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Why do some customers choose your business over others?  How is it that some companies get shared on social media while yours gets no love? Why do some customers refer friends while others don’t?

A new model of approaching our customer relationships may have the answers. Social currency is a way to understand the value businesses add to customers. Understanding how to develop social currency allows brands to drive higher customer loyalty. This leads to more referrals and sales.

In this post, we’ll discuss how social currency plays a role in your customer relationships. As well as how that can benefit your business. We’ll also share how you can earn more “social currency” and use this to grow your business.

What is Social Currency?

What is social currency? It’s basically your influence and presence on social networks and offline, and the degree to which your business is shared by your customers. You provide information to others, and that helps define your identity through social channels.

What makes you interesting? How do you create value? Are you doing anything that will make yourself stand out from your competitors? If so, you are probably using social currency.

Here’s how a traditional sales funnel works:

  1. Encourage potential customers to consider your product or service
  2. Lead them to a purchase decision
  3. Give customers a way to show loyalty by referring family and friends

In many ways, moving customers from the ‘consider-to-purchase’ phases is straightforward. But turning your customers into advocates requires adding something extra.

social currency is a great addition to your strategy

That “something extra” is social currency.

Social currency explains your business’s social relationship with its customers. A study by Vivaldi Partners explains it like this: “Social currency measures the ability of brands to fit into how consumers manage their social lives in today’s digital and mobile age.”

Here’s our detailed social currency definition (it’s all about reputation).  

The social currency of individuals

People share what they think will make them “look cool” — in other words, they’ll only share what they believe will maintain or increase their reputation in the eyes of their peers. 

Whenever they choose to share information, a person “spends” social currency and places their reputation on the line. They don’t want to share boring, irrelevant, or misleading information, because then they risk losing their status among their peers.

The social currency of brands

 If someone chooses to share your brand positively, they “spend” social currency on you. And if their friends like what they see and hear, this leads to an increase in social currency for both the sharer and your brand.  

So, increasing your brand’s own social currency is all about making your brand trusted, relatable, and shareable.

All businesses use social currency, and for a good reason. Putting your best foot forward is a great tactic in connecting with your customers. When you share interesting content with your customers, your messages are likely to be shared. Which results in not only brand awareness, but it also creates a better bond between you and your customers. They like you because you are cool, and they like sharing cool things with their friends. 

Social currency and brand loyalty

As the Vivaldi Partners study showed, social currency helps drive brand loyalty. Brands that have earned high social currency also command premium prices.

Think about Apple, the world’s biggest company. By building its social currency, Apple doesn’t just lead smartphone sales by volume. It also charges a premium: it’s able to command some of the highest prices for its products.

Like 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

Building social currency requires providing one of the following “dimensions”. Or levers to an audience member:

  • Affiliation – Offering a sense of community among your customers.
  • Conversation – Engaging in the customer conversation around your brand.
  • Utility – Creating utility and value for customers. While helping them become more socially relevant.
  • Advocacy – Developing strong feelings of loyalty to a brand. To the point where customers recommend and even defend it.
  • Information – Giving valuable and shareable information.
  • Identity – Providing customers with their own identity in a group.

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These dimensions have always played a role in your social strategies. Yet, their influence may not be focusing on other parts of the customer relationship.

Each of your social tactics should consider one or more of these dimensions. When planning your social strategy, you may ask, “How can I add provide greater utility?” Or, “How can I give customers a sense of affiliation?”

Let’s return to the Apple example. Apple’s devices offer similar functionality as its competitors. Why can Apple charge more? They’ve invested in developing the following social currency dimensions:

  • Utility: Apple doesn’t only deliver the functionality consumers want. It does so in a way that “just works” (well, most of the time).
  • Conversation: Apple’s legendary product launches help build a conversation around its products.
  • Identity: Apple fans rallied around it’s “Think Different” cry. Now, Apple products represent status or having what’s perceived as the best.

Each of these helps Apple customers decide to stick with that brand.

Your business may not have access to a massive ad budget like Apple. Yet, you can still apply the same principles, which will grow your word-of-mouth marketing and generate more referrals.

The Social Currency Bank Account

Understanding how to build social currency makes your referral marketing strategies more effective.

Imagine it as a bank account. If you want to “spend” your social currency— that is, if you want to ask something from your customers – you’ll need to have earned something first. As you know, customers who don’t have a relationship with a brand are unlikely to advocate for it to others.

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Each time you provide one of the six dimensions of social currency listed above, it’s like you’re making a “deposit” into your social bank account. Then you have something to use when it’s time to ask for a referral or sale.

