Vivaldi Partners recently released a study entitled “Social Currency” that looks at why brands need to build and nurture social currency. Social Currency is one of those sayings your hear tossed around, but no one ever really defines it. That is one of things that makes the Vivaldi study so interesting. In the words of Vivaldi’s founder, Erich Joachimsthaler, Social Currency is:
“the extent to which people share the brand or information about the brand with others as part of their everyday social lives… Social currency is not just about conversation, buzz or community. It is all this and much more. It does not impact every brand equally and certain levers of social currency are more important than others in driving value for companies.”
The report is a great read but there are a couple of key takeaways and snippets that I have captured from the report below:
Social Currency consists of six core levers
- Affiliation: What share of your users has a sense of community?
- Conversation: What share of your brand users recognizes and stirs buzz?
- Utility: How many of your users derive value from interacting with other users?
- Advocacy: How many users act as disciples and stand up for your brand?
- Information: How many of your users feel they exchange fruitful information with others?
- Identity: How many of your users can identify other users?
Social currency represents a shared asset of consumers and company-owned brands
It originates from interaction between customers and consumers. Companies can stimulate the creation of social currency through means that cultivate a sense of community, strengthen consumer interaction and provide value to the community. When done credibly brands earn trust and can grow into an integral, almost symbiotic role in customers’ lives.
What matters is “meaningful” social currency.
Social media efforts should be evaluated in terms of the extent to which it contributes to a brand’s equity, the extent to which it drives category or industry attributes or connects with consumers. Example: successful viral efforts like Burger King’s subservient chicken digital efforts created a lot of buzz but did not really contribute to the strengthening of key components of its brand equity nor did the effort deliver on factors that drive purchase and consumption in the category.
Social Currency must be built and nurtured
Today’s digital technologies open up new and enormously exciting opportunities for building social currency. While there has been a plethora of experimentation over the years, it is clear that we have merely scratched the tip of the iceberg. As technologies evolve, new ways will emerge of how social currency can be built over time. The big conundrum for marketers is that in an online world, brands are far more broadlyand proactively discussed than ever imagined. As these conversations are often beyond the direct influence or control of a company, marketers must find innovative and creative ways to thoughtfully leverage these independent brand conversation and act credibly in the digital arena.
The full report does a great job of pulling out examples of Social Currency across different product categories. Also, for more perspective on the topic, the May 2010 issue of Fast Company used the study for the article “Five Steps for Consumer Brands to Earn Social Currency“