Social Media Capital - Earn It First Then Spend ItProponents of capitalism believed in the self-correcting nature of the free market. According to the theory, consumers will support businesses that supply quality goods and services at a reasonable price and avoid businesses that do not.

This innate self-correcting mechanism also applies to social media. A variety of social media tools has enabled consumers to take a more active role in seeking out the businesses and brands they wish to support — and calling out the brands they wish to avoid.

How do you ensure that your business enjoys the support of your target audience on social media? In a word, you have to earn trust. Trust is the capital upon which social media is based. If consumers trust your brand, they’ll not only interact with you more through your social-media channels, they’ll also spread the good word about you to their networks. It’s an evolving system in which your business should boldly stake its claim.

Have you spent the time and have you demonstrated the authenticity required to build the social media capital of trust? You can’t fake it if you don’t have it. So, when it comes to accumulating social-media capital, here are some things to consider about how to earn it, and how to spend it when you do.

Facebook’s Social Capital Is Worth Billions

Facebook Capital Worth Billions

Social media, arguably, did not originate with commerce as its goal. For example, Facebook started as a way for college students to socially connect with each other. It’s now evolved into an Internet behemoth worth billions of dollars.

But Facebook is far from an overnight success story. In the eight years since its incorporation, it’s changed its management and its partners several times. In that time, though, it’s remained relevant and increased its membership base by maintaining its core functionality — it still allows people to connect socially (and now commercially) for free. In return for the free service, members must allow advertising on their Pages — which is how Facebook makes the majority of its revenue.

There have been controversies with Facebook over the years. Privacy issues, lawsuits, and other potentially negative associations have challenged Facebook on several occasions. Facebook has addressed these concerns and constantly evolved its service to provide its members an ever richer experience.

And now its time to pay the piper. Facebook isn’t asking its membership to pay for the service, however. It’s raising capital through a public offering of shares in the company. The IPO is anticipated to value Facebook at over 100 billion dollars!

At several points throughout its history, Facebook’s CEO Mark Zuckerberg purportedly could have sold the company. When asked in a 2007 interview why he never sold, Zuckerberg replied, “I’m here to build something for the long term. Anything else is a distraction.” Instead, he held his hand, and continued to invest and grow his social media capital until the time was right to finally spend it.

Build Your Army Before You Need It

Build Your Army Before You Need It

Sales trainer Paul Castain, of Castain Training Systems, advises all of his clients to “build an army before you need it.” In other words, you’d better have spent some time building relationships with people before you reach out and ask them for something. Old school sales training once recommended the ABC sales method: “Always Be Closing.” Today, in the social media age of transparency, a more effective version of the ABC sales method might be: “Always Be Conversing.”

“These days, I prefer the indirect approach to sales,” Castain says. “Even if people aren’t ready to buy, the [metaphorical] courtships you have with them on social media pays dividends down the road,” he says. Paraphrasing social media expert Chris Brogan, Castain says that a large part of successful sales strategy today is “just showing up and being helpful.”

Mr. Castain certainly practices what he preaches. He responded in real-time to a tweet we posted soliciting input for this article. Mr. Castain pointed out that we’d mentioned him in a couple of other Insights articles, so he already had a mutual rapport and trust with our blog (and the people behind it). When it came time to help out, Paul didn’t hesitate, saying, “it costs nothing to be on the phone!”

If you’re in business, you have to make sales. At some point you have to convert your prospects into customers. But Mr. Castain says he doesn’t really sell anymore, at least not in the traditional sense. He prefers the term “transitioning” as opposed to “selling.” If you’re always waiting for someday,” he says, “you’ll never find the right time to ask for a sale.” Once Castain has put in the time listening and building trust with his target audience on social media, and once he feels that he’s genuinely provided enough value to his prospects, he “transitions” them offline. Here is where he feels completely comfortable bringing up the final sales discussions.

Businesses that are new to social media often make the mistake of using this unique platform as nothing more than a broadcast advertising medium. This approach doesn’t work. On the other hand, if you’ve been using social media effectively, building a genuine trust with your audience, then it’s completely acceptable to allow the sales function to filter into the discussion from time to time. Never spend your social media capital without earning it, but don’t waste it by failing to capitalize on appropriate sales opportunities.

What are your thoughts? Let us know in the comments below.

[Image credits: Jonathan McIntosh, Ludovic Toinel, Audrey]