Each customer responds to the dimensions differently. One customer follows the crowd and responds well to affiliation. Another customer is seeking utility and trying to find a product to solve a problem.

It doesn’t matter which tactics you use to drive potential customers through the consider, purchase, and loyalty phases of the sales cycle. You can always add these dimensions to further deepen the customer relationship.

Social currency means showing everyone what makes you better than the rest. Put yourself out there, share humorous content here and there, and talk about your best features. You’re basically making yourself date-able, trusted, relatable…shareable. You don’t have to dive right in— play it calm, cool and collected,  and gradually build your relationships up. Becoming a friend of your customers by sharing interesting and cool things about yourself helps you develop these relationships. It also helps to interact with customers. So, if someone tweets at you, reply back. 

Social currency is the key to everything you have ever seen go viral on the web. Now that isn’t saying everything and everyone goes viral, but it does help you increase your word of mouth travel… we all know word of mouth marketing can make you popular. 

How Earning Social Currency Benefits Your Business

When you’ve taken the time to earn social currency with your customers, your business benefits in several ways:

1. Greater Insight Into Your Customers

It 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 gaps in the market your brand can address.

You’ll also know how customers perceive your brand. Allowing you to manage your brand reputation.

2. Increased Impact

Social currency helps your customers find more value in your product or service. This provides more utility from your brand. Which in turn increases their likelihood of becoming a brand advocate.

It’s an upward spiral of customer loyalty, value, and advocacy.

3. Larger Circle of Influence

When you’ve earned enough social currency, your brand gains the ability to take the role of influencer. This gives you greater leverage with other influencers.

4. Organic Growth

When your social currency reaches a certain level, you’ll experience a “snowball” effect. All the work you’ve done in the past will compound. You might experience Metcalf’s Law. The phenomenon where audiences reach critical mass and explode in popularity.

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5. Higher Customer Retention

Social currency drives loyalty beyond comparing offers between brands. Sure, Target and Walmart offer many of the same products. But because Target has earned social currency via 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 helps. Building social currency gives your brand greater control over how customers receive value. By focusing on non-price related social currency (such as identity), you can charge a premium price.

7. Better Word of Mouth

How will current customers respond to these types of investments? They’ll provide better recommendations about your business. They’ll be your front line in word-of-mouth marketing. Thus promoting your business to their friends.

8. More High-Quality Leads

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All the above benefits add up to this final benefit: more leads. Your customers become primed to refer their professional network to your business. Thus, driving a steady stream of highly-qualified leads. Resulting in helping your business grow.

Want these benefits for your business? Let’s dive into some actionable strategies you can start working on today.

Actionable Ways to Generate Social Currency and Increase Referrals

Here are several ideas you can try today to generate social currency with your customers.

Reach Influencers and Brand Ambassadors

When an influencer (short-term brand rep)  or brand ambassador (long-term brand rep) promotes your company, you’re borrowing their social currency, as well as using your own. After all, these representatives will only promote your brand because they love it and think it offers value to their followers.

This is why an influencer marketing strategy or brand ambassador program is a powerful way to generate more social currency. It’s also a reason why social media is a great tool for businesses. Brand ambassador programs can help you grow your brand 10x faster!

 But who should you choose to represent your brand for the best results? Focus on finding representatives who resonate with your audience, and whose fans respect and trust them.

Social Currency Dimensions Used:

  • Affiliation
  • Conversation
  • Advocacy

Create a Community

One of the most successful strategies is to create communities. This is especially true for your ideal 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’d offer affiliation and identity to your members. You’d also attract people who might show interest in organic cleaners. Also, remember that responding to people’s social media posts and comments about you will further the sense of brand community, so get replying!

Social Currency Dimensions Used:

  • Affiliation
  • Advocacy
  • Identity

Show What’s Unique About You

What sets you apart from your competitors? Do you have a unique selling point? Or did you develop products to solve specific problems? You should be emphasizing what makes you stand out already (it’s solid branding). But be sure to place that selling point front and center in all of your marketing, and find cool ways to drive that point home, to maximize social sharing. 

Social Currency Dimensions Used:

  • Utility 
  • Affiliation 
  • Advocacy

Create Explainer Videos

It’s every brand’s dream to generate 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.

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Simple explainer (or “how-to”) videos are a great place to begin. This is especially true when the video relates to your audience’s interests. Valuable insights or video tips provide utility and information to your customers. Thus taking the next step towards advocacy should feel natural.

