Stepps (Social Currency)

1. Social Currency, ie sharing information

The desire for social approval is a basic human motivation. People satisfied this desire by sharing stories, news, information, etc

"...people share more than 16,000 words per day..."
Jonah Berger, 2013

This sharing involves social influence (includes social media like texting, e-mailing, etc plus word-of-mouth.)

Word-of-mouth

"...word of mouth is the primary factor behind 20 to 50% of all purchasing decisions......word of mouth is at least 10 times more effective than......traditional advertising..."
Jonah Berger, 2013

Some examples include

- restaurant (word-of-mouth conversation by a happy customer can increase sales by $200)

- Amazon (a 5-star review on  results in 20 more books being sold compared with a 1-star review)

- doctors are likely to prescribe a new drug if they know other doctors are doing it

- AfterPay (its success is based on the concept of instalment payment, ie buy now, pay later. AfterPay (starting in 2014) has a market capitalisation of around $A 40 billion (August 2021). Word-of-mouth has been important in its success, ie

"... AfterPay didn't just have customers, it had die-hard fans who spread the gospel on their behalf, accelerating growth at no cost..."
Jonathan Shapiro et al, 2021)

Word-of-mouth, especially face-to-face conversation (especially a friend telling friends) is more effective than traditional and online advertising for 5 main reasons; it is

i) more persuasive as it is perceived as more credible, especially if it comes from a trusted friend

ii) more targeted, ie directed toward an audience who is interested

iii) available to everyone, ie it just requires getting people to talk

iv) usually occurs in an informal, relaxing environment

v) more prevalent than online

Word-of-mouth can be divided into

- immediate (pass on details of an experience, or share information, soon after it has happened; this is important for movies, products with limited shelf-life like food, etc)

- ongoing (conversation in the weeks and months that follow; this is important for social campaigns like anti-bullying)

Generally interesting topics, products, etc harness the advantage of immediate word-of-mouth.

Word-of-mouth has 2 challenges, ie focus and execution.

Which is more important: the message or the messenger?

Sometimes we focus too much on the messenger, ie person, rather than the message.

"...contagious content is......so inherently viral that it will spread regardless of who is doing the talking. Regardless of whether the messengers are really persuasive or not and regardless of whether they have ten friends or ten thousand..."
Jonah Berger, 2013

Execution refers to targeting the right market, ie people and timing (see more details below)

Research (Jonah Berger, 2013) has shown that only 7% of word-of-mouth happens on-line

 "...Customers referred by their friends spend more, shop faster, and are more profitable overall..."
Jonah Berger, 2013

Online messaging may, however, reach more people, ie
"...the average tweet or Facebook status update is sent to more than 100 people..."
Jonah Berger, 2013

However, it may not be sent to the 'right' people, ie the ones you want to target.

NB Some research shows

"...less than 10% of their friends responded to a message they posted......50% of YouTube videos have fewer than 500 views. Only one third of one percent get more than 1 million..."
Jonah Berger, 2013

In some cases online word of mouth is very powerful. Remember: if you want people to check out a website, the desired action is only a click away. Additionally, people use online research to check out a product, service or idea before buying, like automobiles, household goods, food, etc.

"...In some instances, online word of mouth may sway their decision..."
Jonah Berger, 2013

Word-of-mouth is, also, used to make a good impression with others, ie provide social currency. People share to make themselves look good and you need to find a way to link promoting products, services and ideas at the same time. This can be done in 3 ways

i) find inner remarkability (ie is it unusual, extraordinary, or worthy of notice or attention?; the key is to make something novel, surprising, extreme, interesting, mysterious, controversial, etc ; they are worthy of remark)

ii) leverage game mechanics (this refers to the elements of the game, application of the program - including rules and feedback loops, with the aim to make them fun and compelling

"...we need to leverage game mechanics to give people ways to achieve and provide visible symbols of status that they can show to others......Good game mechanics keep people engaged, motivated, and always wanting more..."
Jonah Berger, 2013

An example of this is the frequent flyer rewards where passengers get reward points based on mileage flown. Yet only 10% of these rewards are redeemed annually. It is the status of being upgraded based on these points that people like.

