If you didn’t catch Vivaldi Partners’ study on social currency [PDF], released earlier this year, you missed some intriguing food for thought. The study showed that social currency — “the extent to which people share the brand or information about the brand as part of their everyday social lives at work or at home” — accounts for 53 percent of brand loyalty.
Social currency isn’t just “buzz,” says Erich Joachimsthaler, the Founder and CEO of Vivaldi Partners, it “represents a shared asset of consumers and company-owned brands.” It’s not something that companies create and control on their own, he advises, but there are six “levers” that organizations can use to encourage or impact social currency:
Deconstructing Social Currency
Social currency isn’t viral marketing, social media or digital communications. But it’s fair to say that online brands have a range of tools and technologies at their disposal to help push the levers of social currency.
Take a look at WebWorkerDaily, for example. This site’s users feel a sense of unity when they find others who use the site; WWD users may also feel an affiliation with other users of the GigaOM network of sites. One way in which WWD tries to boost that sense of unity is through our user profiles, which tell the stories of individual WWD readers. To our users, the WebWorkerDaily brand stands for something, and they identify themselves — and other WWD users they read about and meet — with the brand qualities they perceive.
For many of our users, WWD might come up in work conversations with colleagues and friends — there’s a lot to talk about here, and the site’s comments and content sharing tools support users’ desire to communicate with one another about, and advocate for, WWD. This also points to the brand’s utility, in terms of the value WWD information and conversations deliver to those working on the web, as well as how easy it is for users to communicate that information to their contacts. That public advocacy through conversation builds identity and a sense of affiliation, and reinforces the brand’s utility further.
As you can see, the levers of social currency interact in many places and on many levels. Some of these interactions can be influenced by the WWD team, but there are large areas of this shared space that are beyond the team’s control. For more detailed examples of market-leading brands, see the report itself.
Social currency isn’t new, but it seems the “global village” has made this phenomenon more prevalent, and more important for companies operating online. I can think of two recent examples that appear to at least hint at the power of social currency for online brands.
As an example, the “Friends” link on the site simply provides logged-in users with tools to help Facebook build its userbase. I’d expected the Friends link to provide me with a list of my Facebook friends. But perhaps the fact that Facebook values its own visibility over user expectations is part of its approach to building social currency.
A large portion of Facebook’s users have railed against the complexity of the site’s privacy settings, causing the service’s founder to make public addresses on the steps being taken to appease user concerns. Yet a recent protest, Quit Facebook Day, failed to attract a groundswell of user response.
The second example is Apple. In recent years, the company has caused consternation around everything from digital rights management and content policies to product manufacture quality and environmental and social responsibility.
A recent spoof of CEO Steve Jobs’ iPad launch brief coupled his hyperbolic effusions over the “unbelievably great” iPad with a briefing scene from Star Wars to make comment about the brand’s unjustified self-importance. Yet Apple sold 2 million iPad units in the first 60 days after launch, and the Apple business continues to expand.
It seems that for every brand advocate that Facebook and Apple have, there are several detractors, yet the brands flourish. Is social currency a contributing factor to this paradox? It seems so.
Where have you seen social currency in action? How much do you think social currency accounts for major web brands’ ongoing — and growing — patronage by users who are nonetheless dissatisfied with some aspect of the brands, and have plenty of competitors to consider?