Serious Play: The Business of Social Currency

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Originally featured on Harvard Business Review

I’ve just spent my first week on the social network/game called Empire Avenue, a new kind of site. If Twitter encourages us to tell the world what we are doing, and Foursquare tempts us to tell the world where we are doing it, then Empire Avenue asks us to determine what we think our friends and brands we like are worth.

The network is partially a fantasy stock market which allows you to “buy and sell” profiles, whether they are profiles of friends or companies. It uses it’s own currency system called “eaves.”

Empire Avenue highlights a pervasive trend that will likely influence the business world in the long term. Like many other platforms, including popular networks such as Facebook, Empire Avenue caters to human psychological factors and uses game techniques to reward participation and encourage a participant to willingly “give up” what is truly valuable in business–data. So why would someone want to give up data? Facebook knows the answer to this question: social currency.

Social currency is shared information that encourages further social encounters. It’s not a new concept, but the social web increases its prevalence. In the web-based collaboration software platform called Rypple, a simple act of thanking someone on a team and using a badge as a way to show your gratitude is a form of social currency. A platform called Badgeville promises to add virtual rewards to your digital media property through leaderboards and virtual “badges” that act as reinforcements to reward certain behaviors and encourage others. As someone who has taken a deep dive in several social networks (I joined Twitter in 2007) and observes both the gaming and currency aspects of them, I do believe these dynamics will influence the business world as it becomes more connected. In this “social reward” economy, here are a few things you may want to consider as you manage teams and work to build the brand(s) of your organization.

Competition. Not everyone enjoys competition, but competitive environments often generate more participation, and friendly competition can lead to positive results. In the case of internal collaboration, for example, having teams “compete” can motivate them to perform better. I was once invited by Procter & Gamble to “compete” in a fundraiser using our social networks to sell T-shirts for a cause. A real time “leaderboard” let every team know what their status was. It generated a friendly sense of competition and motivated the teams to turn up the heat.

Play. Features that encourage participants to play are often effective ways to increase participation and engagement. When Twitter acquired the popular Tweetie application, it included a “slot machine” in the user interface to help communicate the pending acquisition. It made a fun feature in the app even more enjoyable.

Rewards. A system that keeps count of your accomplishments typically acts as the primary reward for an individual who chooses to continue to participate. Businesses have made a science out of loyalty programs already; in the emerging connected economy, points may be more subjective. An online platform called Klout acts as a new type of loyalty program by partnering with brands and offering deals to members who have relatively high scores.

Status. If you’re of a certain age, you might recall walking up to an arcade game and seeing the top users display ranked by the score of their game with their initials. Excellent players whose initials dominated the screen gained a certain–at least at that particular game in that particular arcade. A relatively new platform called Socmetrics (disclosure: an Edelman partner) dives deep into topics and scores individuals or companies against those topics indicating a status tied to influence in a specific topic or category. For businesses, this can be valuable in knowing who’s who in regards to the topics you care about.

These examples represent just a small sample of the ways business is being gamefied. It’s worth noting that there is a downside to all of this–as with any game, opportunities exist to cheat it or rig it. However, your customers, employees, and even business partners are likely spending scores of hours on their social network of choice trading in some type of social currency, even if they don’t know it. Technology doesn’t replace human behavior as much as it can amplify it, and this is one trend that more of us will likely feel the impact over time.

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