Social Currency: What is it and Why is it important in 2024?
Social currency is the value that people or brands can receive through their presence and influence in digital communities. . Many consumers trust word-of-mouth marketing from their family and friends on social media platforms over brands’ direct marketing or news outlets.
Social Currency
Social media is an ever-growing entity that continues to govern our digital space. But with our worldview expanding and anonymity growing, trust is a valuable thing. It allows us to build and foster relationships with others and gives us a sense of security. In our digital space issues of trust are ever present.
So how can large companies turn a profit if they don’t hold consumer trust? This is where social currency bridges the gap. Social currency is the value that information has when it is shared between individuals. If something has a good social currency, then people want to continue to share it. In essence, it is a way to build customer loyalty and consumer trust by harnessing the power of recommendations and reviews. Brands can amass social currency, but so can individuals.
Individual Currency
Social currency begins with individuals. After-all, it wouldn’t exist without people to fuel it. The psychology of it is rooted in how we view ourselves. Basically, people share what they think makes them look good. They will share things on social media that they believe will maintain or boost their reputation or social status.
When someone chooses to share, they place their public image on the line. This is how we spend our social currency. Many of us want to make sure we are sharing relevant and entertaining content so we don’t lose status with our peers. It gives a sense of value and combines our basic human needs to belong and the need to feel significant.
Individuals and brands have complementary currencies that work together to build online communities that grow loyal customers. Long gone are the days of brands working independently to create a social identity.
Advertising of the past
Marketing success used to bank on how much advertising money a brand could spend on television commercials, radio ads, and magazine appearances. The more a brand could afford to spend, the more likely they were to make a profit. There was also a lack of brand-to-consumer engagement.
Now, it is more important than ever for a business to build their influence currency on social platforms.
How to Build Social Currency
Social currency is incredibly simple, but can quickly become complicated. Yes, it can build a brand’s awareness and increase leads but that only goes so far. Social currency can take a brand a lot farther when used with the right strategies. It has its bonuses and provides brands a multitude of benefits. Here are just a few:
- Increased brand awareness.
- More brand loyalty and credibility.
- Increased sales.
- Higher customer retention and rate conversion.
- More website traffic.
- Better lead generation.
In a world of fake accounts and spam emails, authenticity is key. Brands who are transparent about successes and failures tend to have a higher social status. Sharing your wins and failures on social media can increase a brand’s relatability. It sends a message to consumers that the brand is honest and human. The following strategies when used tend to have the most success in building a brand’s social currency.
1. Establish a community.
Having a community mindset for your brand is vital for success. It tells people that you are accessible and human. Inviting your audience in to get advice for ways to improve is a great way to start. It gives your audience a better customer experience. Allowing your community to tell you what you as a brand can do for them is a successful way to build loyalty, trust, and best of all — social currency.
2. Engage with your audience
With your community built, it is important not to ignore them. Our world is becoming more digital everyday. When people receive direct interaction and feel like the community space is active, it builds consumer trust. More importantly, it can help your brand expand.
Liking and commenting back on community posts is one method. Starting conversations and responding to consumer DMs is another. Even reposting photos your brand has been tagged in shows that you are actively participating with your consumer pool and building relationships.
3. Utilize referrals and affiliates.
Getting your product in the hands of an influencer can lead to big success. It works because that influencer has social currency to spend. With thousands of followers who trust them, they can become a middleman for your product. When you have multiple people beyond you and your company to promote your brand it builds trust.
This relationship does not have to be exclusive to individuals. You can partner with other brands that your community is engaged with to build on existing trust. Partner brands have a social currency that can help leverage that existing trust with consumers to build a relationship network. It’s akin to word-of-mouth marketing without having to rely on individuals.
Putting referrals to work also helps. Giving consumers incentives for trying your product for free and having them share the results can further build credibility. The more honest testimonials you can have floating around the more authentic your brand becomes. Now you even have content to repost and more exposure to audiences you might not have tapped yet.
4. Find a face for your brand
Putting a human face on your brand is crucial. It makes you relatable and approachable. Having someone who constantly promotes your brand is a big driver of sales and works for you to improve social currency. Finding someone who promotes your brand is a big win when working to improve your social currency.
5. Be consistent
A consistent brand is often a successful one. Keeping up with socials, posting regularly, and utilizing SEO to gain visibility is all important to give your brand longevity. Things do take time and being able to successfully keep up with the pace of social media and our digital space will be the key to success. Consistency in your brand activity also shows that you are in fact active and therefore approachable and accessible to consumers.
6. Use data
No surprise here. Data is a crucial element to tracking the success of a brand. From small startup businesses all the way to top dogs like Amazon, data drives marketing. Data is another digital currency that brands can spend to improve targeting, messaging, and even product development.
However, data comes with social responsibility. Data must be ethically collected and used for its intended purpose. If consumers discover that their data was misused for the benefit of your brand, it can quickly create a social currency debt.
The Power of Social Currency
When a brand holds social currency it impacts a few different things. It pertains to their influence on social networks, online and offline communities, and the degree by which a business is shared by others. In 2020, $102 billion was the projected spending for the advertising budget and many built their campaigns using social currency as it’s base.
The average consumer doesn’t necessarily trust business brands but trusts their friends, family and people they follow on social media for purchasing advice. There is one trick that is used now more than ever. Today, many brands push their products through influencer accounts. Because of this, many influencers essentially became the sales representatives for millions of products. The idea of recommendations and trust in other accounts fueled sales through affiliate links. In 2020 one influencer made an average of $5,000 per month through affiliate links alone. This marketing strategy is so effective that it drives 16% of global e-commerce sales. While this may seem low, it is still important to remember the context. All in all, it means that 1 out 10 of every online sale comes from affiliate sources.
How to Leverage Individual Currency
Social currency has earned its rightful place in the hallowed halls of marketing techniques. It even has become an underlying principle of how everyday people interact with social media. Whether you are a brand owner looking to expand your reach or even an individual user becoming informed, it is an important concept to understand. We see it every day and it informs our digital interactions. Now you can be more conscious of social media tactics and put social currency to work for you.
If you bank online, use social media, or send emails through any large tech platform, then your data is already being shared and sold for profit. It’s time to reclaim its worth and use it to unlock premium rewards instead of giving it away for free.
Invisibly is a platform that allows you to maximize the value of your data and earn brand rewards for it. The data collected is the data you decide to share – putting you in direct control, always. Connect your bank or credit card account(s), take surveys, and earn points to unlock your rewards from brand partners including Target, Ulta Beauty, Best Buy, and many more.
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