Measuring Social Capital: How To Do It and Why It’s Important

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Measuring Social Capital: How To Do It and Why It’s Important

Jul

By Casey Terp | Social Media Team

Recently, a whole slew of sites that measure a person’s internet worth or internet social capital have been cropping up all over the internet. Sites like Klout, The Social List, Twitalzyer and PeerIndex give users a score or rank based upon a list of factors related to the social networks they are active on and how “popular” they are on these networks. The higher the score or the better the rank, the more social capital a user said to have, and is therefore the more they are worth. Then there are sites like TweetValue and Empire Avenue that actually monetize a user’s worth by providing them with a dollar value (Tweet Value), or other monetary value (stock for Empire Avenue). To find out their score or value, a user just needs to allow the site to connect to their social networks, with the most popular being sites being Facebook and Twitter, and others including LinkedIn, Foursquare, and Quora.

Klout

Empire Avenue

The Social List

Tweet Value

Twitalyzer

PerrIndex

Above, you can see 6 different rankings from the same person’s social media “life” so to say. Currently it is difficult to get a consensus from the sites because each one measures social capital using different methods and expresses value in different ways. So while someone may have a score of 47/100 on Klout, on PeerIndex they may have a score of 6/100. And while different sites use different connections (Klout uses only Facebook and Twitter while PeerIndex uses Facebook, Twitter, Personal Blogs, and LinkedIn), there doesn’t seem to be much in common with the scores that were given. Despite these differences though, each website does judge each of its users the same way, so while you may not be able to do accurate cross site comparisons, internal comparisons within each site could prove to be valuable. Overall, it is safe to say that ranking sites like the ones listed above will have a place in the world of social media. Sooner or later more users will begin to use these sites and the popular ones will flourish and hopefully create a standard for measuring internet social capital.

2 Reasons for Companies to Pay Attention to Social Capital

Smart Marketing
Imagine you are a selling a product; let’s say it’s candy. Obviously your goal is to make a lot of money selling candy, and in order to do this you are going to want to market your candy to potential customers. You hope that your customers will like your candy, and more importantly you hope that they will like it enough to tell people about it. Now, imagine you know just how many social connections your customers have, and how influential your customers are within their social networks, i.e. how much social capital they have. You are going to want to focus your marketing efforts on those who have a stronger presence and influence within their social networks because they will be able to spread news of your product to the most people, and from a viewpoint that is trusted. Information like how much social capital a customer has could be used to greatly improve a company’s CRM, providing managers and decision makers with a more complete view of their customer that includes social media. (Have a look at this debate on Quora for more information). Companies like Klout have already jumped on this opportunity and let business target high scoring Klout users for certain perks.

Companies are users too
While the ranking sites above will be useful for targeting profitable customers, the sites can also be used by the companies themselves to measure their own social capital, as well as compare their rankings with those of their competitors. Each site offers its users different services, but one of the standouts is Klout, which allows side by side comparison of users. Below you can a comparison between the same person used above, and Dunkin Donuts:

As you can see above, Klout provides the user with a nice comparison of the two selected profiles (note: the profile Klout used for Dunkin Donuts was only Twitter as the company hadn’t linked its Facebook page to the site). Information like this could be used to gain insight in to where a competitor is stronger than your company, and where your company could use improvement.

While it is still early in the social capital ranking game, companies should be aware of what benefits sites like Klout could bring them. All of these sites have free services that any company could benefit from using, so why not be proactive and jump on the bandwagon a little early? The cost is low, but the potential insight that could be gained could prove to be very valuable.

Posted in Social Media