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The term “gift economy” is one that has been floating around for quite a while, and although it used to primarily be used to describe a kind of new-age alternative to capitalism, it is now gaining ground with the expansion and growing importance of social media.
To understand gift economy theory and how to apply it to your social media marketing, we’ll take a look at the beginnings of the theory and how it interconnects with the new standard of online branding and marketing via social media platforms.
The gift economy is also referred to as cultural economy. Instead of being based on an exchange of goods and services for money, the gift economy is based on trading objects or services for personal connection. It has its roots in ancient culture but is still used widely today, albeit in different forms.
Imagine giving a friend a gift for her birthday – you aren’t giving it to her to prompt her to give you money for the item, but rather to symbolize the importance of the relationship in the hopes that she will reciprocate with friendship. It’s similar to random acts of kindness and selfless giving with no expectation of monetary reward. Instead, givers are paid through increased personal connection.
Image via Flickr by Animated Heaven
Social media is, at its base, a gift economy. According to Ray Rahmati, people engage with each other via social media because “It’s less transactional and more relational. Status is something that is earned through dialogue, relationship building, and giving—it is social currency.”
Social media influencers – men and women who earn money often through lifestyle blogging on various platforms – have learned to monetize this social currency. They earn through producing personal and carefully curated content in an attempt to forge connections with their audience, and then direct them towards products and services they are paid to promote. This use of the gift economy is the perfect way to understand why it’s so important to take it into consideration when working towards creating an effective social media marketing strategy.
The gift economy is based on creating intimacy and transparency with an audience in the hopes they will spread your message. Relationships are the mainstay of the gift economy. Think of the ‘like’ button on Facebook. When a user clicks that button, he’s expressing a relationship, not giving actual currency. In doing this, he is expressing to the poster that he sees and appreciate their content.
As previously stated, social media runs off of this economy. People join these sites to cultivate and create relationships with others, not to participate in marketing schemes. This is why many social media marketing attempts fail; they aren’t able to tap into the gift economy but instead try to work like traditional marketing, using tools and strategies that aren’t effective when carried over to social media.
Social media marketing is often marked by funneling or getting the desired audience to visit a specific website or blog. This is a mainstay of the stickiness model, one that was particularly effective before social media and its gift economy began its radical transformation of how consumers, especially millennials, consume and spread information. Instead of looking to direct consumers to a specific landing page, engaging with the gift economy that powers social media use may provide a more direct and effective marketing strategy.
One of the most effective ways to excel in a gift economy is to build relationships. This system is all about the social bonds between people. If your marketing strategy is more focused on broader pictures or rote information about your product or service, it’ll be difficult to tap into the gift economy.
Instead, creating translucency and cultivating a personal approach is a surefire way to gain access and therefore build relationships with your customer base. Authenticity is a cornerstone of the gift economy and customers will be able to tell if you lean too heavily on stock responses. Inauthenticity is one of the quickest ways to sabotage a social media marketing strategy.
The more your company builds its brand and engages with customers on social media, the more likely customers are to share information and posts your company creates on their social media accounts, creating a grassroots campaign that can only be achieved via building customer loyalty. Allowing your employees to become involved in branding and empowering them to engage in the online gift culture is a great way to show the personality of your company and present it as a group of individuals instead of a faceless corporation.
By fostering goodwill through authentic and personal online engagement, you’ve begun to tap into the gift economy. But that isn’t always enough to get customers engaged. Customers remember personal service more than anything and keeping tabs on the things your consumer base likes and catering your social media strategy towards that is imperative. Knowing your audience is always important, but it’s especially pertinent to social media marketing.
Once you have a good handle on what your customers are like and are looking for, it’s time to start giving back to the gift economy. Coupons, informational articles, events, competitions, and giveaways are all great ways to start really building customer loyalty. It shows your dedication to winning their support as well as your knowledge of them as consumers.
Once you have an online base, your audience will often begin sharing your contributions among their social media accounts, which widens your customer base considerably with built-in trust – the friends and family of your consumer base already have the trust of their social media connections, and they lend your business credibility through their support.
Just because you’ve implemented these strategies doesn’t mean your results will be instantaneous. Creating an effective social media marketing strategy via the gift economy can take a while. But the effort is worth it. The more you put into the gift economy of your online social media presence, the more your audience will begin to contribute to your monetary market economy, therefore creating a cyclical relationship that benefits both the business and your clients.