What is brand purpose?
The concept of ‘purpose driven brands’ is not a new one. Many companies were set up with a pledge to support certain charities, use environmentally friendly products, or simply make their consumers happier.
However, in recent years technology and the media have contributed to a heightened awareness among consumers, empowering them to take a stand on issues they believe in. Purchasing decisions are increasingly driven by these same motivations which shine a spotlight on an organisation’s purpose and overall socio-environmental impact. In a world where the consumer demands complete transparency, a lofty purpose statement is not enough.
In his book, ‘It’s Not What You Sell, It’s What You Stand For’, Roy Spence defines purpose as ‘the organisation’s fundamental reason for being’. According to Spence, ‘effective purpose reflects the importance people attach to the company’s work – it taps their idealistic motivations – and gets at the deeper reasons for an organisation’s existence beyond just making money’.
Thus, to truly win over the consumer of today, companies must ensure their brand purpose is ingrained throughout their value chain; at every stage of their operations, and in every social and environmental impact.
A purpose revolution
The fear of polarising consumers on controversial issues has repeatedly stopped companies from evolving their initial purpose statement into Spence’s ‘fundamental reason for being’ that drives their brand forward.
However, research continues to show that consumers do want brands to take a stand on current and pressing issues. Unilever’s Make Purpose Pay Study found that half of the 20,000 consumers surveyed already buy or would like to buy sustainably. Added to that, the 2017 Earned Brand Study by Edelman found that the majority of millennials (60%) are belief-driven buyers, as are more than half of Gen X (51%) and Gen Z (53%). Given that the latter group has not yet reached 25, we can assume that this figure will increase exponentially over time, as they take a stand on issues that resonate with them.
Consumers are no longer just ‘buyers’; they provide the insights that help shape companies and hone their competitive advantage. Consumers don’t make decisions based on the products or services anymore; they assess the brand according to what it does and what it stands for. In short, consumers are driving a purpose revolution and organisations must join them or risk falling behind.
So, how are purpose driven brands driving success?
Inspired by the Global Fashion Agenda, Nike has created Circularity: Guiding the Future of Design in collaboration with the University of the Arts London. The guide shares principles that support a universal call to action for the fashion industry: ‘We must all come together and have a more positive impact on our planet’. The responsible design circle – sourcing, manufacturing, using and returning of the product – is upheld by Nike as the key to reducing the industry’s impact on the environment.
In a bid to tackle world food shortages, KIND snack’s ‘Kind Movement’ has invested and committed more than $34.5 million, and 50,490 volunteer hours to charities that are ‘spreading kindness and fighting hunger’.
Similarly, 2017 saw Ikea pledge to employ Syrian refugees at production centres in Jordan. This effort is part of the company’s long-term goal to provide work to 200,000 disadvantaged people around the world. As of February this year more than 100 artisans in Syria were part of the initiative, a number that is expected to reach 400 by the end of 2020.
The common thread here is that of authenticity and transparency. Purpose-led brands uphold these values because they know that their customers will immediately notice if they aren’t delivering on their promises.
But does brand purpose equal profit?
A common misconception is that an organisation’s profit and purpose are mutually exclusive. Time and time again, organisations have sacrificed their brand purpose to attain quick wins and scale revenue. Purpose costs money so it is deprioritized.
However, companies that stand for something bigger than just their sales, are typically more successful because they create loyalty and affinity with their customers. Unilever can testify to the tangible results attained by its purpose-led brands. Nearly half of Unilever’s top 40 brands have a sustainability element. These ‘Sustainable Living’ brands (Knorr, Dove, Lipton etc.) are growing 50% faster than their other brands and are delivering more than 60% of the company’s growth.
Alan Jope’s statement at Cannes Lions festival this summer demonstrates that brand purpose is a key component of Unilever’s strategy and will continue to be for years to come.
‘We will dispose of brands that we feel are not able to stand for something more important than just making your hair shiny, your skin soft, your clothes whiter or your food tastier…’ (Alan Jope, CEO of Unilever)
Furthermore, as purpose-led brands build trust and loyalty with their consumers, they are able to take on other markets and industries, opening up new sources of revenue.
So, how can brands activate their purpose?
Break down silos
Traditional siloed ways of working are not set up to drive purpose and growth. Brand purpose should be ingrained throughout a company’s activities – internally and in market – so developing it in isolation will be detrimental to its adoption. Organisations must break down these barriers and involve employees, stakeholders and customers at every stage of identifying a purpose.
They must work together to tackle the big questions:
- How can they make a difference to their consumers’ lives?
- What makes their employees proud to work for them?
- What is their ‘fundamental reason for being’?
Build emotional connections
Move away from a transactional relationship with the consumer, to one that is human, authentic and grounded in a common purpose. To establish these connections, brands must actively communicate their purpose to their consumers. They must demonstrate that they support the same values by showing how they can and will make a difference, no matter how small:
For example, questions I believe a brand should ask themselves are:
- What is their unique involvement with this cause?
- Why should they be trusted in this pursuit?
- How will their employees and consumers benefit from them trying to get there?
Building a brand with purpose requires more than just ‘purpose-washing’. Insincere commitments and empty promises will be spotted immediately by today’s ever connected consumer. Authentic brand purpose requires championing by the c-suite and cascading down to all levels of the organisation. For instance, it is vital that employees become true advocates of a brand. If the people that live and breathe the brand believe in its purpose, it won’t be long until the consumer does the same. To be truly authentic I believe brand purpose must be made authentic to an organisation’s culture. This will prove to the consumer that they are worth their time and pay cheque.
Ultimately, in order to sustain growth, brands must focus on bettering society and the planet. It’s crucial they adapt and connect with the ever-demanding consumer of today, or risk being disrupted.
Alice is an Associate Consultant and sits within Customer Engagement, focused on marketing transformation.