In partnership with research firm Chadwick Martin Bailey, the consultancy Vivaldi recently released “The Power of Social Currency,” a 90-brand study of more 18,000 U.S. consumers that endeavors to answer the marketing question of our overhyped and hyperactive world: “How can a business of any size stand out and profit in an anywhere world?”
Vivaldi introduced the term “Social Currency” in 2010 and has, since then, explored the role its seven dimensions play in creating strong brands such as Nike, Under Armour and Subway. We asked Vivaldi consultant Jenifer Ekstein to elaborate on a few of its findings.
What exactly is Social Currency, and how vital is social media’s role in it?
Social Currency is a powerful way to achieve the level of understanding of customers required allowing business transformation efforts to lead to a competitive advantage. Social Currency describes how consumers manage their social lives in today’s digital and mobile age and how brands or businesses can help consumers make decisions and live their lives more efficiently and effectively. Social media is simply one component of a larger social currency strategy. It is one of the places that brands can extract how well they fit into their consumers or target consumers day-to-day.
What has taken place between 2010 and 2016 to so radically shift the digital
landscape from “people acting in the service of brands” to “people acting in service of themselves.”
In terms of social media, there was a huge progression and shift between 2010 and 2016. At the start, social media was used as a means of connecting with one another and brands. Now, with various popular social media platforms, consumers use this as a tool to form social and personal identities.
Today, in 2016, brands need to understand that consumers no longer use social media to advocate for a brand, or talk about a brand. Now consumers do expect brands to enable them to express their social and personal identities and if this does involve talking about a brand, then they will. Consumers are no longer “free” brand ambassadors. Brands need to work harder than ever to earn the attention of their consumers. The consumer needs to be put at the forefront from the beginning, middle and end of any digital transformation effort.
Nike is your best-performing brand with a social currency index of 120 but you single out the success of a much smaller rival, Under Armour. In a nutshell, what is UA
doing so well?
We single out Under Armour because they bring in significantly less revenue than Nike but perform almost as well on social currency scores. They are doing so well because their position in the market is very inclusive and focuses on the consumer being able to achieve what they want if they will it with their slogan “I Will.” Compared to Nike, which positions itself as a brand that only winners would wear, Under Armour is more relatable to a wider audience.
The other differentiating factor of Under Armour is that they operate at the speed of the fashion industry rather than an athletic company. Broader product offerings, new consumer segments, new categories, new markets and additional distribution creates a virtuous cycle of growth and momentum.
What brand is the poorest performer in your study and what are a couple of top-line improvements it could make to its social media efforts?
In our study, the poorest performer on social currency was Prada. Luxury brands have a long-standing history of not thinking that they need to be involved in any initiatives or strategy to obtain customers. Most luxury brands see themselves as an exclusive entity and, therefore, do not actively strategize about how to intersect their customers’ daily lives. However, in today’s day and age when consumers are choosing to spend less money on material goods (i.e., clothes, accessories, footwear, etc.) and more on experiences, luxury brands should perk up and take note.
Some top-line improvements that Prada could make are to use their social media presence to create an emotional attachment that a consumer could latch onto to feel a part of the Prada brand. Currently, when looking at their social media, it is very functional and product-focused and is not much different than if you were flipping through a magazine and stumbled on their print ads. Prada’s brand mission is “careful observation of and curiosity about the world, society, and culture are at the core of Prada’s creativity and modernity.” Yet, these sentiments do not come through in their social media presence.