Trust in institutions is at an all-time low. While businesses tend to fare better than Governments, NGOs and Media, their trust, too, is incredibly fragile. Enter social capitalism.
This fragility stems from the past year’s pandemic along with longer-standing issues of political and social turbulence, a societal awakening, fake news and pervading sensitivity around data privacy. The result is a public that’s largely mistrusting and disenchanted — and increasingly putting businesses under the microscope.
Evidence abounds. 54% of people think companies don’t operate with their customers’ best interests in mind. 56% say capitalism, as it exists today, does more harm than good in the world. This is despite so many companies having rallied around “purpose.”
It puts us at a historic juncture in how businesses run and market themselves. 2021 will mark the beginning of an enormous shift — and imperative — for brands in evolving beyond purpose and into the realm of doing (and communicating) business with conscience. Social capitalism.
Purpose- vs. Conscience-Driven Business
Historically, purpose was about aligning with a specific cause that matters to the business’s audience. It was also, largely, tied to cause marketing — PR campaigns set up to drive reputation and sales via feel-good, do-good efforts. Think: Yoplait’s 15-plus year Save Lids to Save Lives campaign, which led to over $50 million in corporate donations toward the fight against breast cancer.
Where we’re headed goes well beyond financial support. At its core, it’s about business operations. It’s about running every aspect of a business with customers’, employees’ and society’s best interests in mind. It’s the truest definition of Corporate Social Responsibility.
Today, business with a conscience — also called Social Capitalism, Stakeholder Capitalism and CSR — runs a broad spectrum. It ranges from singular initiatives like reducing emissions footprints to being inherently set up to make the world better. Salesforce.com is a good example, doing incredible work in advocacy and public policy, racial equality, education and sustainability, working toward cloud technology powered by clean energy sources.
This journey starts with understanding what matters to stakeholders and identifying authentic, actionable initiatives a business can take. It comes alive with the business practices to support it, including:
- Adapting how you develop and market, to solve problems vs. sell products
- Creating corporate values, operational guidelines, programs and measurable goals, as well as putting resources behind them
- Changing executive and employee compensation plans to reward for aligning to these initiatives
- Creating transparent communications around those initiatives
Social Capitalism: What Consumers Want to Hear About
Companies need to recognize and seize the imperative of operating and marketing with a conscience. These are the kinds of things consumers want to hear about from brands. More importantly, they’re the kinds of things they now expect. This is the marketable stuff, far more than another product feature.
Wherever they are in their journey — small one-off initiatives or having reached the ideal state of setting up the entire business to truly make the world better — businesses are under pressure to establish a new marketing and communications balance that puts social good equal to product (while, of course, avoiding purpose-washing).
These actions and communications are the signals you send to your audience. They’re critical as the public increasingly holds companies accountable, voting with their wallets for those doing the right and wrong thing.
Social business is not easy. But companies like Unilever and Salesforce have shown it’s possible — and it’s what future brand (and business) health will rely on.
This article was authored by Sarah Babbit, VP, Agency Marketing at partner agency SHIFT Communications.