Some methods to motivate you include

- internal motivation, ie tangible evidence of your progress, like solving a tough solitaire game.

- using discrete markets to motivate you, especially when you are close to achieving them, like buy-ten-get-one-free coffee punched cards.

- encouraging social comparisons at an interpersonal level, ie people care about their performance in relation to others. This is linked with status and hierarchy, ie your relationship with others.

NB

"...doing well makes you look good..."
Jonah Berger, 2013

Leverage in game mechanics requires quantifying performance. Some have built-in metrics, like a golf handicap. If the metrics aren't obvious, they need to be developed, eg airlines rewarding miles flown and awarding status level, ie turning loyalty into a status symbol. While people are boasting about their award status (more often than not doing this online), they are helping to build the brand of the airline. Another example is Burberry, which encouraged wearers of their iconic trench coat to send photos of them wearing their coat; with some photos being selected to be posted on Burberry's website. This resulted in

"...Burberry's site garnered millions of views from more than 100 different countries. And the contest helped drive sales up 50%..."
Jonah Berger, 2013

These organisations are getting their clients to help with the marketing)

 iii) make people feel like insiders (use scarcity and exclusivity to make customers feel like insiders; an example of this is the membership-only model.
Scarcity and exclusivity refer to something that is restricted and less available. Scarcity can occur because of high demand, limited production, or restrictions on time or place to acquire them. Exclusivity refers for limited access to customers who need specific criteria like money, knowledge, status, etc; access can be restricted to invitation only

"...scarcity and exclusivity help make products catch on by making them seem more desirable. If something is difficult to obtain, people assume that it must be worth the effort...... this limited availability makes us feel like we have to act now. If we don't, we might miss the opportunity even if we might not have otherwise wanted the opportunity in the first place.....If people get something not everyone else has, it makes them feel special, unique, high status. And because of that they'll not only like a product or service more, but also tell others about it......Having insider knowledge is social currency..."
Jonah Berger, 2013

Sometimes initially using scarcity and exclusivity, and then relaxing restrictions later can help build demand.

However, be wary of restricting availability being perceived as 'snobbish or standoffish', ie this could turn people 'off'. Also, need to manage disappointment. Some ways of handling this include

- we are fully booked until 9 PM

- we don't have product A but we have a similar product B

Don't underestimate the motivation of people playing for fun, including the bragging, ie doing better than others

"...people don't need to be paid to be motivated..."
Jonah Berger, 2013

In fact paying people money to promote products and services can backfire as the decision is no longer based on how much they liked the product or service. It's more about how much money they will receive for doing the promotion.

Self-sharing

"...people share things that make them look good to others......desire to share our thoughts, opinions, and experiences is one reason social media and online social networks have become so popular......More than 40% of what people talk about is their personal experiences or personal relationships. Similarly, around half of tweets are 'me' focused, covering what people are doing now or something that has happened to them..."
Jonah Berger, 2013

Social media addiction occurs where people cannot stop sharing what they think, like, want, etc everyone, all the time. Research has shown that disclosing information about yourself is intrinsically rewarding, ie

"...sharing personal opinions activates the same brain circuits that respond to rewards like food and money..."
Jonah Berger, 2013

Discovery brand uses personal recommendation

"...Nothing is more viral or infectious than one of your friends going to a place and giving it is their full recommendation..."
Jim Meehan as quoted by
Jonah Berger, 2013

If something is supposed to be secret, it is more likely to be talked about.

Secrets can boost social currency, especially if you are willing to share the secrets.

When telling a story, we all tend to exaggerate. This is based on your memories not keeping perfect records of what happened, ie you can remember the main parts but lack some details, so you make an educated guess at the missing detail. Consequently, stories can become more extreme or entertaining as you endeavour to make yourselves look good.

 

 

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