Today, the social economy embodies a powerhouse of influence and value for reaching a wide range of potential customers. While companies like Uber and Lyft benefit off of peer-to-peer transactions directly, the social economy doesn’t always mean dollars and cents. And in today’s social-driven world, social influence itself serves as a form of currency.
Understanding the social economy is a necessity for marketing purposes, as younger generations value the opinion of influencers over traditional advertising methods when making purchasing decisions. In fact, a new study found that, when making shopping decisions, customers trust influencers 94% more than family or friends. This shows the growing importance of utilizing several forms of social interaction in marketing strategies.
The power of the social economy continues to grow as technology creates opportunities to connect with millions of people and facilitate peer-to-peer transactions. With that said, there are some ways to utilize the social economy to improve your business or social influence. Here are a few things you must understand:
1. Whether you like it or not, you’re a member of the social economy
The social economy has existed for as long as people could communicate. There has always been a value to social interaction. However, it’s not always quantifiable in traditional monetary standards. For example, a popular person has a lot of social value stemming from all the connections they have made, not just on social media.
They might have established these connections from in-person networking or their presence at an event or social gathering. Social platforms like Facebook or Snapchat help standardize and quantify the social economy, making it easier than ever to measure the value of an individual’s social influence. Nonetheless, you have social influence online and off.
To increase your influence within the social economy, find out why people engage with your social profile and focus on it. Just like any business, you want to understand why people buy your product and what differentiates you from others doing the same thing. Likewise, knowing why people engage in your content will help you craft your social unique selling proposition.
2. There’s a functional currency for the social economy
Like any economy, the social economy has a currency that all members transact in, often referred to as social currency. How social currency is defined differs significantly based on who you ask. Simply put, social currency equates to the attention you get from others and consists of the number of active social connections you may have at any given time.
Attention comes in the form of any social interaction such as views, likes, comments, shares and anything else where another user has invested time engaging with the information you’ve shared. Social media platforms do a fantastic job of quantifying the amount of interaction and influence a particular profile or piece of content has, which ultimately shows its value.
Understanding social currency is key to being able to convert it into real currency. Figure out what drives social currency for you and create a cohesive funnel for converting that into sales or to drive key business KPIs. For example, a finance company can share advice around personal finance, like tips on securing a mortgage or retirement planning.
Users engage in that content and the finance company can leverage that engagement to sell its financial services. Effectively, the content is a marketing tool for the company to get users in the door.
3. Content is the driving commodity of the social economy
As mentioned, social currency is generated when users view or interact with another user. But, to do so, they need something to interact with. From a social media perspective, that something is content. The quality of content, combined with its reach, is what drives interaction. Social media influencers are perfecting this art and making impressive amounts of money in return. You can think of the different types and formats of content as the commodities that drive the social economy.
Create content that people are demanding and enjoy engaging with. Currently, video content is king — and story content, such as Instagram and Snapchat stories, is a hot topic. Figure out how to use new content forms to tell your story. Don’t be afraid to try new forms of content as they emerge, as doing so before the rest of the market catches up can pay dividends by quickly boosting your growth and fame.
Focus on quality content and make your promotional content entertaining. Lastly, always ask yourself if you’re giving value to the consumer. Following these steps will ensure that you’re creating shareworthy content and driving social value.
4. Influencers are the industrialists of the social economy
“Influencers” and “influencer marketing” have become huge buzzwords in the advertising industry over the past three years. Some thought it was a fad and would pass, but others like myself believe that influencers and influencer marketing is here to stay.
Why? Because in the social economy, like any economy, there’s money to be made and competition to accumulate more wealth than others. In this case, influencers are the elite of the social economy. Through the merit of their content, they have accumulated lots of social currency and, like any good investor, leveraged that initial currency to gain more.
Influencers focus on providing content that’s in demand, and they control a particular market share of that type of content. Like any business, some influencers concentrate on producing content for a specific target market while others strive to provide content on more general topics. Either way, influencers are the elite of the social economy, and when they advertise, they convert their social currency into actual currency.
In sum, the social economy operates on the same principles of any market and is made up of content creators and content consumers, with many of us being both. The market favors first/early movers who can take advantage of a white space via a differentiated offering with high quality and that constantly addresses the demands of the market.