Capitalism is beautiful. Almost anything humans learn, they build business models around it. This leads to efficient use of resources and constant efforts to learn more to earn more. An essential requirement of building business models is learning to control whatever the model is around. Controlling means measuring, allocating, and using it.
For example, electricity had always existed. Lightning strikes, sparks in the blanket were all forms of electricity that we couldn’t control. Until someone used some tools to make a specific amount of electric current flow from one place to another. Suddenly, electricity could be yielded to power almost all of human progress.
The impact of such knowledge is difficult to quantify. Does it include the learnings that were made possible, like the doubling of productive hours? Does it include a change of mindset on what is possible and what isn’t, yet? We’ve tried to list the potential impact of social currency on brands, marketing, and you. It isn’t exhaustive, the boundaries are for time to define.
Impact on Consumers
Pay with Followers
People with huge social capital understand that they can pay using their following. This form of payment is nothing new. For example, how often does a celebrity have to pay an entry fee into a club? They are welcomed because they bring in many more followers who will be paying. Using metrics that can convince gatekeepers of the social currency of every individual can open up new possibilities on how people are admitted in different places.
Rise of the Socially Affluent
Companies chase people with higher purchasing power. However, when it comes to the average consumer, their attitudes can be stiff. Social media ensured brands couldn’t get away with even isolated incidents of poor service. Socially rich can help spread the word quickly and reliably. This is the new power in the age of information that is not restricted by wealth or numbers.
Bargain with Brands
One of the oldest tricks in the book of bargaining is asking, “What is the price if I buy two instead of one?” If other people flock in and imitate your purchases both parties win- you get the bargain, the brand gets the sales. If everyone recognises the power within their circle of influence, those aware of their social clout could leverage it every time they make a purchase.
Impact on Brands
Low Cost, Lower Risk
Instead of banking on the success of a single brand campaign or brand ambassador, relying on a number of smaller influencers spreads the costs and the risk. Moreover, nano and micro influencers charge less and are more flexible with accepting payments in kind or cashback on purchases. Understanding the power of customers who are likely to bring many more customers could tell brands when discounting could mean more profits instead of burning cash.
Growth from Quality, Not Just Quantity of Customers
Some brands just hit a note with their consumers like no other. It seems like brands like Dolo 650 just hit a lottery being added into the daily vocabulary of their customers. It is difficult to shake that, even when they are accused of wrong-doing. However, the success of Maggi, Fevicol and other brands that became synonymous with the commodity they sell shows there is a method to the madness. One can grow by being everywhere or being at just the right places. On the right shelves of the socially rich, purchasing of the masses can be influenced.
Reach Target Audiences Directly
People with a few thousand followers tend to have similar kinds of people following them. They are also hyper-local. A small resin artist with around 5000 followers would generally have followers in the same country with similar demographics. It helps brands break into target markets using location specific strategies increasing conversions.
Earn Trust or Social Currency
User generated content is the new age testimonials. Seeing products being used by people increases their acceptability as they perceive them to be vetted by people they know and trust. Seeing a post by someone they know seems more like a friendly suggestion than a sales pitch. Brands can therefore earn greater trust or social currency by capitalising on the social currency of their customers.
Less Competitive Avenue for Marketing
Brands compete intensively for consumer attention who is already bombarded with information. Traditional marketing avenues suffer from advertising blindness or banner blindness (phenomenon of automatically ignoring advertisements by viewers). However, social networking sites have greater engagement rates. Average engagement rates of Instagram is the highest among other platforms like TikTok, Meta (Facebook), YouTube etc since people expect interpersonal interactions instead of transactional services.
Impact on Marketing
Democratisation of brand ambassadors
Celebrities and influencers with celebrity status earn outrageous fees for promoting brands. The rise of influencers has changed the way people use social media. Why must these benefits be limited to those who command huge following when everyone holds the power to influence? With the ability to quantify social currency, regular social media users can credibly show their influence. They could be smaller brand ambassadors for brands, democratising access to influencing opportunities just like the internet democratised the access to information.
People trust people they know
It can be difficult to trust huge marketing campaigns, hoardings, and even familiar faces of celebrities advertising products. They are far removed from the viewer. The inaccessibility is removed when friends or family suggest the same product also because they speak from personal experience. The most perfect set of white-teeth advertising a paan-masala brand is ironic if not ineffectual.
“Instagram influencer marketing removes the barriers of traditional advertising because customers are introduced to your brand from a trusted source (the influencer) on an authentic, casual platform (Instagram).” ~ Later
The future is being written with those who are aware of their social capital. Do you know about yours?