Social Currency. Where Brands meet Dynamic Context.

Mai 2nd, 2010 • 1 comment Brands, Social, Social Business, Strategy
Tags: Adaptation Marketing, Brands, Business, Report, Reports, Research, Social, Social Business Design, Social Currency, Strategy, Study, Trends, Vivaldi, World

One of the really good studies about brands and their social environments has just been published jointly by NYC think tank Vivaldi Partners and Professor Johann Füller (University Innsbruck) in cooperation with Lightspeed Research.

The report ‘Social Currency’ asks what a brand’s social currency is, and what it takes to build and nurture it. And, the report indeed brings a couple of crucial things across – it defines the buzzy term Social Currency and attributes success metrics for brands here.

Defining Social Currency

So what is Social Currency and why is it important? From the report’s perspective it is the contextual sum of experiences users can have in relation and interaction with a brand. And a brand’s social currency is bound to a dynamic process that we call reality.

Social Currency is the extent to which people share the brand or information about the brand as part of their everyday social life at home or at work. (…) It is neither a product feature, nor a communications or PR campaign that is completely managed by any one company. From this perspective, social currency is a far more delicate asset to build, nurture and maintain than is brand equity.

Social currency represents a shared asset of consumers and company-owned brands. It originates from interaction between customers and consumers. And it is the material a brand’s success will be fundamentally influenced by…

1. Across categories and brands, 53% of consumers’ brand loyalty can be explained by social currency
2. Users of brands with high social currency show a significantly higher willingness to pay a price premium (correlation=0.73)

The study’s explanatory strength does not only lie in these results – it is remarkable as it tries to define what social currency is made of. Since the research assumes that social currency is crucial for brands to create customer loyalty it consequently also reveals its components. No, a brand does not necessarily have to access all levers – this varies in regard to which industry and brand is involved…

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