Brand purpose - why every business needs it
Mention brand purpose and you can almost hear the eye rolls.
The simple fact is, having a good product and/or service is no longer enough. Customers, particularly younger customers, expect your brand to stand for something - something good, something valuable to society and the world at large. Ultimately, brand purpose is the reason your brand is perceived to be in business.
This is no longer just ‘nice to have’, this is essential. Brand purpose is now almost as important in brand differentiation as your product or service is. In fact, 89% of consumers say they stay loyal to a brand that shares their values.
Why should you care about brand purpose?
Consumers are cynical, and they are savvy, and they expect brands to work for their dollar. They are particularly cynical when it comes to governments and charities - they have lost faith in these organisations’ capacity to do the right thing. They are also well aware some corporations, have revenue higher than many countries’ GDP. Therefore with all this wealth and power comes the expectation of responsibility.
However, when done right, brand purpose also brings great rewards.
Along with the above 89% of consumers remaining loyal to brands who share their values, comes the 94% of consumers who say they’d recommend a brand they are emotionally engaged with. Plus, 43% of customers spend more money on brands they are loyal to.
The converse of this, is 62% of consumers would boycott a brand that politically offends them.
If this is not enough, 89% of consumers believe purpose is demonstrated through how the company benefits society and the environment, and 77% of consumers say they have stronger emotional bonds to purpose-driven companies.
According to a report by Accenture, Unilever has nearly half of its top 40 brands focus on sustainability. These sustainable living brands are good for society and they are also good for Unilever, growing 50% faster than the company’s other brands and delivering more than 60% of the company’s growth.
As the competition for every consumer dollar only increases, brand purpose can be the greatest differentiator in consumers’ eyes. All things being equal, consumers will give their dollar to the company that does more good than one that doesn’t.
Why it’s not CSR
Don’t mistake brand purpose for the corporate social responsibility of old. The days of throwing money at a CSR program and carrying on without changing ‘business as usual’ are over. CSR can make up a facet of brand purpose, but it can’t be brand purpose anymore. Consumers see through this schtick.
Authenticity and trust
The main reason why CSR no longer works is authenticity. It is far too easy to see if a company is talking the talk but not walking the walk, and throwing money at charity does not fix a problem in the consumer’s eyes.
Brand purpose must be lived from the inside out. You cannot state you treat your employees well if you don’t. You cannot say your products are sustainable if they are not. Brand purpose is real, and it is quickly recognised if it isn’t.
Consumers have access to too much information now. The internet is too deep, and social media too prolific, for fakeness not to be uncovered eventually, and once that consumer trust is lost, it is lost forever.
Accenture says 47% of consumers will walk away from a brand if they are disappointed in their actions around social issues, with 17% not coming back. Ever. That’s a big chunk of customers no business can afford to lose.
Recent Accenture Strategy research also found a breach in trust adversely affects a company’s competitiveness. The direct impact on future revenue losses due to trust events conservatively totaled US$180 billion for the 7,000+ companies analysed. That comes to approximately US$4 billion for a US$30 billion company.
The fact is, 66% of consumers think transparency is one of a brand’s most attractive qualities, which is why more companies are opening up their operations for scrutiny and allowing consumers to track where products come from and are made.
Accenture says 62% of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency, or fair employment practices.
Key to this is alignment. You cannot stand up for fair work practices if you use sweatshops, Apple found this out the hard way. Therefore, your brand purpose must align with your business practices.
For some companies, this involves a big period of readjustment. But given consumers are demanding positive purpose more, and following COVID-19 - this is only going to become more important for businesses who are serious about remaining relevant and competitive.
Vanessa Mitchell is the Director of Content and Communications at AZK Media