By adaptive - July 16th, 2013
The rise of F-commerce has been meteoric. The value of social media to corporations is still being defined, but all businesses now have social currency they can exploit.
The sharing of information, experiences, opinions and purchases are now a currency that every corporation possesses. Social media has delivered a new value proposition to brand owners that have the potential to deliver massive dividends to those businesses that can understand its value and develop its potential.
With over three-quarters of the information online generated by individual users according to IDC, consumers have become the guardians of much of the value that brands now enjoy. Engaging in conversations with these brand advocates is a vital exercise to leverage the social currency that is available.
In their report the Vivaldi Partners in association with Respondi identified six types of social behaviour that leads to social currency (SC): Conversation, Information, Advocacy, Identity, Affiliation and Utility. The report explains:
“The SC Wheel assumes that customers follow very different paths towards Consideration, Purchase and Loyalty. These paths are influenced by the six social behaviours. For example, a customer might convert from merely knowing about a brand to considering the brand among a set of alternatives because he or she hears others advocating for the brand (see Advocacy at 57%). The six social behaviours explain how customers convert from one spoke of the wheel to the next spoke (or contingency).
“In order to facilitate the interpretation of the results across brands, categories, and industries, we scaled the Social Currency dimensions and assigned the highest value to 100. This allows the evaluation of the impact of Social Currency on Consideration, Purchase, and Loyalty for a brand in a given industry or category. In this illustration, Brand X’s social initiatives primarily drive the third spoke, Purchase to Loyalty conversion. The social behaviors that influence the conversions are Information (100%), Utility (98%), Advocacy (90%), and Affiliation (85%).”
And the level of engagement and therefore the value of the social currency are influenced by geography and the industry that is being targeted. Not surprisingly market sectors such as telecoms and automotive have done well in leveraging their social currency, whereas fashion and insurance need to do more.
The Vivaldi Partners report concludes: “Our research shows that most social initiatives have initially focused on marketing, customer service, sales, and communication functions. While there are successes, we believe the impact of social technologies can be far greater by holistically and comprehensively looking at how a business’ value-generating activities are changing, how categories evolve, and each in a different way.”
The value of social currency
Business often point to their inability of their organisations to place a real-world value on their social currency. According to Fedelta, this is more than possible. The numbers can be staggering: Over two billion people online. Every minute of the day over half a million pieces of content are shared on Facebook alone, with $272,000 spent by online consumers.
Corporations of course need to place these figures into context. The propensity to buy online is compounded by the desire to use mobile devices to fact find. However, mobile still has a long way to go to catch up with the Internet and a retailers’ online store as the preferred channel for making purchases.
Social currency then is a new and demanding paradigm, and one that will continue to rapidly evolve and make itself felt across all marketing channels. With over 70% of consumers relying on social media to guide every purchase they make, ensuring your brand and products are destinations during every social media session is the true value of social currency.