There are two ultimate goals of any business: profit and multiplying it. For the longest time, companies have remained cautious towards the current socio-political issues of the world. Their main objective was centered mainly towards producing and selling goods and services. However, in the 1970s, anti-big business protest groups caused companies to reassess their social responsibility. Government litigation incorporated ethics into businesses giving management a critical factor to internalize.
The most significant wealth transfer in history is fast approaching as experts predict millennials will become the wealthiest generation in history as baby boomers pass down their accumulated wealth. It is estimated that they will collectively inherit $30 trillion— mainly in the ownership of privately held businesses and 30% in liquid assets. Companies heavily invest in marketing strategies that appeal to them. According to a report by PR daily, 83% of millennials want brands to align with them on values.
Socials issues are business issues
Millennials are driving brands to become more socially responsible, with about two-thirds or 65% of them boycotting those with a stance contrasting theirs on an issue. However, this doesn’t mean that brands should remain apathetic, as more than half or 62% of them prefer products that show off their socio-political beliefs. Brands are displaying their awareness of life’s inequalities while doing their part to address them. It is suitable for a brand’s reputation if they associate themselves with a cause. Even a simple act such as donating to charities or a timely social media post would boost public perception.
It’s not as simple as donating large amounts towards a good cause hoping it would directly translate into free and organic advertising. Consumers don’t appreciate that when a corporation engages in philanthropy just for a competitive advantage, it is inauthentic and unethical. For instance, a company spent $5.5 million on advertisements to televise their $1 million charity donation. Thus, social media swiftly picked up on this and researched more into its dubious practices.
Virtue signaling is a pejorative meant to imply a moral grandstanding. It is thrown towards disingenuous companies that express their opinions or sentiments on an issue to appear virtuous, despite propagating unethical practices themselves.
It is difficult for any business to successfully market its products and services as a socially responsible and ethical brand. Outsourcing seasoned consultants is an excellent choice as they bring in an impartial voice to a company’s concern. Hiring a CMO as a service can help address a company’s unique issues to matters like these.
According to Huffington Post, 61% of millennials are worried about the state of the world and feel personally responsible for making a difference. Thus, most of them want to know whether a company actively reduces its impact on the environment. Being informed and accountable consumers, they express their activism through their wallets.
Recently, a four-minute video mockumentary depicting the story of a Rabbit named Ralph went viral. The clip exposed cosmetic brands performing inhumane tests on animals resulting in several consumers reacting with strong emotions. It spread through social media like wildfire and with it a call to boycott those brands. Even the Independent Beauty Association (IBA) issued a statement in support of eliminating animal testing.
Companies need to reassess whether they’re eco-friendly enough. It is terrible for businesses if their product directly or indirectly harms nature, animals, and local communities. Management needs to internalize the environmental consequences of their product or risk watching their profit plummet.
Ethics is rewarding
When a company manages to retrofit these ethical and sustainable models into their workflow, it will reward them greatly.
Millennials embrace digital life, with more than 90% of them owning smartphones. They are active in social media and will not hesitate to promote an ethical brand. A millennial consumer wants to feel personally connected with the brand as they feel what they consume is a microcosmic representation of who they are as people.
Organic marketing is the most effective way to advertise to their generation as 84% of millennials trust traditional advertising. They’re skeptical of impersonal methods of traditional advertising because they feel disruptive and fake. An overwhelming majority of their generation prefer to purchase a product based on a recommendation from friends and family. This is because 89% of this generation trust the advice of their peers far more than the claims of a brand.
The goal of a business remains the same, but now they have to reach that goal without sacrificing the rights and welfare of its workers, consumers, and the environment. Giving back equates to earning more, and companies that refuse to change their ways face the consequences as consumers find their power in a protest like no other.