Social capital: Definition, examples, & importance

Social capital refers to the network of relationships and interactions individuals or groups have within society. It involves the trust, shared norms and values, and reciprocity within these social networks. With strong social capital, there’s a potential to obtain resources, favors, or useful information from connections a person has with others.

Social capital is a commonly used term in politics, sociology, and economics. In business, the term can represent a company’s success by building personal relationships and networks that foster a sense of shared values and mutual respect. It can have different meanings depending on how it’s applied.

There are three types of social capital according to researchers:

• Bonding: social capital built within a group of shared interests and goals.

• Bridging: social capital created across groups, such as two groups with shared interests coming together to work together on a goal.

• Linking: creating ties across groups that span different socioeconomic groups

Social capital is hard to understand, so here are a few examples to help contextualize it:

• Sharing information and resources: You post a comment on social media sharing a great new product you purchased and why you like it. Other people in your network benefit by seeing a recommendation from someone they know and can trust.

• Assistance: You post a question about the product you purchased in a brand community you’re a part of, and other community members help you troubleshoot a solution.

• Networking: You join an alumni association and industry groups and utilize your connections with other members to seek new job opportunities and improve your chances of getting the role.

Social capital is important because it encourages people to engage with others and enjoy shared benefits from being part of something larger. The theory of social capital — that social relationships can have positive outcomes for individuals or groups — has been studied for quite some time and is found to support community development. Generally speaking, it helps society to function together through trust, shared identity, and values.

Social capital is also essential for brands, as it relates to how customers engage with other customers or even brand representatives. By nurturing customer relationships, brands can better serve their audience and foster brand loyalty.

Nowadays, people can build social capital online, thanks to social media boosting social connections through gaining followers, leaving comments, and other interactions.

The effect of online and offline social capital in relation to social media networks has been recently studied. In 2023, a study published in the journal Psychiatry Investigation mentions how social media use can influence social capital as social media can establish relationships through online networks and enable real-time communication and information sharing.

Social media can be used to promote positive values, norms, and behaviors that support social capital. And having a presence on several social networks expands social capital. For a brand, this is important because the more social capital, the more weight and influence your online presence has.

As a brand, you should focus on growing connections with your followers and others with high amounts of social capital, like partner brands, celebrities, experts, and other social media influencers, as many social media platforms focus on strengthening bonds based on personal interests. You should also focus on developing trust with your audience, a key aspect of social capital, which helps your brand stand out and build brand loyalty. It’s important, however, to get a sense of where you currently stand with your audience.

Measuring your brand’s social capital can give you unique insights into buyer personas, behaviors, and KPIs. While there isn't a consensus on measuring social capital in general, it’s a different story regarding social media. Start by conducting a social media analysis and look at your sentiment metrics to determine your brand’s influence and trustworthiness.

Suppose you have social media listening tools in place. In that case, this will be an easy task as social media sentiment analysis is collecting information about a consumer’s perception of your brand, product, or service. This will tell you exactly how people feel about your business. Analysis can also be conducted using influence metrics (describes the efficacy with which a brand can make use of that trust to have a positive impact). Ultimately, these metrics will help you get a better understanding of your brand’s social capital.

Building an online presence is key for brands to expand their social capital, opening up the ability to build relationships among their audience, resulting in trust, shared norms and values, and reciprocity. On social media, social capital can fuel online conversations, help maintain audience engagement, and extend a brand’s utility beyond its products and services. The accumulation and spreading of social capital makes social media such an intriguing and profitable platform for brands.

Whether your goal is to build an online presence or understand how effective your social media marketing efforts are, Khoros Social Media Management Solution helps you manage your brand’s social media accounts and campaigns all in one place with access to deep social listening and custom metrics. This way, you can measure and report on what matters most to your business. Request a demo today or check out our Social Media Pocket Guide to learn more about how brands are utilizing social media for business.