Companies that put purpose first are invariably becoming industry standouts—manifest in their exemplary corporate cultures, publicly recognized competence, or as heralded champions of vital causes. Numerous benefits accrue to these purpose-driven companies, including a proven positive correlation between purpose and profit, outperforming the overall market, an ability to command premium pricing, enjoying greater brand loyalty with Millennials and Gen Z consumers, and winning the war for talent.
Lead With Brand Positioning
As with any brand, the marketing of purpose-driven brands needs to be consistent with the brand positioning. It includes all marketing activation—campaigns, events, experiences, and communications. If the brand purpose is not woven into the marketing in a manner consistent with the brand positioning, the brand risks becoming diluted in the eyes of customers and other stakeholders.
Allow Purpose to Drive Product Development
Thinking about product/service development through the lens of purpose can drive innovation and sharpen a company’s competitive edge. Purpose can spark original ideas and creativity in an organization. It can inspire employees to recast themselves into the roles of problem-solvers and value providers. A majority of executives in global companies (63 percent of them, based on an Economist Intelligence Unit and EY survey) agree that purpose makes them better able to disrupt, or respond to disruption, with their own transformational changes.
Be Ready to Take A Stand
Companies with a strong purpose understand what they do and do not stand for. They are willing to take a stand—even on controversial issues—to create long-term value for customers and employees. To be sure, not everyone in the world will relate to or support the stand taken. Some may even find it off-putting and react negatively in a public manner. What’s important is that the stakeholders who are most important—particularly the target customers—support it. Consistently lean into purpose. Never apologize for it, or waver in support of it, even when consumer sentiment temporarily shifts.
Measure Results and Course-Correct When Necessary
Successful companies set metrics to track business strategy, tactics, and initiatives. It also should be the case for purpose—especially when that purpose serves as the brand’s positioning. Consumer and customer sentiment should be consistently monitored to ensure that purpose remains relevant and that the brand continues to be associated with the purpose. If the brand is not getting credit for the purpose it espouses, then a review of all marketing activation needs to be conducted. If the purpose is losing relevance with target stakeholders, it may be time to reevaluate its appropriateness as a brand positioning—even if it continues to represent the company’s purpose.
Avoid Purpose-Washing
When a business claims to support a meaningful cause without backing it up with genuine action, that’s “purpose-washing.” And it can seriously harm a company’s credibility fast in today’s always-on world. As all marketers know, one of the key components of a brand’s positioning are the “reasons to believe,” or proof points. These proof points lend credibility to the promise being made. Identifying and clearly communicating these proof points are even more critical when the brand is steeped in purpose. A brand must be willing to back up its purpose with real action if it wishes to remain purpose-driven. Otherwise, it risks coming across as disingenuous at best and a fraud at worst.
The idea of being purpose-driven is certainly not new. It has been on the business radar for several decades. So, it’s reasonable to wonder if the concept has already reached a tipping point, if it’s a trend that will slowly lose steam until it all but disappears as a conscious endeavor.
The future is always unknown, of course. But the paths of generations can be mapped based on their activities in their formative years, and they rarely veer far off course. Millennial and Gen Z generations have made it clear that they expect greater transparency and accountability from companies before giving over their loyalty. They are demanding that companies have a purpose, and so, the concept is not likely to disappear in their lifetimes.
While baby boomers are still alive and kicking, they are primarily driving the agenda on retirement-oriented products and services. The bulk of today’s buying decisions are being made by two new generational cohorts—millennials and Gen Z—and likely will be for the twenty to forty years they will be ascendant financially.
Nonetheless, the value of purpose in brand strategy can only endure if it is also accompanied by value creation and financial performance. As shown with the triple bottom line, having a worthwhile purpose is critically important but not sufficient for success. As economic pressures and shareholder demands continue to increase, the most enduring purpose-driven companies will be those that find a way to stay true to purpose while also driving topline growth, profitability, and shareholder value.
What Does It Mean to Be a Purpose-Driven Company?
To be clear, merely claiming a purpose doesn’t necessarily make a company purpose-driven. It’s easy to understand on face value that a purpose-driven company is committed to more than just making a profit. But in looking deeper into the machinery of establishing that company purpose, it becomes evident that a truly purpose-driven company has a crystal clear sense of its values, and it uses these values to drive its decisions and actions. It focuses on that focus, as it were. At every level of the company, it answers the coupled question: What problem are we solving, or how would the world be worse off if we did not exist?
Excerpt from The Future-Ready Brand: How the World’s Most Influential CMOs are Navigating Societal Forces and Emerging Technologies by Mitch Duckler, used by permission.
Mitch Duckler is the founder of FullSurge and brings more than 30 years of brand management expertise from Unilever, Coca-Cola and Prophet. His client roster includes Fortune 500 giants like ExxonMobil, Deloitte and Hyatt. A TEDx speaker, Duckler is also a faculty member at ANA, chaired AMA conferences and authored The Indispensable Brand. His newest title, The Future-Ready Brand, was released in May 2024.
Did You Know: A 2018 study done by DDI, the Conference Board and EY found that purposeful companies outperformed the overall market by 42%, a remarkable figure. Additional research done by Deloitte analysts found these purposeful companies attaining 30% higher levels of innovation, 40% higher levels of workforce retention and higher levels of customer loyalty, as well.
Did You Know: A 2020 study of 8,000 consumers and 75 companies/brands worldwide found a striking 92% of Gen Z saying they “would act in support of a purposeful brand.” Not far behind Gen Z are millennials, with 90% of them indicating likewise. If these two generational cohorts are passionate about a cause or issue, they will purchase from companies that ally with their values.
Speak Your Mind
You must be logged in to post a comment.