The influence people hold, the trust people place, and the space people allow others to take in their lives is social currency. It exists and affects every distinct identity- individuals and brands- when they interact with one another. Increasingly social currency is being defined as the influence on social networks like Facebook, Instagram et cetera. Take for example the research by Vivaldi Partners defining social currency as “the ability of brands to fit into how consumers manage their social lives in today’s digital and mobile age.” However, we believe social currency has existed as long as societies have, online and offline.
History is full of examples like Mahatma Gandhi, who could band together thousands to march 300 km without any official power or money or free food. Closer home, people tend to pay closer attention to that one person in every friend circle. They can speak on any topic but chances are their word is taken more seriously than others. Almost every family has that one tech guy who vets all gadgets and even regular online purchases of the family. For brands, there is a reason one can buy their car, coffee, salt and so much more from the Tatas.
How does it work?
Social currency is built on reliability and authenticity. Every time an individual or brand shares something with anyone, they can earn or lose social currency. If the audience can rely on the message to live upto what how they perceive the sender, the sender earns social currency.
People share what makes them look good. Social currency is intertwined with status. Higher social currency means higher status. Therefore people are careful about what they are sharing as they realise they are spending and earning social currency with every interaction.
What’s changed? Why is it relevant?
If social currency has existed with every human ever since the beginning of civilisation, why is it suddenly relevant again? It is because modern communication networks such as social media have made it possible to verify and quantify social currency. This is monumental.
Today, data of social media presence can be sliced and diced to do a dynamic and wholesome analysis. A multivariate analysis of social media presence has democratised social capital and its benefits like CIBIL score did years ago with credit score. For example, it was difficult for banks to evaluate credibility of prospective borrowers without collateral or a big name in the market. Credit score evaluated borrowers’ everyday choices to better judge them, which helped people avail loans over a number of parameters. It is easy to manipulate a single metric but the entire history of repayment history, use of credit, diversity of use etc is difficult to evade.
Similarly, social beings that humans are, make micro choices every hour of everyday that affect their social currency. Something like number of followers alone is inadequate as well as subject to manipulations (buying of followers or reciprocal following). AI-enabled tools like Social Score therefore evaluate Instagram presence holistically using metrics like frequency of posts, engagement with followers, bots or fake followers etc.
Until now, social currency in any tangible form has existed only in extremes- too big to ignore or insignificant. Either one has a larger-than-life persona (politician, celebrity) or a regular person. Reliable quantification and verifiability through social media has opened social currency to be capitalised by everyone on social media.
Verification and quantification of social currency enables building revenue generating models. This has far reaching ramifications for brands as well as individuals. Read more to understand how every customer and brand can leverage this for their own benefit.