currency

User as a Currency

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Both internet users and market regulators are becoming more concerned about who uses personal data and how. The recent events involving Cambridge Analytica have helped to raise the awareness that the old joke, ‘on the Internet, nobody knows you’re a dog’, has long run its course. In this context, an opinion is often voiced at tech conferences worldwide that identity has become a new currency. I suggest going one step further and looking at the user as a currency. This puts a very different angle on the process of designing and communicating about products and services.

New technologies have made the relations between suppliers and users more direct, which have led to the emergence of new standards. Some of them fall back on surprisingly old formulas. One example could be the descriptions found in the works of anthropologists who explored the islands of Melanesia and Micronesia. The Kula ring, described by Bronisław Malinowski, which involves the exchange of gifts, can in some ways be compared to the practice of rewarding customers for purchase, loyalty and information sharing. On the other hand, the need for transparency is driving the growth of blockchain technology. When analyzing it, Natalie Smolenski refers to Fei stones from the island of Yap, a kind of currency for which, for practical reasons (large stones are hard to move around), a decentralized database of sorts was developed. Every villager knew who owned each stone, and what’s more, they had a record of past transactions committed to memory. In short, the only thing that has changed is the technology. A more advanced data storage and processing is now possible.

From loyalty programs to blockchain

The practice of rewarding customers for shopping decisions is probably as old as trade itself. The strong position of loyalty programs, which are constantly reimagined, are primarily used by retail chains, showing that sharing the profit with the buyer can be very profitable. A survey made by ARC Rynek i Opinia at the turn of 2017 in Poland, pointed to an increase of 17 percentage points in the number of customers joining loyalty programs. This increase was very strong for one of the store chains included in the survey. This shows how greater accessibility can propel the popularity of such a solution. In the current competitive environment and with constant access to mobile devices, customers are not only becoming more aware of their own impact but also have more access to tools that allow them to monetize their shopping decisions and more. Taking the user’s angle, the concept of currency is shifting to other fields such as data. In this case, the heightened user concerns and more demanding regulations such as the GDPR make it more difficult for external entities to trade users’ data. To unlock the potential offered by these developments, companies are springing up with a set goal of democratizing this process and bringing power over data to users. One such company is the Polish startup IOVO who are developing a universal environment that can be used by all external service providers, including social media sites. It uses blockchain technology to enable users to control and monetize data. The announcements sound very promising but the technology is still in development. The expected launch date is 18 months from now.

In addition, users’ knowledge is also becoming a field for expanding the concept of currency. On the back of this trend, the research panel of positif.ly has proposed a cryptocurrency enabling research by a panel of social media users and transparent assessment of their expertise based on analyzing their forecasts for other users’ responses. This shows that blockchain is also making its presence in research, where it can be used to ensure the transparency of knowledge shared between entities and users.

User as a medium

‘Influencers’ is a major marketing buzzword of 2018. First, the number of followers and likes was the order of the day, but now more importance is given to checking the influencers’ actual reach and impact. Also, micro-influencers are gaining ground. Then there is the average user, who has an influence in his social network. Again, thanks to technology ‒ the social media sites and applications ‒ further opportunities for monetization are emerging. We are already seeing the return of word-of-mouth marketing, in a civilized, transparent form, which helps reach buyers through their social network with a highly credible message, according to Nielsen. In this model, the average user is directly rewarded. It must be remembered though that a tangible form of low value is often at stake here. Anyway, communication is becoming more dispersed. One factor contributing to this has been the rise of social media, which markedly shortened the communication distance between brands and their customers. Users have become accustomed to direct interactions, from simple likes and comments to replies and complaints, to rewards for all sorts of activities. Customers have more possibilities of directly influencing brands, and are more aware of their potential impact. Increasingly often, users are identifying support by purchase decisions with communication support, and a kind of ’pay with share’ currency. What’s more, they want to support brands with their communication activity for various reasons, from expressing satisfaction with quality to appreciating environmental commitment. It is natural that suppliers want to tap more actively into this trend.

Tokenization, a term related to the growing popularity of cryptocurrencies and blockchain technologies, shows that almost anything can be viewed in terms of building and circulation of values. Sometimes this leads to near-absurd ideas like BananaCoin, the first fruit-based cryptocurrency. I believe this will be a very important lesson for communication between suppliers and users in the coming years, which will translate into tangible rewards for users, boosting the transparency of relations between sellers and buyers.

Founder of Data Tribe - a Warsaw based strategy and research boutique. Netnographer and trendspotter with wide experience in marketing and PR. Seeker for new ways of qualitative research in the Internet.

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