Why Most Companies Trip When Attempting to Build Social Capital
By Eric Sutfin
In an era when consumers, recruits, employees and shareholders demand that the companies and brands they engage with have a broader purpose, mission and set of values, social capital has become just as important as financial capital.
Companies appear to understand this, yet, week after week, we see new examples of how they either fail in their efforts to build social capital or completely miss the opportunity to do so. One recent example includes the much-maligned Pepsi ad featuring Kendall Jenner.
Of course, every failure offers a teaching moment and this one will be discussed and dissected for months if not years. It will most certainly serve as a case study for college students majoring in advertising and marketing as an example of what not to do when trying to build social capital.
What is social capital? In a nutshell, it is the idea that the more value and contribution individuals and organizations bring to society, the more they will be rewarded in their social status, as well as their financial status.
This concept is critical for companies trying to connect millennials, whether it is to sell products and services to them or attract and retain them as employees. Recent research from the University of Southern California found that 87% of millennials make purchases that have an environmental or social benefit. Meanwhile, a 2016 Gallup study found that 71% of millennials who know what their organization stand for said they plan to stay with the employer for at least one year.
While companies, including Pepsi, recognize the need to build social capital, most fail to execute a viable strategy. The reason they fail is that they are stuck in an antiquated advertising model, where you show the label, feature the product or service, employ supermodels, who, even when they wipe away their lipstick, as Jenner did in the ill-fated Pepsi ad, still present unrealistic concepts around body image and beauty.
The problem with using these same-old tired tactics when targeting millennials, which the Pepsi ad was clearly attempting to do, is that millennials are far too savvy to fall for them.
Millennials are information vacuums. They grew up at a time when the internet was already in full bloom. They are constantly connected and have been exposed to so much mass media that they have built up a strong immunity to the fake fear and imposed societal expectations created and exploited by traditional advertising.
Do not make the mistake of concluding that this means they don’t spend money or don’t have brand loyalty. It is just that they are unlikely to be swayed toward a brand for its clever use of cute animated animals or scantily clad supermodels.
Instead, they are attracted to messages that are authentic and truthful. And they are attracted to brands that align with their values. The USC research found that 91% prefer brands associated with a cause.
And, millennials have demonstrated that they are willing to pay more for brands that meet their stringent criteria for authenticity and positive societal impact. Brands like Patagonia and Lululemon are favorites among millennials because they not only make quality products, but they also build communities around their customers focused on their interests in the environment, in the case of Patagonia, and health and wellness, in Lululemon’s case.
The misstep made by Pepsi and so many other companies attempting to build social capital is that they merely identify some issue of societal importance and stick its product in the middle of it. The Pepsi ad was instantly recognized as blatant advertising masquerading as social commentary. No one was fooled; least of all the nation’s 73 million millennials, many of whom took to social media to call out Pepsi’s commercialization and trivialization of an important cause.
Hopefully, this will be a learning moment for Pepsi and other companies that cling to outdated advertising and public relations strategies in their attempt to connect with millennials. Perhaps, they will finally realize that millennials have a more finely-tuned BS meter.
The good news is that companies seem to understand the concept and importance of building social capital, even as they often trip and fall over themselves when trying to do so. Because, when companies focus more on increasing social capital, rather than focusing solely on shareholder earnings, everyone wins, including the company, its customers, its workers, the community, and even the shareholders.
Eric Sutfin is co-founder and chief marketing officer of SoCap Agency, a full-service marketing and consulting firm that helps organizations connect with and build community around millennials. [/vc_column_text][vc_column_text]
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