In a paid, owned and earned media world, where even paid media can be supercharged by social sharing and activity, the digital marketing of today must capitalize on social capital to fuel growth.
Most early, mid, and growth stage companies have limited budgets or business models that make using paid media as an acquisition strategy, out of reach, ineffective, or both.
Earned media (press and blogger coverage) and owned media (company blog, content and social media) when done properly are typically more cost effective and deliver better results. Why?
In a sharing economy. we can’t buy customers or users (real ones anyway), despite the fact that we marketers look closely at Customer Acquisition Costs (CAC). We have to earn customers through, trust, experience and repetition.
At Make Good Social, we created a model we dubbed, F.A.R.E. to guide the consistent creation of frequent, authentic, relevant and engaging earned and owned media content that builds trust and increases the likelihood of a share, which in turn boosts social capital.
Author and analyst, Brian Solis writes in his book, “The End of Business as Usual”,
"Brands are no longer created, they are co-created".
Customers and prospects freely express their opinions online about the brands, companies and apps they use - especially when they have a bad experience - and occasionally when they have a good experience.
But whether they express their opinion or not, their experiences (with your content, your product and your people) will shape their level of trust with you. And trust is a critical component of building social capital.
The graphic shown above, from the report “The Rise of Digital Influence,” by Brian Solis of the Altimeter Group shows social capital’s path towards outcomes and actions.
So why is social capital such an effective growth asset? According to Solis,
"Social capital is the key that unlocks digital influence and new customer touchponts".
According to social economics researchers, “most definitions of social capital… focus on social relations that have productive benefits.”
In this case the productive benefit is; customers find joy (and an ego boost) in sharing a product/service they get value (e.g. knowledge, entertainment, utility) from and the business gains introductions to new customers.
As most of us know, the referral, word-of-mouth, introduction is one of the most effective ways to get a new customer. A referral is an implied endorsement. A person we trust has vouched for this product or service so our scrutiny and natural skepticism is reduced and we are much more likely to sign-up, buy, join, etc.
The more social capital a business has, the more likely people will be to share. The more that people share, endorse, vouch for and recommend your product or service, the more your business will grow.
Social Capital can help:
- Increase customer growth - more referrals
- Shorten sales cycles - trust equals shorter evaluation periods
- Increase retention and reduce churn - your customers will be more likely to give you another chance if you make a mistake
- Boost the average sales price - if you’re selling something (and you should be, why else are you in business?) - people will be willing to spend more with you
- Lower barriers to; entering new markets or product segments, forging new partnerships, securing earned media (press) coverage, and even - raising growth capital
To learn more about how your business can raise the value of its social capital, contact the team at Make Good Social for an opportunity audit and analysis.