During Sunday night’s final game of the NBA season, an American Express ad regarding Membership Rewards caught my eye. American Express, it seems, is calling their rewards program a “Social Currency”. To cut to the chase, Amex has created a Facebook page for their rewards program members and is basically encouraging folks to talk about their reward points purchases online in this community. Comments I have heard from friends about this program range from negative views such as, “This is only encouraging people to brag about their stuff”, to a positive view of, “This is a brilliant way to build loyalty for American Express.”
Interesting program, but before we explore Social Currency more completely, let’s define the term. Social Currency is information that, when shared, encourages future social interactions. This concept originally came from Pierre Bourdieu’s writings on the sociological concept of social capital and is focused primarily on four areas: Increasing an individual’s sense of their community, sharing knowledge within their community, forming an individual identity within the community, and providing one with status and recognition as differentiation.
Facebook measures some of these aspects of social currency as “insights” on Facebook pages. For individual user profiles, it’s a little less explicit, but you could measure one’s impact on a given community by looking at each of the four aspects of social currency like this:
- Individual sense of community: Are you a part of a community? Do you regularly interact with people in your social network?
- Sharing knowledge: Do you offer up information that would help people in your network?
- Individual identity: Do people in your online community know who you are? Do you share personal information with the entire community or a chosen few? Are you a nameless, faceless Facebook friend or does your participation cause you to rise to the top of the Facebook friend heap?
- Status / Recognition: Do you collect lots of “Likes” and comments on your status updates? Do others in your community feel validated when you “Like” what they are doing?
This is an interesting concept that companies are working diligently to understand and quantify. With all the social media channels out there, companies like Klout and Traackr have methodologies that offer some level of insight into those in a community exacting the most influence. Facebook, Twitter, LinkedIn, blogs and other places where individuality can be expressed are monitored and algorithms are applied to come up with a measure of how influential an individual is within a certain domain.
The types of people who are likely to rise to top of the influence crowd have long been called opinion leaders, or people whose opinions on certain topics are highly valued. What has changed with the advent of social media is that the average person could leverage an avenue on which to publish their opinions. This was previously the nearly exclusive domain of those in the media or with an otherwise widely published voice such as authors, politicians, company executives and actors. This change to the social fabric put the potential to impact a community into the hands of anyone willing to clothe themselves in their opinions. The important thing, in the past, present and future, will be the relevance of the content shared in an opinion. In other words, if you sow inflated or self-important opinions, expect to reap fairly worthless social currency. Of course, this general rule of thumb will be negated for those whose impact is very broad in spite of the fact there is no personal knowledge to back-up broad domain knowledge.
“Those men are confusing respect with popularity.”
In the movie Valkyrie, Colonel Claus von Stauffenberg (Tom Cruise) used the line above to draw a distinction between a truly valuable opinion and one based on reverence. To illustrate this, consider that the highest Klout scores as of this writing are for Justin Bieber and Lady Gaga. There’s obviously a lot of social currency there, but it’s value is determined by the context in which it is spent. In the realm of pop music and culture, I’m sure both performers have incredible experience. In the realm of another topic, such as the world economy, they may have an opinion, but it isn’t likely to be based on any depth of knowledge. Of course, apologies to Bieber and Gaga if they happen to publish a recession-ending strategy in an upcoming economic treatise.
Seriously though, and with all due respect to the famous, social currency is as volatile as any world currency and responds to the social economics of the community in which one is trading. You want to know the latest cool leather jacket to buy? Follow Bieber’s or Gaga’s lead. You want to know the latest news on the anti-matter trap developed at CERN? Well, you get the idea. You have to trade in a community’s native social currency to receive true benefit from being a part of that community.
Getting back to American Express and their version of social currency, I think this is an interesting move on their part but is currently very narrow in scope. It is clearly focused on the status and recognition aspect of social currency in an almost “look what I got for free” manner. That said, those in your community whom you influence may be swayed toward a given product by that admission. That could build product recognition and brand loyalty with the most likely recipient of that loyalty being American Express.
For companies that are actively involved in creating an online social experience, this means understanding how to value community contributions and participation. For individual participants in online communities to be highly valued, they must understand and offer thoughtful opinions, relevant reviews and otherwise transact to increase social capital. This type of interaction will maximize the value of a community to all participants.