In 140 characters or less, you can share breaking news, partake in a revolution, or weigh in on The Voice. Now add one more surprising activity to the list: paying for products and services.
From health care to fashion, a small but growing number of companies have come to embrace the concept of "social currency," allowing consumers to pay via tweet and other social media posts. Some diehard marketers view the notion as a way to buy tweets--and in the process diluting the value of these updates--but the companies that are experimenting with social currency say it's a way to reward its most fervent fans.
For Doorman, a night-time delivery service in San Francisco, letting customers pay with tweets or Facebook posts is a way of saying thanks for the support. Instead of plunking down big dollars on advertising, the exchange helps identify loyal customers while spreading the company's message via word of mouth.
Word of mouth is often considered one of the most effective forms of advertisements because friends and family are more likely to trust someone they know. Furthermore, recommendations from friends are often more targeted, since there has to be a context when someone would recommend a company or product ("Did someone steal your package again? You should check out this service that delivers after you get home from work.").
"Absolutely, the holy grail of marketing is finding your brand advocate," cofounder and CEO Zander Adell tells Fast Company. "So much money is spent on a marketing budget--on marketing research, trying to find those brand advocates, trying to encourage them to go to their networks, and tell them about your product."
Doorman doesn't place any limits on how often a customer can tweet or post on Facebook for free deliveries, which ordinarily cost $7 a piece. "Because each delivery is a reasonable cost to the company, it's not like someone can game the system so intensely as to cause danger to us," Adell says. In the two months since this has been an option, customers on average have received two free deliveries a month. Adell believes they self-regulate how often they post about the company to be considerate to their networks.
Adell, who worked in both 3-D animation and video games in the past, says he borrowed this idea from the gaming industry, which is known for its experimenting with social media. "[The gaming industry] tries to utilize social networks any way they can in really creative ways," he says. "It inspired the way we think about marketing, pricing, and customer acquisition."
Social media zealots debate the worth of a tweet, but calculations last summer by analytics company SumAll found a tweet from a business generates about $25.62 in revenue, while a retweet is said to reap about $20.37 because of its untargeted nature. Looking at Twitter's most recent balance sheet, revenue per 1,000 timeline views comes to $1.49. Depending on the source, other calculations put the value at about a penny or 43 cents a tweet.
As a marketer, Dan Greenberg--CEO and cofounder of advertising company Sharethrough, co-chair of the Interactive Advertising Bureau's Native Advertising Task Force, and self-proclaimed protector of the integrity of shares--has misgivings about the practice. "It gets a little scary," he says. "If you're paying people to share something, it starts to devalue the power of a share."
Not to mention, there's the question of credibility. "If Tom shared his dentist on Facebook, I must think that must be an amazing dentist," Greenberg says, describing a hypothetical situation. "But if he got paid to do it, it not only undermines the dentist's credibility, but in my mind, Tom's credibility."
Doorman's Adell, not surprisingly, views the transaction through a different lens. "In the case where you're actually giving your customers something in exchange for brand advocacy, you're being honest with them. You're saying, 'It's so valuable to me that you talk about my product with your social network that I'm going to literally make it valuable to you.' The customer deserves to see some of that value."
But it's not just companies with modest marketing budgets that have been testing this emerging form of currency. To celebrate New York Fashion Week, Marc Jacobs is opening up the Daisy Marc Jacobs Tweet Shop from this Friday to Sunday. The 1,746-square-foot pop-up store in Soho will feature handbags and products from the brand's fragrance line (as well as couches, food, drinks, and a photo booth). But unlike your typical high-end boutique, the objective isn't to get to your wallet. In fact, no money will exchange hands in the store. Instead, customers can pay for samples and other products with posts on Twitter, Instagram, and Facebook using the hashtag #MJDaisyChain.
"The Daisy brand has built up a pretty considerable following in the social channels," says Lori Singer, group vice president of global marketing for Coty Prestige. (Coty Prestige is Marc Jacobs's fragrance licensor; in her role, Singer oversees the brand's fragrances internationally.) "We look at the Tweet Shop as a gift back to Marc fans and Daisy fans--thanking them for engaging with us."
A simple post might net a fan a fragrance sample, while more creative ones might get customers something more substantial, such as items from its Solid Perfume Jewelry line--or even a handbag. "The handbags are the big prize. The way it's working is we will be giving a bag per hour," Singer says. "Those are really meant to be given to the most creative people who showcase Daisy in the most innovative way."
Media companies have likewise started dabbling with social currency. Publications, such as the Chicago Sun-Times and The Dish Daily, have experimented with paywalls that let readers access articles by paying in Bitcoin or tweets using San Francisco-based Bitwall's technology.
"It's only natural," says Bitwall cofounder and CEO Nic Meliones. "It makes so much sense because consumers are using Twitter to discover content and share content."
Meliones says publishers have expressed interest in a tweet paywall because it presents an innovative way to engage readers with social media. Furthermore, by tweeting, readers are "giving a vote of confidence for the content," helping drive brand awareness and page views, he added. In the Sun-Times's case, a one-day partnership with Bitwall in February helped raise money--or in the case with tweets, awareness--of designated nonprofit Taproot Foundation, which helps professionals do pro bono work for nonprofits.
As some companies rush to cash in on social currency, one virtual health care company is pulling back. San Jose-based Telecure experimented with a pay-by-tweet option for six months to supplement its non-existent marketing budget. The company had proposed a short-term social experiment to its board last year in hopes of driving traffic and increasing awareness of the company by having patients vouch for its 15-minute online consultations, which ordinarily cost $25. But last month, after the company began looking at how people were using the service, Telecure decided it would discontinue the option when it rolls out a redesign of its website next week.
"We didn't see a lot of impact on any of our social media metrics," Telecure CEO Garick Hismatullin says. Furthermore, the company found some users "were being somewhat dishonest in the way they were utilizing it," creating new Twitter accounts solely to pay by tweet. "They would send out that one message and discontinue using that account," he added. There were people who used the service as intended, but it wasn't enough to justify continuing the experiment.
"I love the idea of it," Hismatullin laments. "I think it's a great concept. It's just maybe not designed for medical."
[Image: Flickr user axmai]