The Importance of Social Capital and How to Build it

As we are celebrating the new way of life which is going digital and the enormous amount of content and access that this digital life has to offer us, it’s time we should also reflect on the Social Capital we are building.

Social Capital is a sociological concept that refers to the intangible, invisible assets and resources that emerge out of our social interactions and relationships. It skillfully enables people to mobilize these assets and resources to facilitate action. For an example, have you ever reached out to a friend or friend of friend for a referral introduction to a prospective client? Here, you are banking on the relationships that you have developed with your friend and you know that this reference can help you build a meaningful conversation with your prospect. This is Social Capital.

The following diagram explains the important components of social capital. It is a framework or the lens of building and reviewing social capital.

Building Social Capital - Espark Viridian

It’s important for us to understand that the critical mantra of success through social capital is ‘Investing in success of other people is essential for own success.’ To be successful it is not about what you know but who you know and more importantly what they know about you and are they willing to help you. It starts with helping others.

Below are the few steps quoted by Ivan Misner, founder and chairman of the business networking organization BNI in one of his popular article on steps of building social capital.

  1. Giving a call to your clients and asking about how things went with the project you were involved in and whether there is anything you could help them with. It’s important that you do not ask for referrals at this point in time.
  2. Calling people who gave reference to you and asking about their current activities so that you could refer business to them.
  3. Make a list of 50 people you would like to be in touch with, it could be your clients, your prospects, people you have referred business to you and the like. Build engagement with them by sending cards and wishes on the festivities.
  4. Two weeks after sending them cards, make a follow-up call. May be this is the time you can ask for referrals from clients you have spoken with already in Step 1.

As mentioned by Ivan Miser, relationships are a currency. The key to increasing your social capital is not the number of contact you make, it is about making contacts that become lasting relationships.

Social Capital is not only one of the most important ingredients of success, it is success itself. It is one the greatest investments entrepreneurs or any individual for that matter can make which is sure to reap benefits for a lifetime.
Also Read: How to Implement an Effective Customer Service Strategy

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