Social Currency Dimensions Used:

  • Utility
  • Information
  • Advocacy

Incentivize Advocacy

Referral programs are a powerful way to grow your business, because people trust their peers’ recommendations. Yet, these programs need the right incentives to be successful.

 RedCoach offered a two-sided incentive, rewarding both the customer and the referral. This generated social currency with both sides.

Consider offering coupons, vouchers, or even gift cards. Recognize your top referrers to provide an identity within your community.

Social Currency Dimensions Used:

  • Utility
  • Advocacy
  • Conversation

Develop an Information Campaign

Creating a resource to share information with customers builds you up. Develop eLearning portals, knowledge bases, and other informational resources for customers.

Social Currency Dimensions Used:

  • Information
  • Conversation

Use Gamification

Think about developing a game or competition structure centered around your brand, where customers can complete challenges to earn points and achievements, progress through levels, and climb leaderboards. You could easily apply this structure to a loyalty program or referral program. Or, you could create an engaging task-based contest to drive buzz around your brand, instead of using a traditional ad. The fun and value that customers get out of the game will motivate them to share your brand. Make sure your customers can easily share each achievement as they progress!

Social Currency Dimensions Used:

  • Identity 
  • Affiliation
  • Utility
  • Advocacy (depending on usage)

Create Exclusivity

Develop exclusive brand “secrets” that your loyal existing customers know about, but that you don’t share with the general public (like secret menu items, members-only events, or private sales that you only share with existing customers).

Your customers will feel like they have insider info, and won’t be able to keep themselves from sharing, because they want their friends to experience the same benefits. These friends appreciate the info, and as a result, the sharer’s (and your) social currency gets a boost.

Social Currency Dimensions Used:

  • Utility
  • Information

Create Content and Experiences Optimized 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, a brand experience that lends itself well to Instagramming, a humorous Tweet, an on-trend post related to your brand, or an engaging video, these content pieces will quickly give your reputation a boost when done right— and may even go viral. Just be sure to deliver what our audience wants, and stay true to your brand voice and tone. 

Social Currency Dimensions Used:

  • Conversation
  • Utility
  • Affiliation

Give Your Customers an Identity to Rally Around

Highlight customers within your community to help them stand out and gain a community identity. In a referral program, this may include featuring top-referring individuals and new affiliates.

Social Currency Dimensions Used:

  • Identity
  • Advocacy

Whether you realized it or not, the dimensions already play a role in your brand strategy… Thus, developing social currency empowers your brand to deepen relationships with your customers.

The result? A more effective referral marketing strategy, giving you extra high-quality leads and referrals. Review your marketing strategy today to see how you can build more social currency with your audience.

Social Currency Examples

Do you need some examples of how social currency is put into play? Perfect, thought you’d never ask.

Example 1: This is too cool not to share…

Talk about awesome. If I could start earning money by joining an affiliate program like Amazon Associates, why wouldn’t I? I’d tell my friends about it because it’s just too cool not to share.

Example 2: Too good to be true, I must share…

Yes, this Tweet from Starbucks is #perfect. As you can see they made a fun little countdown number (2) with hearts and coffee cups – cool visual to share, right? They created a limited time event, which creates a sense of urgency and exclusivity. You don’t want to miss out on sharing the love.  Do you see a number of shares and likes? Buy one, get one free (for a limited time) definitely works in fostering a lot of shares.

Example 3: I want to let my friends in on the secret…

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 regulars know that Animal Style is too good not to share, so they’re happy to pass the secret along!

Example 4: So cool! I need to post about this!

Milk Train, an ice cream shop in the UK, knows how to create a totally Instagrammable experience with their “cloud” dessert— a combo of ice cream and cotton candy. It’s just one example of a social media-friendly food that was tailor-made to drive up social currency. People like @atyourshervice can’t help but post!

Example 5: I know the perfect person to share this with…

Referral programs are great in that all of your customers know at least one other person who would love you. Trendy Butler gets that. See how they call it a Friends & Family Program? It makes it sound like you’re on their exclusive list, plus they make you feel like you’re family. Who wouldn’t want to share?

Remember that social currency doesn’t have to be specific to one thing in your brand. Whether you use it to promote a promotional item, your referral program or just your brand in general – be creative, have fun,  and show who you are and you can build up solid social currency.

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Posted by Megan Mosley

Megan Mosley is a writer for Referral Rock. You can find her poking around online or tweeting about marketing, small businesses, SEO, or even sharing funny memes. She is addicted to coffee and uses it as a fuel to keep her going through the day.