s unique about you
What sets you apart from your competitors? Do you have a unique selling point? Find what makes you stand out and highlight those features in all of your marketing efforts. This is not only a great selling tactic for your brand, it also helps to drive social capital and sharing.
Social currency dimensions used: Utility, affiliation, advocacy
4. Create explainer videos
It’s every brand’s dream to have the next viral video hit. While it’s hard to predict what will go viral, creating useful video content is a good place to start. A simple explainer or how-to video is always helpful for consumers. As long as you focus on valuable insights or tips, you can be sure your customers will be watching.
Social currency dimensions used: Utility, information, advocacy
5. Incentivize your advocates
The majority of people trust recommendations from their peers, which makes referral programs one of the most effective ways to grow your business. However, referral programs need the right incentives to work. Consider offering coupons, vouchers, gift cards, or other proven referral rewards for your advocates. You can also give a shout out to your top referrers within your community.
Social currency dimensions used: Utility, advocacy, conversation, affiliation, identity
6. Launch an informational campaign
It’s always helpful to share key information with your customers. Developing knowledge bases, online learning portals, guidebooks, and other informational resources is a strong way to build your social capital.
Social currency dimensions used: Information, conversation
7. Use gamification
Consider adding game mechanics or competition structures in your marketing efforts. For example, you can invite customers to complete challenges, progress through levels, and earn points.
Gamification can easily be applied to a loyalty program or referral program. It can also be used in a promotional contest to create buzz around your brand (much more interesting than a traditional ad).
The fun and value customers get out of this style of marketing can further motivate them to share your brand. Just make sure you offer a way for them to easily share their achievements throughout the campaign.
Social currency dimensions used: Identity, affiliation, utility, advocacy
8. Create a sense of exclusivity
Share exclusive brand “secrets” with your most loyal customers – things that aren’t known by the general public. This can be a secret menu item, a members-only event, or a private sale.
No matter what the secret is, the offer of exclusive info raises your social capital among your select customers. This drives them to talk about your brand with their friends so they can all enjoy the same benefits. These friends, in turn, will also share with their friends, which gives your brand’s social currency a huge boost.
Social currency dimensions used: Utility, information
9. Optimize content for social media sharing
One of the easiest ways to boost your social currency is to create products and content optimized for social media sharing. Whether it’s a highly shareable product, an Instagrammable brand experience, a humorous Tweet, an on-trend brand video, this content can quickly boost your social capital. Just make sure to deliver what your audience wants, and stay true to your brand voice and tone.
Social currency dimensions used: Conversation, utility, affiliation
10. Put a face to your social capital efforts
Featuring your best customers is a great way to show them you appreciate their efforts, and helps form key identities within your community. In a referral program, for example, this may include highlighting your top-referring customers and new referrals.
Social currency dimensions used: Identity, advocacy
Whether you’re actively building social capital or not, many of the listed dimensions may already play a role in your brand strategy. They effectively help you form deeper relationships with customers, and complement any other growth and referral marketing strategies.
The result? Even more high-quality leads and referrals. Review your current marketing strategies and look for other areas you can add to your social capital.
Social currency examples
Still wondering how to add social currency into your marketing efforts? We round up four great examples below:
This Tweet from Starbucks is #perfect. As you can see in the image below, they made a fun little countdown number (2) with hearts and coffee cup emojis – a nice visual to share, right?
They also created a limited time event, which gives the promotion a sense of urgency and exclusivity. You don’t want to miss out on sharing the love. The buy one, get one free (for a limited time) offer definitely got this post a good number of shares and likes.
Ever had an Animal Style burger at In-N-Out? This item isn’t listed on the chain’s regular menu. Instead, Animal Style burgers (and fries) are part of the secret menu – so you had to learn about them through word-of-mouth before you could order. In-N-Out knows how to make people feel like insiders with their secrets, and drive up social currency. Regulars know that Animal Style is too good not to share, so they’re happy to pass the secret along!
Milk Train is an ice cream shop in the UK. And it knows how to create a totally Instagrammable experience with their “cloud” dessert – a combo of ice cream and cotton candy. Below is just one example of a social media-friendly food item that was tailor-made to drive up social currency. People like @atyourshervice can’t help but post!
Referral programs are one of the most effective ways to grow your customer base – all your customers know at least one other person who would love you. Trendy Butler gets that. They even named their campaign a “Friends & Family Program,” which emphasizes the exclusive list and makes you feel like you’re family. Who wouldn’t want to share?
Wrapping things up
Social currency doesn’t have to be used for only a single marketing campaign. Whether you use it to promote a new item, your referral program, or your entire brand, be engaging have fun, and share who you are to build up your social capital.